مقایسه بهره وری خدمات کشتی های دولتی و خصوصی در پنتلند بین سرزمین اصلی اسکاتلند و جزایر اورکنی

Case study analysis is applied to investigate the efficiency of competing ferry services operating on the Pentland Firth between Scotland and the Orkney Islands. One operator is state-owned and subsidised via a tender arrangement; the other competing service is privately owned, does not receive any subsidy and operates independently of any tender process. Yet both provide more or less the same service in terms of carrying passengers and vehicles across the Pentland Firth, one costing the taxpayer (i.e. via operating subsidy) and the other not. Here we investigate reasons why a state-owned ferry operator running a tendered service requires a subsidy, whilst a competing private operator does not, both serving the same market. Analysis of the respective transport operations serves to highlight key differences in operating cost structure between the competing operators. This reflects different corporate strategies and knowledge, also influenced by key stakeholders objectives in respect of the state-run operation, and by normal corporate objectives on the part of the private operator. The study offers better understanding of the remote island ferry sector from an interdisciplinary perspective, highlighting outcomes in relation to state subsidy, competition, and transport policies which have implications for delivery and management of remote island ferry services.

Provision of domestic ferry services linking remote island communities with their respective mainland is an essential feature of regional economic and social development. Ferry services can be delivered in a number of ways, although principally either through a state entity operation or via a private sector operator. The paper explains how domestic ferry services in Europe are governed by the EU Cabotage Regulation, which sets out Public Service Obligations, Public Service Contracts, and State Aid conditions, also offering analysis of evolving trends in ferry service delivery and procurement. The literature is explored investigating ferry user requirements, particularly in terms of service quality and customer selection criteria, thus helping to explain the key needs of service users. The focus then analyses ferry operators serving the Pentland Firth route between Scotland and the Orkney Islands, initially outlining the ports served and vessels deployed. The focus is on two directly competing operators, one of which is state-owned and subsidised by the state, the other being privately owned and entirely privately funded. This is followed by a comparison of each respective vehicle ferry operations, analysis of schedules and pricing, traffic volumes, and finally ferry CO2 emissions. The final part of the paper discusses the next tender arrangement for ferry services between Scotland and Orkney (for the period 2012–2018), and the role of ‘key stakeholders’ in influencing and formulating service specification. This is followed by discussion of the findings and implications for managerial practice, and finally conclusions.

The European Commission allows member states to impose PSOs in order to ensure provision of an adequate regular ferry service to and from a given location where community ship owners, in considering their own commercial interests, would not provide an adequate level of service or under the same conditions. Pentland Ferries' provision of an adequate level of service without the need for subsidy on the Pentland Firth would suggest that there is no need for a PSO (or therefore a PSC) on that route. In this instance the market is not failing to provide an adequate service. The Scottish government however has continued to set out a PSO, and in that PSO it designates different ports to be served than the ones served by Pentland Ferries, involving a longer, more exposed, and hence more expensive routing. The evidence suggests that the only rationale for this is due to the pressures from ‘key stakeholders’ each of whom has a vested interest in maintaining a more expensive routing and hence continuing a need for subsidy, and ultimately leading to market distortion and unfair competition. A top priority of ferry service users is frequency, followed by service quality and price. Service frequency (and convenience) is rated by users up to several times greater than price. This suggests that operators and public authorities should focus their efforts on improving service frequency and one way to achieve this is to reduce the route distance involved, where this is possible (e.g. selecting more optimal port locations). In the case of the Pentland Firth, transport authorities have actually supported the opposite outcome, in continuing to specify and subsidise longer and less frequent routes, which are also more expensive to maintain. Historically Orkney was served by a long-distance coastal steamer service from Leith and Aberdeen. As the A9 road has gradually been improved, traffic has shifted towards the shorter Pentland Firth ferry services. Continued subsidy of the long distance Aberdeen–Orkney ferry service therefore seems illogical, not least given the limited frequency (3–4 sailings per week for passengers, and once per day for freight), the high cost, plus greater CO2 emissions compared to road transport and the short ferry crossing over the Pentland Firth. This longer, less used and high cost service is also maintained at the insistence of ‘key stakeholders’. The evidence suggests an inappropriate vessel design for the state-owned operation on the Pentland Firth route. The passenger:car ratio is too high, so more crew are needed. Crew live on board, which means additional costs for accommodation and feeding. A very high newbuild price results in high ongoing capital/ship lease costs. The ‘lifeline’ route is twice as long as the Pentland Ferries route, so it incurs higher fuel consumption and cost; resulting CO2 emissions for the state-run service are over three times as much as the leaner private sector operation, whilst the far longer Aberdeen ferry services are even more inferior despite a shorter road distance. Poor ship design means that the state vessel is unable to carry hazardous cargo. The longer Pentland Firth route means a less frequent service can be offered, frequency being a key attribute desired by users. Indeed, the non-subsidised operator, Pentland Ferries, provides almost 30% greater frequency than the state-subsidised ‘lifeline’ operator. Pentland Ferries operation is clearly able to profitably function without the need for any subsidy simply because the company exhibits numerous efficiencies which the state owned operation does not. In other words, NorthLink's subsidy necessary to maintain its Pentland Firth service is simply a function of its relative inefficiency. The passenger and car markets have progressively shifted to the non-subsidised operator over recent years and by 2014 Pentland Ferries will most probably become the market leader in both segments. However, the subsidised NorthLink has recently taken back freight from Pentland Ferries onto its longer and higher CO2 emission Aberdeen route, using its subsidy to offer free or nearly free return carriage of empty trailers to volume customers such as supermarkets. This is not a sensible use of public subsidy. The study highlights the influence of ‘key stakeholders’, primarily vested interests, in seeking to maintain public sector inefficiencies. In this instance the key stakeholders include the islands council (OIC), the state-owned ferry operator, and the trade unions, as well as certain freight interests. Each of these entities effectively intercepts subsidy in one form or another and therefore wishes to see it continue, irrespective of the damage unfair competition does to the un-subsidised private operator. Protection of the Scrabster–Stromness subsidy is to be maintained over the next 6-year contract as these two ports have been designated as the only ports to be served by the next contracted operator. This decision to specify only those ports effectively blocks Pentland Ferries from making a lower cost bid, thereby stifling further innovation and private investment, and protecting the vested interest groups, though at the same time thwarting the needs of users (especially for higher frequency). State-owned ferry operators by their nature have an especially close relationship with their owners, who are also their contractors, resulting in a potential conflict of interest. In the case analysed here this seems to end up with the state favouring its own ‘company’, which is also a political institution that exists not in a real market, as any and all deficits are ultimately covered by the state, and no dividend is paid; risk is borne by taxpayers. The case analysed here serves to confirm that the state should only seek to operate transport services as a last resort and it would be far better (for users and the public purse) for public authorities to facilitate (instead of unfairly competing against) private sector operations, investment and innovation, with or without subsidy as required.