Site icon Mull & Iona Ferry Committee

Two ferries, two buyers, same shipyard – but two very different prices.

Whilst spending a fair bit of time investigating how much better ferry services are in Norway compared to Scotland, we have come across a current and very obvious example of why that is so.

Last month CMAL announced that the contract to build two new ferries for Islay had been awarded to Turkish shipyard Cemre. Each of the pair of diesel-electric ferries will carry 107 cars and 350 people, and cost £52 million pounds. This week, the Norwegian ferry operator Torghatten Nord has announced an order from the very same Turkish shipyard for a ferry of slightly larger capacity – 120 cars and 399 passengers.

But we have learned that despite being such similar vessels being built beside one another in the same yard at the same time, the Norwegian ferry will cost as little as HALF the CMAL vessels, at £26 – £31 million pounds.

So what is it that can account for such a price difference for such similar sized ferries?

Is the Norwegian ferry less capable?

Well, no. In terms of passenger and vehicle capacity the Norwegian ferry is a little greater, and both are being designed to comply with Euro-B rules – ie they are both designed to cope with the same kind of wind and wave conditions, and both will be operating relatively open-water routes. The Norwegian ferry will be operating services from the port of Bognes to Lødingen on the Lofoten islands, above the Arctic circle and an open-water crossing of 60 minutes. The Norwegian route is shorter than the journey to Islay, but no less exposed. The Norwegian ferry will be a little slower in the water at 14 rather than 16 knots, but it will make up for that by turning around in port in half the time thanks to a better car deck design and a bi-directional hull.

Is the Norwegian ferry using a cheaper and more polluting propulsion system?

No. In fact, the Norwegian ferry will have a similar diesel-electric hybrid system to CMAL’s Islay ferries, but more advanced and with far larger battery packs. The Norwegian ferry will recharge those batteries in port in 15 minutes using a 7500 kilowatt quick-charge connection that will enable it to make the entire crossing on zero-emission battery-electric power (Diesel will be only for back-up). The 15 mile route will be a new record for battery-electric ferry operation. (Norway will have converted all of its domestic ferry routes to zero-emission systems by 2030.) So rather than being cheap and dirty, the Norwegian ferry is at the cutting edge of low-emission propulsion.

CMAL New Islay Ferry, circa £52 million
Torghatten battery-electric ferry, circa £26-£31 million

Maybe the Norwegian ferry doesn’t operate for as long each day as the CMAL ferries? Could that enable some cost-cutting?

Well, No. Actually, the Norwegian ferry will be operating around the clock, putting on 18 crossings per day and travelling 260 miles every 24 hours. The Islay ferries by contrast will cover half that distance and will only operate for around 14 hours per day.

So what is it that CMAL have designed into their ferries that makes them cost so much?

CMAL announced what they expected to pay for the Islay vessels in their corporate plan 12 months prior to the tender being issued.

It’s also worth pointing out that Torghatten took 15 months from initiating the design work to placing the order. CMAL took 33 months.

This is one of the root causes of the ferry crisis

The current fiasco of ferry provision in the Hebrides has many causes. But the fact that we pay twice as much for our ferries than other ferry operators (even when they arrive on budget) is not insignificant. Together with ferry industry experts, we have repeatedly said that it’s not a lack of money that is the problem – it’s that the money is being spent very, very badly. Scottish Government have committed to spending £290 million on new ferries in the coming years – but how many ferries will we get for that? We could have 11 ferries of the Norwegian variety, or maybe 5 designed by CMAL.

This difference in cost is not because CMAL’s designers are not capable, but because they are designing to a completely different set of ‘requirements’. Torghatten are a private ferry company; one of around five that compete for public service ferry contracts in Norway. They compete with one another on the basis of who can offer the best service most cost-effectively. Government set ticket prices, zero emissions targets, minimum timetables, and put each individual route out for competitive tender (rather than a whole network). So Torghatten have tasked their designers with creating a ferry that gives them a competitive advantage. By designing to enable longer operating hours, zero emissions, and more frequent sailings for less build cost, Torghatten won the tender.

CMAL’s designers were given a completely different set of criteria – rather than being told to design for best operating productivity, they were told to design for a crew of 31. Rather than being told to design for maximum operating hours, they were told to design for the pre-existing timetable. Rather than being told to design for zero-emissions, they were asked to design for lower emissions. Rather than being told to make the design simple and repeatable, they were told to build the largest vessel possible, with mezzanine decks and complex vehicle ramps, among other things.

Is there a solution to this?

The way to speed up ferry renewal is to make the ferries more affordable. In order to make them more affordable, naval architects have to be working to a better set of priorities. They should be focussing on operational productivity, value for money, fuel efficiency and emissions. Norway encourage those priorities by having an unbundled ferry tendering process, enabling true competition at tendering time. (For more on that subject, see here.) .

If we continue on the current course, nothing will change. The 801/2 fiasco is an extreme symptom of a dysfunctional ferry procurement process that designs in waste, complexity and high cost. As can be seen by this comparison it is being repeated again in the vessels for Islay; though this time the contract has been given to a competent shipyard.

You can see the press release concerning the new Norwegian ferry here.

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