(Added section below) This is an ‘Are you sitting comfortably?’ moment since, for those with a care to good practice in corporate financial management, this is something of a stunner.
Strathclyde Passenger Transport have issued the agenda for a meeting of their Operations Committee tomorrow (9th March 2012). (op090312_agenda5 )
It recommends that the committee give a further £80,250 plus VAT, now at 20%, which wold take the total proposed for the taxpayer to fund to £96,300.
The reasons given are that local mariners have raised concerns about the ability of the ferry proposed to handle the prevailing conditions on the route, reporting ‘…tidal and wind conditions, particularly at Kilcreggan, to be challenging for vessels of this class.’
Many concerned will be amused by the spin the agenda paper puts on the nature of the representations received on this:
‘The representations received have been unanimously supportive of enhancing the design characteristics of the vessel (to a Class 4) thereby increasing service reliability, which is fundamentally the key concern to all parties.’
Whether the authors of the representations i question find this a recognisable rendering of their positions remains to be seen.
The proposal is that SPT now fund the cost of upgrading the vessel – which the contractor. Clydelink has advised them – if progressed now – can be completed in time to meet the 1st April 2012 commencement date of the new operation.
The agenda says that SPT will now require ‘to take a security over the vessel to ensure that it remains on the SPT service for the duration of the contract as a minimum’.
The amount recommended to the operations to agree for taxpayer funding amounts to 20% of the cost of the completed class 4 vessel, with the operator paying 80% 0 the full cost of the proposed class 5 vessel acce[ted at tender.
There are serious questions to be asked about this proposed action.
What is the legality of following a tendering process by offering additional funding to the winning bid in support of a provision which was not put to tender?
The timescales of the building of a new ferry – with the contract only awarded on 10th February – and to be delivered for guaranteed entry to service on 1st April, with an upgrade to class 4 added to the job, are difficult to comprehend.
Two things are unarguable.
SPT’s management of this entire matter casts the most serious doubt over their competence.
It also raises grave doubts on the standard of their care for the safety and convenience of the travelling public in their charge.
It may well be grimly fitting that this service comes into operation before noon on 1st April.
Councillor Freeman’s email to concerned constituents
In publishing this email with the permission of Councillor George Freeman, we have removed the names of its addressees as we do not have their permission to identify them. Otherwise this is the full text of the councillor’s communication on this matter.
‘Please find attached a copy of a report (PDF and Word versions) on the Gourock – Kilcreggan Ferry Service that is due to be considered at a meeting of the SPT Operations Committee in Glasgow tomorrow. To say that I am amazed at the proposal to put £80,250 plus VAT of tax payers money into improving the classification of the proposed Clydelink vessel after the tendering and contract procedures have been completed would be a significant understatement.
‘It is clear that the possibility of such funding being made available was not made available to all those bidding for this contract during the tendering process. This has allowed one company to submit a tender based on a lower (cheaper) classification and then request public funding from SPT to upgrade the vessel to the higher classification. It would be surprising if this complied with the EU procurement regulations or the Public Contracts (Scotland) Regulation 2006. With reference to the information that was passed to us on the possibility of legal action being taken with regards to this issue, I believe that this certainly increases the possibility of such action. It also increases the possibility of complaints being submitted to the Audit Commission and the Public Services Ombudsman.
‘You will note that in the fifth paragraph of Section 2 of the report, it states that: “The representations received have been unanimously supportive of enhancing the design characteristics of the vessel (to a Class 4) thereby increasing service reliability, which is fundamentally the key concern to all parties”. I certainly do not recall any reference to Class 4 in any of our discussions / correspondence and there certainly was no suggestion that any public funds should be used to improve the classification of the vessel.
‘You will also note that at the fifth paragraph of Section 2 of the report, it states that “While all normal pre-contract conditions were met and the proposed new vessel would be certified to the same MCA classification as the existing ferry, local mariners consider the tidal and wind conditions, particularly at Kilcreggan, to be challenging for vessels of this class”. My understanding is clear that the vessel being provided by Clydelink was NOT of the same MCA classification as the existing ferry (Seabus) and would not have been certified as such. I have been informed that the existing ferry was built to EU Directive for Domestic Passenger Vessels (EU Directive 98/18). Even at the meeting with SPT, Clydelink confirmed that the proposed new ferry was not being built to this specification. I have no doubt that MCA Greenock will also be able to confirm the information relating to the classifications.
‘Although we have been asking questions on a daily basis since we met with SPT officials on 29 February, why has no one thought to tell us about this proposal when the report was produced within 24 hours of our meeting with SPT on 1 March 2012? We have had to discover this information by chance. For the report to be produced on 1 March 2012, this option must have been discussed at the private meeting with Clydelink on 29 February (just prior to out meeting with SPT and Clydelink) or early on the day after that meeting. As you will also be aware, there are still many other outstanding answers to questions that we have posed relating to this issue and to who knew what and when over the past 10 months that this issue has been under discussion.
‘To date, we have also had no reply to the question that has been posed as to whether this vessel is new build and complies with the decision of the Operations Committee when awarding this contract? Well over a week has now passed since we met with SPT and we still have had no feedback as to whether the agreed urgent contact was made with MCA Greenock on this matter or not. We are still not aware if SPT have asked the simple question of MCA Greenock as to whether this vessel is new or not. If they have asked the question, then why are they withholding the answer from us? This just leads to more mistrust on this whole process. If confirmation cannot be obtained from MCA Greenock that this is a new vessel, then this fails to comply with the decision of the Operations Committee when they approved the award of this contract to Clydelink.
‘You will note that the report states that the £80,250 plus VAT equates to approximately 20% of the cost of the new vessel. By my calculation this indicates that the cost of the new (modified) vessel is therefore only £400,000 plus VAT. The report also states that Clydelink is funding the remaining 80% which would be the cost of the proposed Class 5 vessel. It therefore follows that the cost of the Class 5 vessel proposed by Clydelink would only have been £320,000 (without the proposed modification).
‘You will also note that although it is stated that SPT will take security over the vessel and that conditions will apply, there is no reference as to what these conditions will be.
‘I am sure you will agree that all of the above just adds to the concerns over the whole process relating to the renewal of this contract. Your comments would be welcome.’
