Options - Structural change

Future Options: Structural Reform

When undertaking our review of international comparators and subsidised services in Scotland, we identified the following key differentiating factors:

  • Regulation
  • Integration
  • Privatisation
  • Decentralisation.

We have discussed regulation within section 5. The remaining variables that were observed in the benchmarking exercise – integration, privatisation and decentralisation – will be addressed in this section of the report.

The themes identified are not exclusive of one another and could conceivably all feature in a future model for Scotland’s ferries sector. However, for the purposes of clarity, for this exercise we have looked at each independently.

Integration

Some or all of the organisations within the existing Tripartite structure could be integrated or assimilated.

Examples: TfNSW, BC Ferries, Scotland’s roads network.

  • Assimilate CMAL into TS
  • Scottish Ferries Co. – Integration of CMAL and DML
  • CHFS Ferries Co. - Integration of CMAL and CFL

Privatisation

Sell CMAL / CFL and / or DML (or their assets) and thereafter procure ferry services directly from the private sector, which would be responsible for sourcing their own vessels and operating the CHFS network under contract with the SG.

Examples: Norway, New Zealand, UK rail industry.

  • CMAL assets are sold to the private sector
  • CFL does not bid on the next CHFS network and Ministers relay on private sector service delivery
  • Cease focus on non-core commercial operations

Decentralisation

Devolve some / all powers to local authorities who would procure some or all of their own ferry services.

Examples: Norway, Roads (A, B and C roads)

  • Unbundle and decentralise service contracts
  • Unbundle and decentralise service contracts and assets
  • Major routes kept with central government and minor routes with local authorities

We have included an overview of each of the options, including the corporate structure, roles and responsibilities and examples of how this would work in practice. In the next chapter each option will be evaluated.

Assimilation of TS and CMAL

The assimilation of TS and CMAL would bring together the strategic policy setting function of TS with the asset ownership function of CMAL.

The assimilation (‘assimilation’ is the absorption of one Government entity by another) of TS and CMAL would bring together the strategic policy setting function of TS with the asset ownership function of CMAL. CMAL would assimilate into the TS ferries function and all staff and assets (both vessels and harbours) would transfer across.

The assimilation of CMAL into TS would mean that the oversight function currently performed by CMAL with regards to monitoring the condition of vessels leased to operators would pass to TS as the direct owner of the assets.

The CHFS contract would be tendered in line with current procurement legislation and vessels would be leased from TS rather than CMAL.

This is similar to the Scottish roads network, whereby major trunk roads are owned by the SG and maintenance is procured via four separate contracts.

Corporate Structure

Corporate structure - Assimilation of TS and CMAL
Corporate structure - Assimilation of TS and CMAL - as described in text below

CMAL is absorbed into TS, which assumes all responsibilities previously held by CMAL, including asset ownership. TS leases vessels directly to the operator for use on the network. DML continues to be wholly owned by Scottish Ministers. DML’s wholly owned subsidiary, CFL, delivers ferry services under contract with TS, for which it receives subsidy payments.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares - TS sets fares
  • Vessel procurement - TS is responsible for vessel procurement
  • Vessel ownership - TS owns the vessels
  • Harbour/ports ownership - TS owns harbours and ports previously owned by CMAL
  • Procurement of operating contract - TS is responsible for procuring contract

CFL:

  • Vessel maintenance - Operator is responsible for vessel maintenance
  • Harbour/ports operations - Management of ports is with the operator
  • Ferry operations - Operator is responsible for operations

Transport Scotland: Trunk Roads

TS is the asset owner of the major trunk roads in Scotland. It procures both maintenance services and major capital projects from the private sector. Maintenance contracts are split into four geographic areas of Scotland and are for a duration of eight years. Major capital projects such as the A9 Duelling or the Forth Replacement Crossing were developed in line with the SG STAG appraisal process. TS appoints both technical and financial advisors when procuring major capital projects to ensure it has the relevant expertise available to procure the services.

Integration of CMAL and DML

The integration of the asset owner and operator would bring together the two commercial arms of the Tripartite into a single Government owned organisation.

