The Beginning of the End for Calmac?

The BBC reports today about the inquiry into the state subsidised ferry company Caledonian MacBrayne in an article titled "Calls for end to ferry monopoly". The European Commission is currently investigating the way the company is being subsidised by the government, stating that this is against the rules of fair competition. A first call to break up Calmac's monopoly has been submitted. Could this be the beginning of the end for the ferry company? A quote from the BBC website:

CalMac, along with Northlink Ferries, is under EU investigation amid complaints that subsidies they received breached competition law. "Subsidy is increasing all the time, but that subsidy is being used to finance high operating costs, it's not coming through in reduced charges to the user," said Prof Baird. "It means the economies of the islands aren't really benefitting. Who's benefitting here is, to a large extent, the ferry operator, staff and management." Prof Baird has gone further, calling for the privatising or scrapping of CalMac - but how would the loss-making lifeline routes be safeguarded and fares protected? "That is overcome quite easily by the imposition of tariff ceilings on certain routes, if prices can be agreed with an operator," suggested the academic. "The increases in prices can be kept to certain levels below inflation, perhaps, like the Isle of Man does." He added: "In almost all other parts of the world, ferry services are provided by the private sector. They are reliable and there's little public concern about them continuing." The European Commission investigation is expected to last up to 18 months, but these early submissions may set Brussels on a course of demanding radical reform of Caledonian MacBrayne - for so long as much a part of the Highlands and Islands as rain and midgies.

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