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2. Notices and Instructions to Tenderers

2.1 Introduction

2.1.1 The following section sets out Notices and Instructions to Tenderers in relation to meeting the Service Specification set out later in this ITT. This issue of an ITT should not be construed as a commitment by the Executive to finalise a contract following the tendering exercise. Finalisation of the Draft Grant Agreement will be subject to consideration of Tenders received and compliance with the conditions set out in the Draft Grant Agreement and related documentation. Any expenditure, work or effort undertaken during the tendering process is, therefore, a matter solely for the commercial judgement of the Tenderer and is at the Tenderer's own risk and expense. The Executive will not be liable for any costs incurred by any of the Tenderers.

2.1.2 The Executive reserves the right not to accept any Tender and to end the competition without awarding a contract. Tenderers should be aware that it is most unlikely that the Executive will be in a position to go forward with any Tender that falls outside either the technical or financial criteria for the Project.

2.1.3 The Executive is undertaking the competition because:

• it allows the market to be tested for potential Tenderers meeting the Service Specification on the basis of a fair allocation of risk between the Executive and the Operator;
• the exercise meets the competition requirements under the relevant EC Regulation and State aid maritime guidelines for supporting a shipping service as a PSC; and
• it allows the Executive to ensure that its minimum service requirements and outputs have been identified clearly by Tenderers, and also allows for costed Tenders to be made to identify the lowest financial compensation to promote the Services.

2.2 Compliance Statement

2.2.1 Tenderers are required to state that their Tender is made in accordance with the ITT. Tenders made subject to additional or alternative conditions may not be considered and may result in the Tender being rejected.

2.3 Transparency

2.3.1 Tenderers will be required to confirm as part of their Tender that they will comply with and provide all information which may be required in order to allow the Executive to comply with the provisions of Directive 80/723 (as amended) "The Transparency Directive" insofar as it applies to the Operator's operation of the Northern Isles lifeline ferry services.

2.3.2 The Service Specification encourages innovative solutions and refers to the possibility of additional services. Tenderers will understand that meeting the Service Specification, but sharing the costs/assets involved in relation to the provision of such additional services, will mean establishing adequate systems to ensure that there is no cross subsidisation between the Northern Isles lifeline ferry services and any other ferry route or any other activities.

2.4 Responsibility for Operational Safety

2.4.1 The safety of the operation is of prime importance and it is the responsibility of the Operator to ensure that the Services are operated in a safe manner. There are no circumstances under which operational safety should be compromised in furtherance of commercial interests or in an attempt to adhere to an advertised schedule.

2.5 Compliance with Regulations

2.5.1 Tenders must contain a clear statement confirming that all aspects of the operations they propose and the vessels they intend to use will meet, and will be operated in accordance with, all Applicable Law including but not limited to relevant International Conventions as applied by the Maritime and Coastguard Agency ( MCA) to vessels trading in UK waters.

2.6 Allocation of Responsibility

2.6.1 The Executive is managing the tendering process for the Grant award and the Scottish Ministers will be the party who contract with the Operator. Once the Grant Agreement has been entered into, the Executive will be responsible for performing all the Scottish Ministers' obligations contained therein including but not limited to providing the resources to meet the Grant and making the arrangements for Grant payments.

2.7 Booking, Ticketing and Integrated Transport

2.7.1 The Operator shall operate a common timetable, ticketing and fares database for all routes so that all possible reservations, sales and credit card payments can be made from their offices as well as from travel agencies in the UK and abroad. The Operator shall use a central information and reservations system for phone and internet bookings for the network for the duration of the Grant Period.

2.7.2 The Operator shall produce and market a brochure covering all routes. Following consultation with users, the Operator shall publish timetables annually. These should be published on an agreed annual cycle to meet the marketing needs of the coming year. Proposed changes should be submitted (along with details of consultation on these) to the Executive in good time for information and approval if required. In line with the Scottish Executive commitment to meet integrated transport objectives, the Operator shall, when publishing or advertising their timetable, supply additional timetable information for connecting public transport services (for example, bus and rail services).

2.7.3 The Operator shall also work closely with the local tourist organisations and to co-operate as far as possible to meet timescales and participate in local initiatives. The Operator shall work closely with and build partnerships with train and local bus operators to achieve integrated timetables. In the event that services are delayed the Operator should liaise with rail and bus operators to agree contingency arrangements. The Operator will be expected to participate in integrated ticketing schemes, for which they may be eligible for capital cost assistance from the Scottish Executive.