CMAL and DML could be integrated to form a single Government-owned organisation, which for the purposes of this review will be referred to as “Scottish Ferries Co”. Integrating CMAL and DML could facilitate a more joined up approach to service delivery. Under this option Scottish Ferries Co could maintain a separate subsidiary for commercial activities not core to the CHFS contract.

The integration of the two organisations would remove the need for the contracts currently in place between the two bodies, including: lease agreement for vessels; maintenance agreement for vessels; harbour dues; and harbour maintenance. It would also remove the oversight function CMAL currently has over CFL with regards to the condition of the vessels.

The new company, as the asset owner, would be responsible for ensuring the assets are maintained and upgraded as required.

The new company would require the appointment of a new board of directors, a process which would be overseen by TS. The skills matrix of the board should be reviewed to ensure that it has the expertise to govern an organisation of this nature and should include representation from both TS and the island communities.

Corporate Structure

Corporate structure - Integration of CMAL and DML
Corporate structure - Integration of CMAL and DML - as described in text below

Scottish Ferries Co is formed through the integration of CMAL and DML. Scottish Ferries Co is wholly owned by Scottish Ministers and receives funding from Ministers for its capital expenditure and operating expenditure. Scottish Ferries Co manages its commercial activities through a subsidiary, which is separate from its core operations related to the delivery of the CHFS contract.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares – TS sets fares
  • Procurement of operating contract

Gov Co:

  • Vessel Procurement - Scottish Ferries Co is responsible for vessel procurement
  • Vessel maintenance - Scottish Ferries Co is responsible for vessel maintenance
  • Vessel ownership - Scottish Ferries Co owns the vessels
  • Harbour/ports ownership - Scottish Ferries Co owns harbours and ports.
  • Harbour/ports operations - Management of ports is with Scottish Ferries Co
  • Ferry operations - Scottish Ferries Co is responsible for operations

Scottish Water Business Stream

Scottish Water is the wholesaler of water in Scotland, whilst its Business Stream subsidiary is one of a number of licensed providers of water retailers. Scottish Water owns and operates the country’s water infrastructure, while Business Stream provides retail water and sewerage services to the country’s businesses. Although both are part of the Scottish Water group, they are legally separate companies, with Business Stream pursuing commercial ventures. The relationship between Business Stream and Scottish Water is monitored by the regulator, the Water Industry Commissioner for Scotland (WICS).

Integration of CMAL and CFL

CMAL and CFL could be integrated to form a “CHFS Ferries Co” that would focus exclusively on the delivery of the CHFS contract. DML would be separated from CFL / CHFS Ferries Co to focus on other commercial ventures and potentially prepared for sale.

CMAL and CFL could be integrated to form a new Government-owned organisation, which for the purposes of this exercise will be identified as “CHFS Ferries Co”. Integrating CMAL and CFL could facilitate a more joined up approach to service delivery and would mean that the operator directly owns the vessels used in its operations.

The new company, as the asset owner, would be responsible for ensuring the assets are maintained and upgraded as required.

Under this option CHFS Ferries Co would focus exclusively on the delivery of the CHFS contract. DML would be separated from CFL / CHFS Ferries Co and focus on other commercial ventures. Separating CFL from DML in this way could help to facilitate the SG’s divestment of DML, should there be a market and a desire to do so on the part of the SG.

Corporate Structure

Corporate structure - Integration of CMAL and CFL
Corporate structure - Integration of CMAL and CFL - as described in text below

CHFS Ferries Co, formed through the integration of CMAL and CFL, is wholly owned by Scottish Ministers. CHFS Ferries receives funding from Ministers for its capital expenditure and operating expenditure related to delivery of the CHFS contract. DML, wholly owned by Scottish Ministers, operates as a separate legal entity and is responsible for managing other commercial ventures that are distinct from the CHFS contract.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares – TS sets fares
  • Procurement of operating contract - TS is responsible for procuring contract

Gov Co:

  • Vessel Procurement - CHFS Ferries Co is responsible for vessel procurement
  • Vessel maintenance - CHFS Ferries Co is responsible for vessel maintenance
  • Vessel ownership - CHFS Ferries Co owns the vessels
  • Harbour/ports ownership - CHFS Ferries Co owns harbours and ports previously owned by CMAL
  • Harbour/ports operations - Management of ports is with CHFS Ferries Co
  • Ferry operations - CHFS Ferries Co is responsible for operations

International Benchmarking

BC Ferries, as well as operators in Norway and Auckland, own their own vessels. As owners of the vessels and holders of the asset risk, these operators are also responsible for procurement and maintenance.

