Judge’s decision due on ferry contract legality

A senior judge is set to issue his decision on whether a proposed £370 million Scottish Government contract to provide ferries to the northern isles is unlawful.

Lord Boyd will issue his judgement on whether the Scottish Ministers are breaching strict EU competition rules over the matter in the near future.

The judge has spent the past two days sitting in the Court of Session, in Edinburgh, listening to legal arguments brought by Pentland Ferries.

Lawyers for the company claim the Scottish Government is acting unlawfully in its plans to attract companies to operate sailings between the mainland and Orkney and Shetland.

The Scottish Ministers are offering to subsidise the business which wins a tendering process to provide the services.

Three firms — CalMac Ferries Ltd, Forde Reederei Seetouristik GmbH and the business currently operating the route Serco Northlink Ltd — are currently bidding to win the contract.

However, Pentland Ferries, which currently operates a service between Gills Bay in Caithness and St Margaret’s Hope in Orkney, believes the proposed £370 million subsidy is unlawful.

The company decided to go to Scotland’s highest civil court after an announcement from the Scottish Government last month.

Speaking about the proposed subsidy on Tuesday, Pentland’s advocate Mark Lindsay QC said: “This is viewed as an existential threat by the petitioner who is concerned that they will no longer be able to trade. The subsidy is unlawful state aid and it will disturb the market.”

The company decided to go to Scotland’s highest civil court after an announcement from the Scottish Government last month. The ministers had decided to name three companies who are bidding to provide ferry services between Aberdeen and Orkney and Shetland.

Final tenders for the contract are expected to be submitted by the end of April 2019 and the successful firm will receive a subsidy estimated to be worth around £370 million.

Legal papers lodged in the case show that Pentland Ferries seeks a declarator from the court that the proposed subsidy is unlawful and breaches obligations placed upon the government by EU law.

Today saw lawyers for the Scottish government argued that the ministers had acted lawfully.

Having finished hearing from both sides, Lord Boyd said he’d issue his decision at some point in the near future.

See next Thursday’s edition of The Orcadian for the full story.