2.7.4 The Operator must take into account the needs of disabled people when providing information, timetables and booking reservation systems and in allowing time for intermodal transfer where timetable variations are being proposed. Tenderers are referred to the MACS travel information publication "Valuable for anyone, valuable for everyone: providing accessible information about travel", available from MACS Secretariat
Evans Business Centre, 15 Pitreavie Court, Pitreavie Business Park, Dunfermline
KY11 8UU. E-mail: macs@macs-mobility.org . It can also be downloaded from the MACS website: www.macs-mobility.org using the following link : http://www.macs-mobility.org/docs/pubs/valuable/index.htm .

2.8 Traveline and Transport Direct

2.8.1 Traveline is an impartial UK national telephone service which provides multi-modal (excluding car), timetable and journey planning information for public transport. The service is also available by internet and by SMS text enquiry. Traveline aims to allow the traveller to make informed choices and to encourage public transport use. Traveline provides information about journey itineraries, routes, service numbers, timetables, fares and pre-planned alterations to most public transport modes.

2.8.2 Transport Direct is the UK internet journey planner service for multi-modal, timetable and journey information. Transport Direct aims to provide the traveller with:- all the information they need to plan a journey, door to door, throughout the UK; up to date transport information before and during a journey; and the ability to buy the associated journey ticket on-line. It will ultimately cover travel by all modes, air, car, train, taxi, tram, tube, bus, coach, ferry, bicycle, foot and most importantly combinations of these modes.

2.8.3 The Operator will be required to join Traveline Scotland and collaborate fully in the Traveline and Transport Direct initiatives. In addition to timetabling and ticket fares information, the Operator will be required to provide real time information to passengers and to road and public transport information systems for travellers to and from the network. The Operator shall include the Traveline and Transport Direct logos and contact details on all timetable literature and advertising. The design and use of this marketing material is provided free to participating transport operators.

2.8.4 Where the Operator makes use of the internet to promote on-line timetabling, ticketing information or sales of tickets, the Operator shall enter into an agreement with Transport Direct whereby details of a journey planned on Transport Direct are passed (in accordance with the relevant Transport Direct XML schema) to the Operator's retailing website. Such an agreement shall be at no cost to Transport Direct. The Operator shall negotiate in good faith with Transport Direct to implement the payment of commission in respect of sales resulting from the use of this interface.

2.8.5 Tenderers will note that the performance regime allows, as relief events, for delays in services in order to facilitate integrated transport.

2.9 Ferry operations

2.9.1 The Operator will be responsible for all aspects of the ferry operation, including the upkeep, manning, operation, loading and discharge of any vessel, the mustering, embarkation, carriage and disembarkation of passengers and vehicles, freight and livestock and compliance with all relevant statutory requirements. The Operator will be responsible for all vessel and other operating costs, including harbour charges. The Operator will also be responsible for advising all relevant interested parties about the commencement of the Grant Agreement, the tariffs and any adjustments to them that will be charged during the Grant Period. The Operator will also be responsible for publishing the planned timetable, advising interested parties about proposed sailing times, implementing tariff arrangements, subject to the Grant Agreement, and charging users.

2.10 Harbour authorities

2.10.1 The role of the harbour authorities is to provide a harbour and appropriate harbour facilities as agreed with the Operator, including means of access to and from any vessel agreed with the Operator as suitable for the harbour. Harbour authorities will be responsible for the maintenance and development of the harbour and such facilities as are to be provided for use by the Operator for delivery of the ferry service, and will be able to recover related costs through harbour charges imposed on the Operator.

2.10.2 As part of their Technical Submission, Tenderers must set out detailed terms of any proposed agreements with the harbour authorities concerned. In particular they should address the issue of responsibility for mooring, unmooring, marshalling, loading and unloading passengers and vehicles, freight and livestock, and the manning of shore based facilities.

2.10.3 As part of their Pricing Submission, Tenderers will be required to confirm the details of the practical and financial arrangements proposed with the harbour authorities. This will include the practical and financial implications in respect of the security arrangements at each harbour.

2.11 Allocation of Costs

2.11.1 The Operator will be responsible for all costs arising out of the Service, the operation and upkeep of any vessel and the provision of any replacement vessel when required.

2.11.2 Should Tenderers propose using freight or relief vessels other than those currently in use, such vessels will have to be suitable for berthing at the existing harbour facilities.

