The Scottish Government

« Previous | Contents | Next »

Listen

3. Service Specification

3.1 Output specification

3.1.1 The Service Specification sets out the core requirements for the Services including the minimum service levels that will meet the needs of the Services. This reflects the objectives set for the Project, the needs of the communities and businesses served, and takes into account the opportunities and constraints of the facilities available.

3.1.2 It is on the basis of meeting these core requirements and minimum service levels that the Grant will be offered to the Operator.

3.1.3 In setting the core requirements, the Executive has sought to achieve a balance between giving a comprehensive specification of the Service required while also leaving scope for the Tenderer to use its expertise to provide innovative solutions and responses within the overall requirements. The Executive recognises that Tenderers may welcome some degree of flexibility about how the Service Specification can best be met. The Executive is willing to consider solutions which may lead to a more efficient and effective quality of Service, and to achieve the most effective use of the Grant, provided that the core requirements of the Services are met.

3.1.4 Tenderers are encouraged in preparing their Tenders to take into account the views of local organisations, relevant businesses and elected representatives as key stakeholders in the Project. The terms and conditions of the Draft Grant Agreement will also require that the Operator consults with local interests in the Northern Isles on a regular basis throughout the Grant Period.

3.2 Service Operation

Northern Isles - Scottish mainland

3.2.1 The Executive will require the Operator to provide an advertised scheduled service in accordance with the minimum service requirements as detailed below for the use of the Fleet Vessels :-

3.2.2 The scheduled freight service in the above table is as set out below (timings are in Annex G):

Freight service

3.3 Service Requirement

3.3.1 Tenderers must make appropriate provision to maintain the Services during the periods for the refit/servicing of Vessels. The precise timing of such refits/servicing is a matter for the Operator to determine, but it is envisaged that the Operator would use a period which would have the least disruption and effect on potential revenue.

3.4 Service quality

3.4.1 The Services will have to meet quality standards. Quality will be a key criterion to ensure that modern passenger and vehicle ferry standards are maintained in terms of management crew, staff, and quality of service for customers. Tenderers are required to provide a quality plan as set out in Annex D.

3.5 Timetable

3.5.1 The existing NorthLink timetable is set out in Annex G. The Draft Grant Agreement provides for limited adjustments to the timetable as agreed by the Executive.

3.5.2 Tenderers' attention is drawn to some changes which have been made to the existing NorthLink passenger timetable. These changes are set out below. The timetable for the passenger services is fixed and provides no scope for adjustment other than at the margin as provided for in the draft Grant Agreement.

Aberdeen - Kirkwall (Hatston) - Lerwick (northbound) Ro-Ro Passenger Ferry: Passengers, Accompanied Vehicles and Freight.

* Departure Aberdeen 1900 from 1 Jan -31 Mar & 1 Nov - 31 Dec

+ No Hatston call from 1 Jan - 31 Mar & 1 Nov - 31 Dec

3.5.3 In relation to the freight timetable requirement Tenderers will note that an additional service on the Kirkwall-Hatston to Aberdeen leg is required. Tenderers have flexibility over how this additional sailing should best fit into the existing timetable in the light of the vessels they propose to use. Tenderers are invited to consider the best approach in the light of discussions with the key stakeholders involved in the islands.

3.5.4 In line with the Executive's policy of encouraging integrated transport links, the Executive will require Tenderers to contact providers of connecting transport links ( e.g. buses) and arrange for the most effective integrated timetabling. Tenderers are also encouraged to respond to the extra demand generated on special occasions by including extra services in consultation with users.

3.6 Harbours

3.6.1 The Harbours have been invited to give technical and operational details and this information together with a summary of the facilities at each Harbour is contained in Annex B. The Tenderers may supplement this by direct contact with the Harbour trusts or authorities involved.

3.6.2 It is for Tenderers to consider, in discussion with the Harbour authorities concerned, any implications for existing port facilities and the feasibility of their proposed arrangements. The Executive will require to see evidence that all the implications have been considered, but the details and cost of any alterations to facilities which may be agreed between the Tenderer and the Harbour authority will be a matter for the Tenderer and the relevant Harbour authority, and will not be part of the Grant arrangements.

3.6.3 The Executive has identified a grant commencement date as set out in section 5. Accordingly, Tenders conditional on significant new investment either in terms of vessels or harbour facilities may not meet the requirements of the Technical Submission.

3.6.4 It is also for Tenderers to consider the financial and cost implications of using the Harbours. Tenderers must detail the full financial and cost implications in their Pricing Submissions. The ITT includes a package of information for each Tenderer about each Harbour provided by the Harbour authority itself, including charging and pricing information.