In British Columbia, BC Ferries benefits from a 60 year Direct Award contract. If a ferry becomes surplus to its needs, due for example to a change in the contract specification, the Government is obliged to purchase the vessel at Net Book Value.

CMAL sold to the private sector

CMAL would be sold to the private sector and vessel ownership would be privatised. Sourcing vessels would become the responsibility of the operator.

Under this model, CMAL is sold to the private sector (“Vessel Co”) and vessel ownership would be privatised. CMAL’s technical function would move to CFL or TS. Vessel procurement would become the responsibility of the operator. Operations of the CHFS and NIFS network would continue to be tendered in the normal way and the operator would be responsible for sourcing its vessels, either via leasing or purchase.

This model is similar to the rail industry in which ROSCOs own the rolling stock and lease it to TOCs. Leases are let on either a wet (includes maintenance) or dry (excludes maintenance) basis, and assets are maintained in line with the lease agreement in place.

In order to ensure that vessels are replaced and upgraded, TS could place requirements in the contract for vessel upgrades and provide enhanced subsidy to fund this. In Norway, procurement rules set by central government have driven investment by operators in low carbon vessel infrastructure.

CMAL also owns a number of harbours, under this option ownership for these would be passed to the local authorities or independent harbour authorities.

Corporate Structure

Corporate structure - CMAL sold to the private sector
Corporate structure - CMAL sold to the private sector - as described in text below

CMAL is dissolved, with its vessels sold to the private sector and its harbours passed to local authorities or independent harbour authorities. The technical functions of CMAL moves to CFL or TS. CFL and DML continue to be wholly owned by Scottish Ministers. For delivering the CHFS contract CFL receives subsidy from Scottish Ministers. CFL sources its vessels from the private sector (“Vessel Co”).

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares - TS sets fares
  • Procurement of operating contract - TS is responsible for procuring contract

CFL:

  • Vessel Procurement - Private sector procures vessels and leases them to CFL. TS sets vessel specification in tender and operator inputs into design
  • Vessel maintenance - CFL or the vessel owner could hold responsibility for maintenance
  • Ferry operations - CFL retain responsibility for operations

Vessel Co:

  • Vessel Procurement - Private sector procures vessels and leases them to CFL. TS sets vessel specification in tender and operator inputs into design
  • Vessel maintenance - CFL or the vessel owner could hold responsibility for maintenance
  • Vessel ownership - Vessel Co owns vessels
  • Harbour/ports ownership - Local Authorities (LAs) / independent harbour authorities own harbours and ports
  • Harbour/ports operations - LAs / independent harbour authorities are responsible for harbour / port maintenance

UK Rail

In the UK rail industry, the Government’s Operator of Last Resort (OLR) function lease rolling stock from privately owned ROSCOs. This would be similar to the relationship between CFL and the ROSCO outlined in this option.

The procuring authority, in the case of rail either the DfT or TS, plays a key role alongside the ROSCOs in forming the specifications for procurement of rolling stock. For example, TS specified the class 385 carriages supporting the electrification of the Edinburgh-Glasgow route on the ScotRail Franchise.

CFL does not bid on the next CHFS contract

Ministers decide CFL will not bid on the next CHFS contract. TS would procure a contract for ferry services from the private sector through a competitive tendering process.

Under this model CFL would be wound down once the CHFS2 contract comes to an end. This could be the case if Ministers decide not to bid on CHFS3 or if CFL were unsuccessful in bidding for the next contract. TS would procure the CHFS contract from the private sector through a competitive tendering process.

Vessel ownership and procurement would remain with the public sector under CMAL. Harbour / ports ownership, operations and maintenance would remain with CMAL.

The operations contract would stipulate that the successful bidder must lease the required vessels from CMAL. The contract could permit the operator to feed-in to future vessel procurements, including the design specification.

