Wednesday, 15 August 2007

Road Equivalent Tariff

Right, I've decided to stick my neck out on this contentious subject. The Executive in Edinburgh wants to run a pilot project on the Ullapool to Stornoway ferry route, which would see fares slashed by 30%. RET means that ferry fares will be equivalent to the cost of a similar journey by road.

It is suggested that RET could see the cost of taking a car back and forth to Lewis reduced from about £200 to £140, if the 30% is correct. Some figures even quote a fare of £30 for a car. RET would bring hundreds of jobs and millions of pounds of investment. The current cost of Calmac's fares is said to be a stranglehold on the island's economy. A study into the fare structures is to be carried out this year, with the actual pilot running in 2008.

This morning's 6.54am Highlands and Islands news bulletin had an Argyll politician complaining that his area, which is also rich in islands, peninsulas and ferries, was now being deprived of the RET pilot. It would draw tourism away from Argyll to the Western Isles. What utter rubbish. RET is supposed to be for the benefit of the islanders, not primarily for the tourists, although lower fares are bound to attract more people onto the ferries.

I am not 100% convinced of the benefits of RET. I agree that Calmac charges high fares, but it should be born in mind that the company still runs the Ullapool to Stornoway route at a loss. The total subsidy for Calmac is about £30m per annum, which will have to increase if RET is introduced. Subsidies are paid for by the tax payer, including residents of the islands. Calmac is the only company interested in running these life line services; the recent tendering exercise has shown that much. They are running 12 months of the year, including in winter, when hardly anybody is on board. That is something that the man in Argyll has to bear in mind.

1 comment:

  1. "The pilot has to take place somewhere and I think that more benefit will be seen on the Ullapool to Stornoway route than on the many ferries in Argyll. As I remember there is only one profit making route for Calmac and i think it is the Claonaraigh (Argyll) to Arran route that runs just in the summer. Having run a b & b business in Argyll for some years, my experience was that most people were passing through on their way north to Oban and Skye for the outer hebs and small islands or to the Inner Hebs via Kennacraig usually having 'done' the Kintyre peninsula having come across from Arran. The pilot makes sense for Lewis and Harris as this is the largest area of population."

    shortlegsthesheep from harris
    "Re winter and empty boats. Do you not think that the RET will have a similar effect to the ADS and we didn't need a pilot for that."

    Hyper-Borean from An empty till
    "The Lochranza (Arran)- Clonaig (Mull of Kintyre) ferry runs more or less hourly in the summer all day and is only reduced to one return journey in the winter. Many people have to use it to take the long way round to Glasgow as the main ferry from Brodick to Ardrossan is full most of the summer and a lot of the time in the winter. I've had to use it often to get to meetings or airport when the Brodick Ferry is fully booked for two or three days or the weather won't let it run. The point of the pilot is to try it out to see if it works. They won't be able to tell for the main Agyll ferrys as despite the rediculous prices these ferries are oversubscribed much of the summer. The route that's been chosen will show the biggest difference in use fastest brining the benefit of a full roll out for all the islands. Then Arran will need another full time ferry for Brodick at least."

    Sunny from Exile
    "Sunny good to hear from you again. You are, again, spot on. The only way a pilot would work when something is fully booked, is to either raise capacity (more crossings?) or raise prices. Lowering prices would have no effect."

    CVBruce from CA, USA
    "Arnish, I can understand your quandry. It is an argument that is as old as time. Should the people directly benefiting from a service pay the entire cost of that service. I think that I would argue in this case, that we suffer governements to share the cost of those things that we can not afford indiviually. I'm sure that some of your tax money ends up in projects that you will never use. I think the roads and highways (including marine highways) are a class of things that we should share the expense. "

    CVBruce from CA, USA
    "Yes. I get a bit tired of people who decide not to breed complaining at having to pay for educating children through their taxes. I wouldn't care if we never benefited from RET when we eventually go sooth, as long as it helps keep the islands' hearts beating."

    Flying Cat from Orkney Mainland for a while yet