3.6.5 Tenderers should also include in their service proposals workable contingency plans to cover the situation where the Harbours are not available for use.

3.7 Tariffs

3.7.1 The Draft Grant Agreement provides that the annual tariffs for passengers and vehicles proposed take the rates charged by the present Operator as a starting point. These shall be adjusted by the Operator annually in line with inflation using the Consumer Prices Index ( CPI). Increases in passenger or vehicle fares in excess of CPI may not be applied without the Executive's approval. The Executive's approval is required for any tariff change less than inflation or for a reduction in published tariffs.

3.7.2 In relation to freight the Executive has reviewed the needs of the islands in the light of the decision to bring freight within the scope of the contract. The Executive has concluded that a revised tariff for ro-ro freight should apply as set out in Annex F. This reduces the previous tariffs applying and reflects the Executive's views on the importance of freight services for the economic and social development of the Northern Isles.

3.8 Concessions

3.8.1 Details of concessionary fares, special packages or discounts to be applied should be accounted for in revenue estimates. In line with Executive policy, registered blind people resident in Scotland are to be permitted to travel free of charge. The Executive requires that a system of preferential tariffs for passenger and accompanied car journeys originating in the Northern Isles will be in place with at least similar effects to those currently available. Where this discount applies this must be shown on ticketing. The Operator will have the commercial discretion to discount rates as appropriate at its own risk.

3.8.2 Scottish Ministers intend to establish a concessionary travel scheme that will entitle 16-18 year olds resident on islands and remote mainland peninsulas served by ferries to reduced ferry fares. This concession will extend to travel on all of the routes being contracted under the terms of this Invitation to Tender, but reimbursement for scheme participation will not be made under the terms of the proposed Northern Isles ferry contract. Instead, the Operator will be able to seek reimbursement of the appropriate amounts from the Scottish Executive under the detailed arrangements of the scheme as yet to be decided.

3.8.3 Tenderers should note the arrangements for sharing of any excess grant in certain circumstances set out in the Draft Grant Agreement.

3.9 Freight

3.9.1 The Service Specification requires a comprehensive roll-on roll-off freight service. This extends the policy adopted for the existing and predecessor ferry service. The scope of the existing service requirement excluded freight from the Grant arrangements, reflecting policy reviews implemented in the 1990s. The Executive sees advantages in a comprehensive service because it provides greater transparency about the services required, it means the Grant is applicable to all of the services provided, and it brings freight charging and tariffs within the service requirement.

3.9.2 The Executive requires the Operator to apply the freight charging structure set out in Annex F. There will be an uplift by inflation ( CPI) applied to these rates each year. Any other change to the rates will require the Executive's approval. It is essential, however, that bringing freight within the Service Specification offers a degree of security and stability in the market to underpin the economic and social benefits to the Northern Isles which is the basis of the Executive's policy. The Executive, therefore, requires that facilities and capacity for freight carriage are provided by the Operator and that the Executive retains adequate controls over performance and the level of tariffs charged.

3.9.3 The method of charging freight is crucial. The Executive requires a charging mechanism which is as simple as possible to use and understand and is transparent. There are different methods of charging which have been used in the past for different categories of freight, but the Executive will require a consistent method in order to comply with EU rules on State aids so that there is no preferential treatment or distortion of the market in relation to particular sectors of freight.

3.9.4 Freight is presented in the following vehicles:

• self-propelled vans or lorries ( SPV), which drive on/off the Vessel;
• drop trailers ( DT). This includes road-going trailers, ranging from those towable by car to 13.6m commercial trailers, and some roll-trailers. Drop trailers are towed on/off the Vessel by tugmaster units (Terbergs) owned by NorthLink and operated by its sub-contractors;
• livestock transporters ( LTs) which are based on 12m roll-trailers; and
• goods and livestock transporters ( GLTs) based on 6m roll-trailers, which are towed on/off the Vessel by tractor units.

In addition, from time to time, there are abnormal loads, which are wider, longer, higher or heavier than average and need to be positioned straddling several freight lanes.

3.9.5 The present lane metre charge system therefore is to be the basis for charging for all categories of freight included within the Services. A lane metre charging system is widely used in the ferry business. It is recognised that the system may evolve, and may include some adjustments or variations at the margins for any additional on vessel services, or special facilities which might be required for specific types of trailer or truck ( e.g. for access to power for refrigeration services etc). The method of charging must not make distinctions between specific categories of business or traffic, but reflect only the cost of the services being provided.

