HC Deb 23 March 1994 vol 240 c327W
Mr. Gallie

To ask the Secretary of State for Scotland whether he intends to set targets for Caledonian MacBrayne for 1994–95.

Mr. Lang

I have decided to set the following targets for Caledonian MacBrayne for the year 1994–95. The company will be required to achieve as a financial target that fares income should meet at least 60 per cent. of operating costs including depreciation charged on a replacement cost basis and provision for an 8 per cent. foregone rate of return on capital. As an efficiency target, the company will be asked not to exceed a maximum unit cost of £0.86 million per passenger car unit capacity kilometre. As a quality of service target the company will be asked to achieve a figure of 96.5 per cent. of sailings arriving on time, excluding sailings which are delayed or cancelled for safety reasons, for example, adverse weather conditions. I consider that the setting of these targets will provide a clear framework for the operation of the company in 1994–95, consistent with the objectives of securing continued improvement in operational efficiency and standards of service.

Mr. Gallie

To ask the Secretary of State for Scotland what proposals he has for shipping subsidies for sea transport services in the Highlands and Islands in 1994–95; and if he will make a statement.

Mr. Lang

Subject to parliamentary approval of the estimates, I propose to make available in 1994–95 total subsidy provision of £15.673 million. The deficit subsidy for Caledonian MacBrayne will be £5.742 million. For services to Orkney and Shetland, tariff rebate subsidies of up to £8.557 million will be made available. Up to £1.374 million will be available for other coastal shippers operating on the West Coast of Scotland.

The level of provision proposed for Caledonian MacBrayne for 1994–95 reflects a reduced requirement for revenue deficit subsidy from the 1993–94 level, following the introduction of new financial arrangements for the company and an expected improvement in trading performance and operational efficiency. Capital grants of up to £7.3 million will also be made available to the company in 1994–95 for expenditure on the new vessel currently under construction for the Ullapool-Stornoway route.

The increased level of financial support for services to Orkney and Shetland which I made available in 1993–94 is maintained.