2.11.3 It will be for Tenderers to establish detailed arrangements for the operation of any particular vessel at the harbours involved. Annex B gives summary information and contact details for the harbour authorities at the harbours currently used. The Executive will include in the ITT documentation or in the Information Room an information pack provided by the harbour authorities, but it should be noted by Tenderers that there may be differences about specific aspects for handling in relation to any particular vessel.

2.12 Constraints and Allocation of Risk

2.12.1 With the introduction and operation of the Services certain commercial risks will exist. The Executive's objective is to identify a fair basis of allocating the risks involved, and to allocate risk where it can be managed most effectively. This section sets out the allocation of responsibility for some of the risks involved.

2.12.2 The Executive has considered the key risks involved in the Project from the point of view of the Operator and the Executive. This has to be seen in the context of the Cabotage Regulation which sets the legislative context and the key criteria for awarding Grant for a PSC.

2.12.3 Tenderers' attention is drawn to the importance the Executive attaches to the safety of lifeline ferry services, and the requirement for the Operator to meet all applicable safety and security requirements for vessels, crews, environmental and social conditions, passengers, and livestock in operating these services. It is a key part of the requirement that the Operator complies with all Applicable Law as well as Industry Codes and Standards and the relevant statutory requirements covering health and safety, animal welfare, and environmental issues.

2.12.4 The following table sets out the Executive's analysis of the main anticipated risks for the Tender exercise allocated between the Operator and the Executive. This Table does not represent any formal commitment by the Executive to accept any specific risks. The Grant Agreement will establish the commitments of the Executive and the Operator. The table below is an indication to Tenderers of the risk allocation in the Draft Grant Agreement, to help them in the preparation of their Technical Submission and to ensure a fair competition.

2.13 Assistance Available

2.13.1 The Services will be the only sea transport service between the Northern Isles and the Scottish mainland which will qualify for financial assistance from the Executive to support passenger vehicles and a comprehensive ro-ro freight lifeline operation. For the avoidance of any doubt, it will remain possible for ship operators other than the Operator to offer similar services on a commercial basis.

2.13.2 The Executive is planning, however, to introduce a new support scheme though a separate tendering exercise in relation to the provision of load on load off freight services to the Northern Isles. The details of this scheme are still under preparation but will be announced in due course. It is anticipated that this scheme will be brought into effect during the course of 2006, though the precise timings are not yet settled.

2.13.3 Grant for the current contract is paid under the Highlands and Islands Shipping Services Act 1960, which is being repealed (for these purposes) under the Transport (Scotland) Bill currently before the Scottish Parliament. The Executive proposes to make the Grant under the statutory and legal basis of Section 70 of the Transport (Scotland) Act 2000. Financial assistance made available to the Operator will be a grant towards the running costs of operating the service. This will be provided to supplement the Operators' revenues as derived from its fares and any other income. Maximum fare charges will be determined by the Executive and will be applied throughout the Grant Period, plus an allowance for annual inflation. Tenderers' attention is drawn to the terms and conditions of the Draft Grant Agreement, and the price controls envisaged which include the scope and arrangements for any adjustment to the fares.

2.13.4 The Grant will be available for the whole of the Grant Period. It will be offered to the Tenderer whose Tender complies with the award criteria set out in para 2.22. Grant payments will be made monthly in arrears on the basis of predicted cash flows and then reviewed annually on the basis of actual figures as provided for in the Draft Grant Agreement. Further details of the administrative process and accounting requirements will be provided at a later stage.

2.13.5 The Executive anticipates that the key criterion of the level of Grant involved will be calculated on the basis of the expenditure necessary to meet the requirements in the Service Specification over the Grant Period, less any anticipated revenue generated. It is also anticipated that Tenderers will wish to make their own assumptions or allowances for a margin or return from their operation. It is acceptable under Applicable Law for the Grant calculation to include a reasonable return for Operators. It is entirely a matter for the Tenderer to take a view on what they wish to include in the calculation of the Grant level sought under the financial model which will be used in assessing Pricing Submissions.

2.13.6 There will be a sharing between the Executive and the Operator of any excess grant over an agreed level. The review of the predicted cash flows referred to in paragraph 2.13.3 will allow the Executive to recover any amount by which the Grant actually paid turns out to have been excessive as provided for in the draft Grant Agreement.

2.13.7 The Executive will not be offering assistance to the Operator for capital expenditure for the provision of a vessel or any refurbishment cost of a refit to meet the Draft Grant Agreement needs, or for upgrading any vessels used during the Grant Period. The Executive does not envisage any contingent liabilities or other guarantees on its part being part of the Grant Agreement.