3.9.6 The freight rates to be applied, however, have been reduced from the 2005 rates shown in Annex F. The adjusted rates, based on the 2005 rates, are as shown in the table below. As the annual uprating of tariffs will be effective from 1 January 2006, these rates will be increased in line with NorthLink's published 2006 tariff.

Notes:
- Prices shown are per metre excluding VAT
- A surcharge applies to vehicles wider than 2.6 metres
- Lashing points must be fitted to all vehicles over 3.5 tonnes

3.10 Livestock

3.10.1 The general policy set for the carriage of freight should apply to all sectors of the freight market, including livestock. Livestock is a vital sector of the Northern Isles economies, and the Executive's objective is to ensure the continued availability of a satisfactory system which meets the islanders' needs, but which also complies with EU State aid rules. This applies to the shipping of the livestock from quayside to quayside, but also has implications for how the movement of livestock is organised.

3.10.2 The present pricing structure involves a headage count system as the basis for pricing, and the previous livestock support scheme of the Tariff Rebate Scheme was built around that arrangement. Given the potential difficulty that continuing with that system would involve under the State aid rules, the Executive has concluded that the livestock charging system under the future requirement has to be based on the same system of charging as applies to other forms of freight. The livestock element therefore will have to operate within the framework described above if it is to comply with these requirements, and fit with the general structure and method for pricing within the service requirement.

3.10.3 The requirement placed on the Operator will be to provide sufficient capacity for shipping livestock to meet the market requirement. That is likely to mean in the medium term at least matching the provision currently provided in terms of the capacity of vessels available, including if necessary the availability and timing of any additional vessels required in the main livestock season, if bidders concluded that that continued to be necessary. In addition, it is recognised that the market and demand for livestock movement may change over time, and the Draft Grant Agreement therefore allows for any materially significant changes above a set threshold to be taken into account in the grant payment mechanism to ensure that there is stability of supply of the shipping services needed, and pricing structure involved.

3.10.4 As noted above NorthLink has provided, in addition to the year round capacity, a specialist stock boat to meet the demand during the peak autumn season. The stockboat has been chartered for a period of nine weeks from the beginning of September, with options for extensions should sailings (and, therefore, capacity) be lost due to weather or other circumstances. The stockboats chartered in recent years have been one or other of the sister vessels MV Buffalo Express and MV Zebu Express.

3.10.5 In summary the key requirements falling on the Operator under the Draft Grant Agreement in relation to livestock shipments will be:

• to provide a minimum service schedule to be set out in the general requirement for the freight service timetable, while providing the vessel capacity and level of service to meet the market needs;
• to provide sufficient capacity requirements for the peak livestock season;
• to secure shore-handling arrangements for the livestock to be shipped, in consultation with the industry and ports and harbours involved. This could be provided either directly by the Operator or by sub-contractors;
• to charge a level of tariffs approved by the Executive, and for any adjustments (other than annual increases in accordance with CPI) to be subject to approval of the Executive as part of the regime for general freight charging;
• to provide a structure of charging for livestock handling and shipping on the same lane metre basis as for general freight. Where livestock is shipped using non-containerised systems, the Executive will require the charging system to be based on groupings equivalent to those carried in conventional containers;
• to prepare bids on the basis of the tariff levels and structure as set out in Annex F (Fares and prices).

3.10.6 The system of moving livestock adopted by the Operator will be subject to the approval of Scottish Ministers.

3.10.7 This ITT is issued while the method of the shipping of livestock is being re-appraised by the industry in the islands and by the Department. In addition to the special arrangements in the peak season for the stock boats, the regular movements required throughout the year on the routes from Orkney (Hatston) and Lerwick to Aberdeen involve the use of general livestock trailers( GLT's) and livestock trailers ( LTs). These containers are available for use by the present operator, who in turn is responsible for their positioning and availability for the industry. The shore handling arrangements are charged through the operator. The GLT/ LTs may be coming to the end of their useful lives and successor arrangements will require to be considered.

3.10.8 The Department wishes any successor arrangements to meet the foreseeable needs of the industry, but also to enable the most effective and efficient system for the use of the vessels and deck space involved. A possible future approach which has been investigated by the industry involves "multi-tiered" containers as the successor arrangements for the GLT/ LTs. This would allow for more efficient use of the available deck space on the freight vessels involved, while at the same time providing modern containers with facilities for treatment of livestock in line with the latest legislative requirements.

