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1. Introduction
1.1 This report constitutes Deliverables Two and Four of the "Research and Advice on Risk Management in Relation to Subsidy of Ferry Services" study for The Scottish Executive Enterprise, Transport and Lifelong Learning Department (the Executive) before the tendering of the Clyde and Hebrides Lifeline Ferry Services. The study analyses how the
EU Maritime Cabotage Regulation rules are applied within the European Union (
EU), with particular regard to the way in which risks are managed.
1.2 In this report, we provide an analysis of how risk is managed under
PSO and
PSC arrangements in surveyed
EU Members States, as well as in Norway, Canada (British Columbia) and Japan.
1.3 Lifeline island ferry services offered within the European Union and in other
OECD countries, as demonstrated by case studies (Deliverables One and Three), vary widely as do the organisational structures put in place by government. It is therefore difficult to provide a completely systematic appraisal of each of the aspects of the
PSO/
PSC structure.
1.4 Instead, we can identify a number of key issues around which the present operating practices have been developed. In this report, we will first review the definition of Public Services in the various countries. It will then analyse how governments ensure that minimum levels of services are provided.
1.5 First, we discuss the recognition of lifeline ferry services in the various countries surveyed. Lifeline services are either operated directly by the government through government-owned companies, or through regulation or procurement in the market place.
1.6 We will then look at the definition and imposition of Public Service Obligations (
PSOs) on privately operated lifeline routes to ensure desirable service and fare levels.
1.7 Public Service Contracts (
PSCs) are then examined as government mechanisms to further ensure that otherwie non-commercially viable services are provided. In the context of s, we analyse the different types of risks confronting domestic island ferry services and the various strategies deployed to manage these risks. The most prominent of these risks are, revenue and costs risks.
1.8 We conclude with a discussion on lessons that the Scottish Executive can take from international experiences.
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