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Road Equivalent Tariff for ferries
13/08/2007
A study to establish the most effective and sustainable structure for a Road Equivalent Tariff (RET) pilot scheme for setting ferry fares was announced today.
RET involves setting ferry fares on the basis of the cost of travelling an equivalent distance by road. High ferry fares have been seen by many as a barrier to economic growth on the islands.
In Stornoway Mr Swinney said:
"This Government recognises the vital importance of lifeline ferry services in supporting Scotland's island communities. We understand the genuine concerns from our remote and fragile communities about the affordability of ferry travel and the impact this has on islanders.
"I believe that the way forward is to consider the benefits of introducing a Road Equivalent Tariff (RET) approach to setting fares in Scotland. This approach would not just benefit islanders by providing cheaper fares but could also boost island economies by attracting tourists and supporting businesses.
"I am pleased to announce today that we have moved ahead to fulfil our commitment to carry out a study into the benefits of RET. As part of that study we will undertake a pilot scheme on one or more of the routes between the mainland and the Western Isles."
The study will initially make recommendations on the form the pilot exercise should take, including the route(s) to be selected, the fares to be charged and the length of the pilot, and provide a preliminary assessment of the potential costs and benefits.
The consultants will also be asked to monitor the operation of the pilot and, once it is finished, provide an evaluation of the exercise. This will allow decisions to be taken on future ferry fares in Scotland. A report on options will be completed by end 2007 as the main output of the first phase of the study.
The first phase of the study will:
- review approaches to fare setting for public service ferries in other countries, including the RET approach
- offer definitions of RET that could be applied to all categories of passenger and vehicular traffic in the context of ferry fares for the Clyde and Hebrides and Northern Isles routes which are subsidised by the Scottish Executive
- provide an initial analysis of the potential impacts (especially in economic and social terms) of the introduction of an RET approach
- make recommendations on the design and implementation of a pilot study applying RET on one or more of the routes connecting the Scottish mainland and the Western Isles (ie Stornoway to Ullapool, Tarbert/Lochmaddy to Uig (Skye) and Castlebay/Lochboisdale to Oban), including the choice of route(s), anticipated costs, start date, length of the pilot, operational constraints and any capacity constraints that may emerge
- carry out any baseline information gathering in advance of the pilot that is considered necessary for subsequent monitoring and evaluation purposes
The second phase of the study will involve the monitoring of the pilot study, including the gathering of traffic statistics and information from, for example, ferry users and local employers (including the freight and tourist sectors) designed to allow the impact of the pilot (especially in economic and social terms) to be assessed.
The third phase of the study will involve an evaluation of the pilot, making use of the information gathered through the baseline and monitoring exercises.
In addition to assessing the impact of the pilot, the evaluation should attempt, as far as is possible, to quantify both the costs and benefits which would arise should RET be applied on a permanent basis and rolled out to other ferry routes in the Clyde and Hebrides and Northern Isles networks and the likely longer-term impacts of such a roll out.
This stage should seek to identify any capacity constraints that would emerge from a permanent roll out and quantify the cost of increasing the capacity to meet demand (e.g. through additional or larger vessels and new shore infrastructure).