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Ferry company in jeopardy over subsidies

Ferry Online Travel News 25/03/2008

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CalMac faces shut down by EU

If the European commission has it way and wins a currently deliberating lawsuit against the Scottish government, the Caledonian MacBrayne public ferry company could be put out of business, cutting off vital lines of transportation between the Scottish mainland and outlying islands. The issue stems from subsidies given to the ferry operator from the Scottish government, which may or may not contravene European Union rules.

Some experts, when asked about the potential EU shutdown of the company called such a result scandalous and outrageous. Some industry pundits have even dared the EC to go to court over the matter. Scottish ministers have been facing legal action for a few years now over subsidies awarded to CalMac, which EU officials say break EU laws concerning a member state’s government subsidizing a monopoly. They say it also goes against maritime regulations.

CalMac, which is effectively owned by the government, was given 43 million tax-payer pounds this year to put to use in 24 of its routes to island around the Clyde and the Hebrides. Whatever the courts do or do not decide, if the thing goes sour, the only certainty is that it will be the passengers that suffer.

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