Building on 165 years of success

Speaking to Justin Merrigan, Martin Dorchester reflects on CalMac’s plans for improving services after securing an operating contract on Scotland’s west coast

Building on 165 years of success

This article was first published in the Spring/Summer 2017 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.

Iconic Scottish ferry operator Caledonian MacBrayne Ferries (CalMac) is set for a year of change in 2017 after securing a £900 million (US$1,125 million) contract to continue operating the Clyde and Hebrides Ferries Network on Scotland’s west coast.

Named the successful bidder for the new contract in May 2016, state-owned CalMac competed with private firm Serco Caledonian Ferries for the Scottish government contract to run the services. CalMac already operated the west coast routes, which include the Inner and Outer Hebrides. Covering an eight-year period from 1 October 2016, the contract includes a separate agreement which sees CalMac taking responsibility for ferry operations at 24 ports on behalf of Caledonian Maritime Assets Ltd.

Winning the tender was a massive achievement for all involved, explains CalMac’s managing director Martin Dorchester. “Our competitor was the multinational public services specialist Serco, and many people thought we had met our match. We were never complacent, but always believed that our expertise, quality and deep knowledge of the service would shine through.”

The new contract provided CalMac with an excellent opportunity to put forward new ideas for how things could be done.

“Our bid was based on key themes including retaining safety at the heart of our operation, improving operational efficiency, growing revenue and offering even higher levels of customer satisfaction and community engagement,” comments Dorchester. “Our planned innovations will mostly be implemented in the first two years. This includes maximising opportunities for local companies and social enterprises to bid for supply contracts; introducing smart and integrated ticketing; and investing £6 million (US$7.5 million) in onboard, port and passenger area improvements.”

One of the latest innovations has been the introduction of wi-fi in all ports and onboard all ships – not an easy feat with remote routes without mobile signal and temperamental landlines. “This major investment has enabled staff to operate anytime, anywhere with access to network services such as corporate information systems, printing and internet,” says Dorchester. “Over the next eight years we’ll see the real benefit of this.”

A range of operational changes are planned, including expanded timetables, longer working days, and ferries working harder than ever.

“Our technical department does a great job keeping on top of maintenance and managing increasingly obsolete technology, but we need to be smarter about keeping the ships operating,” comments Dorchester. “We’re radically shaking up our refit and maintenance planning by partnering with shipyards to plan long-term maintenance activities to minimise reactive maintenance and improve vessel reliability for customers.”

Additionally, Ferguson Marine Engineering is building two CalMac ferries at its shipyard on the Clyde, with the first ferry to be delivered in summer 2018. Each is designed to carry 127 cars or 16 HGVs, or a combination of both, and up to 1,000 passengers. The dual-fuel ferries will be able to operate on LNG and marine diesel.

“It’s very exciting to get new vessels, not least because increasing the size of our fleet gives us more options during refits and in periods of weather or technical disruptions,” Dorchester says. “Plus, it’s great to see shipbuilding back on the Clyde.”

Happily, Dorchester has also committed CalMac to continue investment in officer cadets and rating apprenticeships, while partnering with local maritime training organisations to further develop its qualified and skilled workforce. This will create a strong maritime training economy.

What challenges does CalMac face as a public service operator that a private operator might not? “There is more commonality than difference; it’s about running a good business,” answers Dorchester, who has worked in both the public and private sectors. “However, as a publicly owned commercial company delivering a government contract to provide vital lifeline services, we face significant scrutiny from our customers and stakeholders, including the Scottish Ministers.”

“Complaints can be escalated to Scotland’s First Minister at the click of an e-mail, so building positive relationships with customers and local communities is a must,” Dorchester adds. “To support our efforts in this area, we’ve created a new role of director of Community and Stakeholder Engagement and we’re developing a Community Board to involve communities in strategic matters that affect them.”

Never a business to rest on its laurels, CalMac closed 2016 with its sights on another contract. “The next contracts in our sights are the passenger-only service between Gourock and Dunoon and the Northern Isles contract, which CalMac’s sister company NorthLink Ferries operated until 2012 when the contract was awarded to Serco,” says Dorchester.

The Clyde and Hebrides Ferries Services (CHFS) contract is the second £1 billion (US$1.24 billion) contract CalMac’s parent company David MacBrayne has won recently. “A joint venture between David MacBrayne and GBA – operating as Solent Gateway – won the contract to operate Marchwood Military Port in Southampton for the next 35 years,” Dorchester comments. “Its location will be familiar to many cruise operators and customers as it sits on the Solent directly opposite Southampton cruise terminal.”

CalMac hopes that profits from this venture, which offers substantial commercial scope, can be reinvested within the company for the long-term benefit of both customers and staff.

“I was particularly proud to win this contract with GBA as it puts down a strong marker that David MacBrayne has more strings to its bow than just west coast ferries, and it’s good to see a government-owned company winning competitive tenders against market leading organisations,” remarks Dorchester.

Addressing environmental concerns is on every company’s agenda and CalMac has embraced its obligations fully aware that its routes criss-cross some of Europe’s cleanest waters. The business is an active member of Marine Scotland, working closely with the organisation to formulate environmentally friendly policies.

Currently, CalMac’s fleet includes three hybrid ferries and the next two major newbuilds will also use hybrid technology. “CalMac is the first UK ferry company to roll out a state-of-the-art fuel management system across a substantial proportion of its fleet to save a minimum of 1,800 tonnes of carbon dioxide annually – the equivalent to 4,285,714 miles in an average family car,” Dorchester says.

With two big contracts under his belt, Dorchester announced his intention to step down at the end of March 2017. However, his plans to were put on hold following the Scottish Government’s announcement that it intended to investigate the impact of applying an EU exemption that would potentially remove the requirement to put ferry services out to tender and have implications for the company’s structure. “Having considered the challenges and opportunities presented by this review, I have taken the decision to stay and lead the organisation through this new chapter,” says Dorchester. “I look forward to continuing to work with my team and our stakeholders to secure the best possible results for our employees, passengers and communities, as well as the taxpayer.”

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Justin Merrigan
By Justin Merrigan
01 August 2017

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