2.13.8 The Executive encourages Tenderers to explore innovative ways of meeting the Service Specification and if possible identify ways to minimise the Grant. Tenderers are reminded, however, that the award of grant has to be made under Applicable Law and on the basis of the award criteria explained elsewhere in this ITT.

2.13.9 Tenderers should be aware that the Service Specification sets out the minimum requirements for the Services. The Grant will be paid at levels set for each year or part year of the Grant Period, although the Draft Grant Agreement allows for some variations of specific agreed terms.

2.13.10 The Grant will be paid monthly in arrears. Tenders will set out the projected Grant for each month of the first contract year and the monthly Grant payments will reflect these projections. For each subsequent year of the Draft Grant Agreement, the Operator will recalculate the Grant by projections based on its actual costs and figures for the preceding year. At the end of each contract year the actual operational deficit will be reconciled with the Grant paid and adjustments may take place.

2.13.11 The level of Grant paid to NorthLink is set out in the NorthLink Information.

2.14 Terms and Conditions

2.14.1 Tenderers have, along with the Service Specification, been provided with the Draft Grant Agreement. Tenderers are expected to Tender on the basis of this Draft Grant Agreement and a Tender which rejects any of its terms and conditions will be deemed to be non-compliant. If Tenderers wish to suggest a change to a particular term or condition, they must specify this clearly in their Tender, setting out their proposed alternative wording. They must justify the proposed change with details of the expected advantages and disadvantages to the Tenderer, Executive and users of the Services. In the event that the Executive accepts a change proposed by a Tenderer, the Executive will ask the other Tenderers whether they wish to have the same change made in the Draft Grant Agreement.

2.14.2 The ITT does not include any further commentary on the Draft Grant Agreement, since the Draft Grant Agreement is a self standing document. It must, however, be considered carefully by Tenderers since it is important in explaining the detail of the Executive's position in key areas. These include: grant payment, performance regime, Relief Events, and variations in the Draft Grant Agreement, risk, change mechanism, contract transfer, cure plan, termination and other important issues.

Contracts with Lessor and Others

2.14.3 The Executive will require the Operator to charter the three passenger / freight vessels from the Lessor. Tenderers will also have the option to charter an additional vessel and acquire NorthLink's freight vessel and other facilities detailed in the Operators Information. These include certain shore facilities which will be available on an optional basis. This will require separate contracts between the owner of the asset as indicated in the NorthLink Information and the Operator.

2.14.4 The Operator will be required to enter into a Tripartite Agreement between the Executive, the Lessor and themselves as a condition of the Draft Grant Agreement.

2.15 Grant mechanism

2.15.1 The Draft Grant Agreement includes details of the mechanism to be used for the Grant calculation and payment. This is a crucial part of the arrangements, since it sets out along with the other terms and conditions the basis on which the Grant will be paid. Tenderers' attention is drawn specifically to the importance of a clear understanding of the grant mechanism, and how it seeks to reflect the acceptance of risk in relation to the project.

2.16 Staff and Employment Issues

2.16.1 The Executive recognises the importance of the Tendering process for NorthLink's existing marine staff (vessel crew and officers), shore staff and management. In particular the Executive seeks to ensure that the responsibilities involved are clear to potential Tenderers and the employees affected. The Executive's Consultation Paper (issued in May 2004) recognised the importance Ministers attached to staffing and crewing issues. The Executive restates the importance it attaches to these issues.

2.16.2 Tenderers will be required to detail proposals for staffing related issues. This will include crewing and other staffing arrangements such as training, recruitment and retention, health and safety, and industrial relations. Tenderers will wish to note that the existing crews are currently employed off shore.

2.16.3 The application of the TUPE Regulations is a matter of law based on the individual circumstances of the particular transfer. As the Executive will be neither transferor nor transferee of the employees in respect of the contract awarded as a result of this ITT, it is the responsibility of the Tenderer to consider whether or not TUPE applies in the particular circumstances of this Tender exercise and act accordingly. Tenderers may wish to take their own legal advice on this matter and Tenderers will wish to note recent case law where similar circumstances have been considered by an Employment Appeal Tribunal. Where there is a dispute, as in the case between NorthLink and the previous operator, this can only be determined definitively by an employment tribunal or, on appeal, the higher courts.