3.10.9 Tenderers are required to include in the ITT their plans for the movement of livestock by sea, following consultation with the livestock industry, and ports and harbour authorities involved. The Executive would wish the Operator working with the industry and any potential funding partners, to secure a system which meets the specification requirements of moving the livestock required by the industry in a co-ordinated, efficient and effective way. It remains, ultimately a matter for Tenderers to determine the means by which any livestock are to be transported, but the Executive encourages Tenderers to liaise with the livestock interests involved in assessing market potential and needs as described above.

3.10.10 While the prospect of a revised system of containers is being considered, bidders are, therefore, being asked to prepare bids in the Northern Isles Invitation to Tender on the basis of the freight pricing and tariffs of a lane metre system. The pricing will continue to take into account the Operator's responsibilities for repositioning of existing GLT/ LTs, and also reflect the actual deck space used in the vessels, and handling arrangements at the ports/harbours.

3.11 Dangerous Goods

3.11.1 The Operator shall provide services for the carriage of dangerous goods as part of the freight service requirement. Annex A gives indicative details of the quantity and type of hazardous goods carried. The Operator is required to ensure that suitable arrangements can be made for carrying at least the classes of freight mentioned in the Annex. The carriage of such goods may be achieved by the use of a suitably designed freight vessel or through a contractual arrangement with another Operator. In either case, the Operator shall ensure that a sufficient and satisfactory standard of service is provided.

3.11.2 It is the responsibility of the Operator to make sure that the arrangements which are to be put in place for the carriage of hazardous goods meets the statutory requirements applicable to ships within UK territorial waters. Where this entails the incorporation of specific features of vessel design or the granting of dispensations from the regulatory authorities, Tenderers must give details of approval granted or arrangements in place for seeking approval for the intended arrangements. Tenderers are reminded that the weather conditions which can be met with on these routes may preclude the operation of an open-decked vessel.

3.11.3 Where livestock or hazardous goods are not to be carried on the main passenger ferries, details of alternative arrangements should be provided. These details should include potential contractual arrangements to be entered into with third parties, or proposals for the chartering or deploying of specialised vessels.

3.12 Conditions of Carriage

3.12.1 Tenderers must provide as an Annex to their Technical Submission a copy of the conditions of carriage under which they would operate the service.

3.12.2 Facilities on the Fleet Vessels for disabled passengers were developed on the basis of input and suggestions received from Disability Shetland and the Fleet Vessels have disabled access from the car deck via lifts. In addition, the facilities at the port are as follows:

Aberdeen - full disabled access including ramps to terminal and lift to boarding level

Hatston (Hatston) - ramp to terminal and lift to boarding level

Stromness - Short walk from terminal and then lift to boarding level

Lerwick - ramps to terminal and then lift to boarding level

Scrabster - lift to boarding level

3.12.3 Tenderers must specify any additional arrangements which will be in place for disabled passengers, and the Operator will be expected to demonstrate that they have taken into account any relevant aspects of the Disabled Persons Transport Advisory Committee ( DPTAC) Guidance ("Design of large passenger ships and passenger infrastructure: Guidance on meeting the needs of disabled people" published on 29 November 2000). More information about DPTAC is available at http://www.mobility-unit.dft.gov.uk/dptac/guideship/index.htm and http://www.dptac.gov.uk ).

3.12.4 Tenderers must also confirm that they will have regard for and have taken full account of the relevant requirements of the Disability Discrimination Act 1995. The Operator should also liaise with the harbour authorities about the facilities which the ports and harbours make available for disabled travellers at the ports involved, to ensure co-ordination between the port and the Operators arrangements.

3.13 Service Vessels and Safety

3.13.1 The Executive is making available the three passenger and vehicle vessels currently serving the routes and referred to in this ITT as "the Fleet Vessels". The Operator shall use, operate and manage the three ro-ro passenger vessels, which were purpose-built for the routes. Tenders should therefore include the operation and management of these vessels. Further details of the Fleet Vessels and arrangements for viewing are set out in the NorthLink Information.

3.13.2 The three Fleet Vessels are leased from the Lessor under the existing tripartite agreement among the Lessor, NorthLink and the Executive. The Operator will be required to enter into a similar agreement with the Lessor and the Executive. This arrangement removes the vessel ownership risk from the Operator and allows for continuity of vessels which have been specifically designed for use on the routes, and for which upgraded facilities at the ports and harbours concerned have been introduced. The leasing costs for the three Fleet Vessels are being made available to Tenderers in the NorthLink Information to allow Tenderers to cost their Tenders.

3.13.3 Accordingly, the ITT does not specify the detailed requirements for the three passenger and vehicle vessels required to be used to meet the service outputs identified. In meeting the capacity requirements, however, Tenderers will have to secure vessel provision to meet the freight-only elements of the schedule and capacity required. Tenderers will have responsibility to provide the vessels required to meet these requirements to the level currently serving the routes by the present Operator. It will be for the Tenderer to identify the most appropriate vessel, design, freight configuration and performance specification which will meet the Executive's service requirements.

