[Text updated 14.00] Negotiations on the new PSO [Public Service Obligation] contract for flights out of Oban Airport to the Hebridean islands of Colonsay, Coll and Tiree have broken down.
This will see these lifeline air services suspended from 16th May 2015 onwards.
The negotiations were between Argyll and Bute Council. owner and operator of Oban Airport and the current air service provider, Hebridean Air Services Limited [HASL].
The current contract with HASL ends on Friday 15th May 15.
Over the past few months, Argyll and Bute Council has carried out what is described as ‘a complicated procurement exercise’ – and knowing this council. who could doubt the accuracy of that description.
This is the council that spent eight years and vast sums on consultants fees ‘negotiating’ over the Oban Transit Marina project that was part of the towns incoherent and risibly managed CHORD regeneration project – finally to achieve their purpose of binning it.
If this council wants something – even like simply having its way – there is no amount of public money it will not spend or waste to get it – on consultants fees, on litigation [mainly in defence] and on unused property assets.
If this council does not want something to happen, there is no amount of public money it will not spend in prevention strategies.
The only type of strategy Argyll and Bute Council seems unable to address is the absolutely crucial economic development strategy for an area that is dying on its feet.
The latest population statistics – released a couple of days ago at the end of April 2015, shows Argyll and Bute’s population down again. It is now estimated at 87,660, with the second worst percentage of overall out-migration in the eight council areas in Scotland similarly afflicted, second only to the Western Isles.
The council’s ‘complicated procurement procedure’ had hoped to get an operator for the new PSO contract to these islands within the £707,000 a year budget set – a miniscule amount, given what this council spends on consultants to produced figures to support what it does and does not want to do.
The realism of this budget can be seen from the fact that only one of the operators who had expressed an interests n this contract actually submitted a bid. This was the current service provider, HASL, whose bid was ‘well over’ the £2.121million budget that the three-year contract offered.
Two other propositions offered different services at variance from the tender specification but were still over the budget set and did not bid.
HASL might have submitted a bid for a reduced service but chose not to do so. The cost-benefit economics of delivery will have played their part in this.
The council is, of course, putting the blame on HASL, which seems a tad partisan as well as being wholly predictable.
The recent airport review showed that users of these services were very supportive of them and very happy with them. HASL fly the highly rated and robust workhiose aircraft – the Britten-Norman Islander. There aren’t many aircraft that can do this job as well.
The reality is that despite what the council say in trying to pass the blame parcel, there’s not a lot of margin in this sort of service.
Knowing how this council spends and wastes money and assets, Argyll will be bitterly amused to hear the purse-mouthed pieties they are uttering on this debacle. They say: ‘any subsidy has to provide best value for the public purse. It would be completely irresponsible to acquiesce to HASL’s unacceptable demands, particularly when its offer may raise legal issues in terms of overcompensation.’
They say: ‘HASL’s offer is based on a profit margin well above the industry norm for similar PSO services throughout Scotland. As a public body the council must take particular care with these kinds of contracts not to distort the private market. By providing a subsidy to this unacceptable and possibly illegal level there is likelihood that other private operators could challenge a contract award on this basis in court.’
What can be said is that if the Council had sold the Castle Toward estate to the community bidder for £1 million by the due termination point for negotiation of 31st December 2014, it would not only have had something in its reserves to achieve a solution to this stand off, keeping these island flights in the air. Instead of that, kit chnose to keep Castle Toward in continuing decline, spending over £22,500 a month on security and insurance to do so. That npw adds up to a waste of £90,000 already in this calendar year.
The council is now to gear up for another expensive and, no doubt, ‘complicated’ tendering process for this contract, describing its own activities as ‘actively pursuing the firms which previously expressed an interest’. This can only mean either:
- those who could see no worthwhile value for their business in the contract as it stood [and if the budget is immovable, the only way this can move is in a seriously reduced service to the islands];
- those whose proposals for a reduced service – still over budget – they had rejected earlier [and the only change to come here is a further reduction in service, since these companies did not even bid on their previous reduced bases].
The Council says that it must: ‘accept this short-term inconvenience in order to secure a long-term sustainable future for these services’.
The simple fact is that it is not the council that ‘must accept this short term inconvenience’.
It is the residents of these most remote of our inhabited Argyll islands who must endure – not ‘accept;’ – the ‘inconvenience’; and the council has absolutely no foundation for describing this ‘inconvenience’ as ‘short term’.
They can have no idea if, when or on what terms they will conclude some arrangement for what is clearly going to be a substantially depleted service.
It will be at least a year before any air service to these islands is reinstated.
- What happens to jobs at the airport – including the legendary Julie Angel who has now piloted the services for three operators? Without the Cat 1 PSO, many of these jobs are unncessary in what would then be a purely private airfield.
- Island children going to Oban High School and living in hostels will be largely unable to get home for weekends by ferry as they have been able to do on the ‘scholar flights’ provided by these air services. This impact on family relationships is no small price to be paid – by the powerless who must suffer it.
- What is the impact on health services, with these air routes to the islands clearly of real signficance in this issue?
- What is the impact on island businesses because that impact can only be negative?
- Argyll and Bute Council , as the owner of Oban Airport and of the island landing strips, charges the operator landing fees – three times a day. So a year’s service outage through this mess also sees loss of income.
This is a serious issue with ramifications for jobs, health services, school children, island businesses.
The best folk to talk to are those on the islands themselves .. they are the ones for whom this is most important.
The recent airport review showed that they were very supportive and very happy.
HASL have Islanders .. and few other aircraft do the job so well.
There really is not a lot of margin in this sort of service .. and ABC still charge them landing fees 3 times a day
so there is a loss of income as well as a loss of service.
There are a lot of local people employed who would not be needed without the Cat 1 PSO service .. as a private airfield they are unnecessary.
The airfield is also the first of the TIFF developments to encourage new large business investment to the area.. with several sites identified as being for airport related business as well as for island companies having a mainland base. Hopefully this will get sorted before too long or this is compromised too
The council is, however, still pouring the drinks on the Titanic, saying that: ‘The daily operation of Oban Airport will continue as normal. PSO flights account for only one-fifth of all air services from the aerodrome.’
And – the major compensation – ‘The council will also be moving forward with the access improvements to land adjacent to the airfield to enable the development of a much needed business park as well as pursuing a Glasgow to Oban service’.
Aye right. Success guaranteed? Delivered by Argyll and Bute Council?