2.16.4 However, on the basis of the existing case law, the Executive has decided to invite Tenderers to bid as if TUPE applies and to make clear the cost that they are attributing to TUPE. If it is subsequently found that TUPE does not (as a matter of law) apply, there will be a reduction in Grant throughout the Grant Period, equivalent to any reductions in the Operator's costs as a consequence of that decision. The draft Grant Agreement contains detailed provisions covering the transfer of staff.

2.17 Financial Structure

2.17.1 The Executive has qualified Tenderers on the basis of information provided by them in the PQQ concerning their eligibility, technical capabilities and financial standing. The Executive reserves the right to withdraw the qualification of a Tenderer at any time, if it appears to the Executive that a Tenderer has become ineligible or does not have the ability or economic or financial standing to perform the submissions or offer that it makes available at any stage in the tendering process.

2.17.2 Tenderers are required to inform the Executive immediately in writing of:

• any changes to the corporate structure or membership set out in their application to the Executive;
• any other changes to their circumstances (including financial matters) or their Tenders which might affect the Executive's decisions as to the suitability of their Tender.

2.17.3 Tenderers must include, as part of their Technical Submission, a clear statement confirming that they have and will comply with this requirement. The Executive reserves the right not to assess any Tender where such a statement has not been submitted by the Tender Return Date. The attention of Tenderers is drawn to paragraphs 7 and 8 of the Tender Submission Undertaking set out in Annex K.

2.17.4 The Executive will also undertake a detailed financial appraisal of each Tender, taking account of the Tenderer's own financial structure and the commercial and operational risks which are involved in the Tender. This will be part of the evaluation process. In undertaking this evaluation the Executive will also liaise and, where appropriate, share information with the Lessor.

2.17.5 Tenderers must make full disclosure of any relationships with other companies. Tenderers will be required to account for Grant in a transparent and auditable fashion so that they are able to demonstrate that there is no cross subsidisation either with other shipping or ferry business activities within any company, special purpose company or group. The company structure for the Operator will require to be transparent, and to include systems to demonstrate that this requirement for no cross-subsidisation is being met.

2.18 Guarantee

2.18.1 The Executive takes the view that the Operator should have access to sufficient funds to address any short-term exposure above the expected grant requirement. The Executive has no view on the form this cover should take, recognising that, to a large extent, the form may be dictated by the company structure, and the Operator's sources of funds. However, the Executive expects the cover to be provided, and the source and any cost of providing the cover should be clearly set out in Tenderers' Pricing Submissions. The grant agreement sets out the mechanism involved in more detail.

2.19 Financial Model

2.19.1 Tenderers are required to complete a financial model as part of their Financial Submission, a form of which is contained in this ITT. The purpose of the financial model is to allow Tenderers to demonstrate how all of the key elements of the Tenderer's business plan relate to the costs, income yield and profits/surpluses are envisaged, and to show how this relates to the outputs and estimates of passenger cars freight and livestock anticipated. The financial model will also set out the proposed grant for each year of the Grant Period and the monthly instalments by which it will be paid.

2.19.2 This process will help the Executive to assess the financial implications of Tenders on a consistent basis.

2.19.3 The Executive also reserves the right to reassess the financial status and position of any Tenderer in the light of any changed circumstances which may have a bearing on the capacity of the Tenderer to meet the requirements of the Draft Grant Agreement.

2.20 Project Viability

2.20.1 The evaluation of Tenders will include an assessment of the project viability. The Executive will assess whether the assumptions or forecasts are realistic and achievable. This will include a comparison with previous levels of performance and activity. Where a Tenderer makes unrealistic or unsupportable assumptions or forecasts of traffic for passengers or freight, which cannot be supported by clear evidence, the Executive reserves the right to disregard such a Tender.

2.21 Grant Period

2.21.1 The planned duration of the Grant Agreement is 6 years, to comply with the requirement for a PSC.

2.22 Award criteria

2.22.1 The award criteria for the Draft Grant Agreement will be based on Applicable Law, specifically the Cabotage Regulation and EC Guidelines. A PSC also has to be consistent with the applicable EU procurement rules.

2.22.2 The Executive will apply award criteria based on EC requirements, using internal evaluation criteria. The primary objective will be to identify the Tenderer capable of meeting the Service Specification at the lowest cost, and meeting the requirements of the Grant Agreement and Tripartite Agreement. Thereafter, the key criterion will be the level of Grant required in any compliant Tender.