3.13.4 Tenderers must provide full details of any such additional vessels and specifications proposed to meet the Executive's service requirements. NorthLink uses two ro-ro freight vessels in response to the demand for the carriage of freight, including livestock and hazardous goods, on the Aberdeen/Shetland route. The Executive will consider proposals for other configurations of vessels, but only where they clearly meet the service schedule and capacity required.

3.13.5 NorthLink has offered to make available for purchase one of the freight vessels they currently use on the route. It is a matter for individual Tenderers whether they make use of this option or not, or secure other tonnage. The vessel specification is set out in the NorthLink Information.

3.14 Vessel capacity

3.14.1 The Executive does not specify the freight capacity, including livestock and hazardous goods, required for vessels on each route. However, total vessel capacity must as a minimum provide for the scheduled freight service timetable provided, and the current volume of carryings on the routes (see Annex A) including peak period carryings. The Executive wishes Tenderers to explore the potential for making the most effective use of vessel capacity. In particular, vessels should be of a size and design that will enable the master to comply with his statutory obligations.

3.15 Other equipment

3.15.1 Other equipment currently used by the present Operator is being made available to Tenderers. Details are provided in the NorthLink document.

3.16 Scope of Project

3.16.1 The scope of the Project is limited to the market for sea transport services between the Northern Isles and the Scottish mainland. It is a matter for Tenderers themselves to consider the scope for generating additionale revenue streams over and above the minimum service requirements. This will need to be referred to in tenders, and will be acceptable provided that it did not prejudice or put at risk any of the requirements of the Invitation to Tender or Draft Grant Agreement. There will be no assessment of any additional economic value through additional services and costs in any variant Tenders over and above the minimum requirement. The award criteria are set out in para 2.22.

3.16.2 The inclusion of any additional activity will not affect the decision on selection of the Operator (that as noted earlier will be on the basis of the technically acceptable Tender that meets the award criteria). The inclusion by Tenderers of any additional activity generating extra revenue may, nevertheless, reduce the level of Grant required and thus indirectly improve the competitiveness of the Tender.

3.17 Commencement Date

3.17.1 It is the Executive's intention that the Grant Period should commence on 1 April 2006. Tenderers should prepare their Tenders on this basis. An earlier commencement date may be adopted by agreement.

3.18 Terminal Operation

3.18.1 Tenderers must set out the arrangements which will be in place for the manning of harbour facilities for the purposes of loading and discharge of vessels, including any arrangements related to the Services as agreed between them and the harbour authority.

3.19 Consultation with Users

3.19.1 Tenderers should consult Northern Isles based users' representatives prior to submitting their Technical Submission, in order that their proposals reflect user requirements. The Technical Submission must contain details of the groups consulted.

3.19.2 The Grant Agreement will require formal consultation on a regular basis with the key stakeholders involved and local consultation when changes are proposed by the Operator to the service timetable, or service patterns more generally.

3.20 Marketing

3.20.1 The Operator will be responsible for marketing the Services. Tenderers must provide a marketing plan as part of their Technical Submission. The Executive makes this a key part of the Service Specification because it is an important component to supporting the lifeline nature of the routes and the economic and social benefits which are being sought. Marketing is also important in encouraging usage of the Services by the tourist industry and helping to minimise the Grant requirement for the route.

3.21 Market Information

3.21.1 The Executive does not hold market information on all of the ferry and shipping services to the Northern Isles. The information provided in this document has been supplied by NorthLink about the services it has provided. It is for Tenderers to investigate the market themselves and appraise the opportunities and risks involved themselves. The Executive is not responsible for any other information which Tenderers may use.

3.21.2 Tenderers are encouraged, however, to investigate the market thoroughly. The Executive will be encouraging local interests in the Northern Isles to respond positively and consistently to any enquiries they receive from Tenderers for information.

3.22 Sub Contracts

3.22.1 The existing operation involves sub contracting of various services. Details are included in the Operator's Information. The Draft Grant Agreement allows sub contracts and Tenderers must include the details of any proposed sub contracting arrangements in their Tender.

3.23 Cyclists

3.23.1 The Executive's policy commitments (set out in the Executive Partnership Agreement of 2003) include provision to take the needs of cyclists into account in future rail and ferry franchises. This will be fulfilled by making appropriate arrangements for cycles on passenger vessels. NorthLink does not charge for cycles.

« Previous | Contents | Next »