2.22.3 Technical Submissions and Pricing Submissions are to be submitted together in response to the Service Specification requirement. The Pricing Submission should include the level of Grant required, and be set out in the financial model described in para 2.19. The assessment of the Technical Submission will be to ensure that the quality and technical merit comply with the requirements set out in the Invitation to Tender. Only Tenders which fully comply with these requirements will be eligible to be considered as a preferred Tenderer, irrespective of the level of Grant required in the Pricing Submission.

2.22.4 The Executive will therefore expect to appoint as preferred Tenderer the Tenderer which submits a technically compliant Tender which meets the Service Specification and which involves the lowest level of Grant. In assessing Tenders the Executive does not envisage any account being taken of any economic implications which were not fully reflected in the costs of the Tenderers' Grant.

2.23 Tender Documentation

2.23.1 The Technical Submission must include the Tenderers' proposals to meet the requirements set out in Section 5. Tenderers must address each paragraph in Section 5 in the order in which they appear.

2.23.2 In support of their information, and in relation to other detailed requirements, the Technical Submission must also cover the information set out in the Summary of Tender Documentation: supporting material required in Annex E.

2.24 Freedom of Information

2.24.1 The Executive is committed to open government and to meeting its responsibilities under the Freedom of Information (Scotland) Act 2002. Accordingly, all information submitted to the Executive may need to be disclosed and/or published by the Executive. If Tenderers consider that any of the information included in their Tender is commercially confidential this should be identified and an explanation (in broad terms) provided of what harm might result from disclosure and/or publication. Tenderers should be aware that, even where they have indicated that information is commercially sensitive, the Executive may be required to disclose and/or publish it, whether or not the Tender is successful. The Executive may also require to disclose and/or publish details of unsuccessful Tenders. The Executive may publish, on its website, the names and contact details of companies and/or consortia who have been issued with an ITT.

2.24.2 Tenderers will wish to note that the Freedom of Information (Scotland) Act 2002 may be applicable to the Northern Isles services. Scottish Ministers may, by order under Section 5 of the Act, designate any persons who are (a) exercising functions of a public nature or (b) providing a service under contract with a Scottish public authority. Before making such an order the Scottish Ministers will consult with any such persons. The Executive will be consulting on the criteria for determining candidates for such a Section 5 order.

2.25 Insurance

2.25.1 The Operator shall ensure that all chartered, leased and rented assets or assets provided by any arrangement (including the Vessels to be chartered from the Lessor) are fully insured at the appropriate commercial value. Additionally, the Operator will be required to carry insurances sufficient to cover all and any third party claims which may occur as a result of providing the Services.

2.26 Compliance with EU and Domestic Law

2.26.1 This tender exercise and the terms of the Draft Grant Agreement are designed to comply with the PSC requirements of all Applicable Law.

2.26.2 Tenderers will wish to note that a PSC may only be concluded with a Community ship owner/operator.

2.26.3 The Operator shall ensure that relevant industry codes, guidance and standards are fully taken into account in their Tender.

2.26.4 The statutory framework for regulating the safety standards of ferries in UK waters is administered by the Maritime and Coastguard Agency ( MCA). Tenderers should note that the Operator will be required to comply with all Applicable Law and, in particular, with the requirements of the Council Regulation ( EC) No 3051/95 on the safety management of roll-on/roll-off passenger ferries (in respect of the passenger ferries only), the Merchant Shipping ( ISM Code) (Ro-Ro Passenger Ferries) Regulations 1997, the International Safety Management ( ISM) Code and Merchant Shipping legislation enforced by the Maritime & Coastguard Agency .

2.26.5 The Operator will be responsible for the day-to-day activities and operations including any relevant activities in a port or harbour, and therefore will be required to comply with all relevant rules and regulations including Health & Safety at Work Regulations enforced by the Health and Safety Executive and the Port Marine Safety Code as applicable.

2.26.6 The Operator shall comply with the Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001) in relation to the collation and distribution of information on the carriage of passengers, cars and freight.

2.27 Legal Jurisdiction

2.27.1 This document and all aspects of the Tendering process shall be governed and construed in accordance with Scots law and each Tenderer by submitting a Tender prorogates the non-exclusive jurisdiction of the Scottish Courts.

2.28 Tonnage Tax

2.28.1 The Ship Charters assume that the charterer i.e. the Operator has elected for Tonnage Tax under the UK Tonnage Tax regime. It is not a requirement of this ITT that Bidders should so elect but Bidders should consider the implications of this and the proposals of the Inland Revenue to abolish capital allowances for funding leases. Bidders are required to confirm in their response that they have taken these issues into consideration.

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