Corporate Structure

Corporate structure - CFL does not bid on the next CHFS contract
Corporate structure - CFL does not bid on the next CHFS contract - as described in text below

Under this scenario it is assumed that CFL does not hold the CHFS3 contract, either because CFL under the direction of Ministers decides not to bid for the contract or because it is unsuccessful at procurement. CMAL (wholly owned by the Scottish Minister) retains ownership of both vessels and ports and continues to receive funding from Scottish Ministers. The CHFS3 contract is awarded to a private sector operator, who receives subsidy from Scottish Ministers. The private sector operator leases its vessels from CMAL.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares – TS sets fares
  • Procurement of operating contract - TS responsible for procuring contract

Private Operator:

  • Vessel Procurement - CMAL is responsible for vessel procurement, from whom operator leases vessels. Operator could be granted a role in procurement
  • Vessel maintenance - Depending on terms of the vessel leasing contract, operator or CMAL could be assigned responsibility
  • Harbour/ports operations - CMAL remains the owner of the harbours / ports
  • Ferry operations - Successful tenderer assigned responsibility for operations on a fixed term contract

CMAL:

  • Vessel Procurement - CMAL is responsible for vessel procurement, from whom operator leases vessels. Operator could be granted a role in procurement
  • Vessel maintenance - Depending on terms of the vessel leasing contract, operator or CMAL could be assigned responsibility
  • Vessel ownership - CMAL remains the owner of the vessels
  • Harbour/ports ownership - CMAL remains the owner of the harbours / ports
  • Harbour/ports operations - Private sector operator is responsible for harbour / port operations on behalf of CMAL

Transport for New South Wales

The Sydney Ferries Network was previously operated by Sydney Ferries, a statutory authority. Following a review in 2007 that found the operation was inefficient, responsibility for ferry services was passed to the private sector. Operations are currently contracted under a nine year franchising arrangement to Transdev. The operating contract specifies that the operator must lease vessels owned by TfNSW. The operator is responsible for maintenance of the vessels and TfNSW’s berthing facility for the duration of the contract. Transdev is also responsible for procuring a new class of vessels under the latest contract.

Cessation of non-core commercial operations

DML’s commercial ventures not core to the delivery of the CHFS contract are ceased.

DML is 100% owned by the SG and is the parent company of CFL, which is the entity responsible for delivering the CHFS contract. DML has a wider commercial mandate than CFL, something that is reflected in its mission statement “to grow as a recognised leading international transport infrastructure and logistics services group”. This mission has empowered DML to pursue commercial activities beyond delivery of the CHFS contract, including entering a Joint Venture to operate a port at Marchwood in Southampton under a 35 year concession. The port is owned by the Ministry of Defence (MoD) and used for deployments overseas, but also has considerable commercial activity that could be grown further.

If there is no longer a desire on the part of the Scottish Ministers to sponsor DML’s commercial activities that are not core to the delivery of the CHFS contract, DML’s mandate could be narrowed to focus exclusively on delivery of the CHFS contract via CFL.

Corporate Structure

Corporate structure - Cessation of non-core commercial operations - as described in text below

DML (wholly owned by the Scottish Ministers and parent company of CFL) divests its non-core commercial activities and revises its mission statement to focus on delivery of the CHFS contract. CFL continues to receive subsidy from Scottish Ministers for delivery of the CFHS contract. CMAL (wholly owned by the Scottish Ministers) continues to receive vessel loans and harbour grants from TS.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting policy framework
  • Sets fares – TS sets fares
  • Procurement of operating contract - TS responsible for procuring contract

CFL:

  • Vessel maintenance - Operator is responsible for vessel maintenance
  • Harbour/ports operations - Management of ports is unchanged
  • Ferry operations – Operator is responsible for operations

CMAL:

  • Vessel Procurement – CMAL is responsible for procurement.
  • Vessel ownership - CMAL owns vessels
  • Harbour/ports ownership - Ownership of ports is unchanged

Local authorities procure and manage ferry services

Powers are devolved to local authorities who would become responsible for procuring and managing ferry services in their geographies. CMAL retained as vessel owner.

Decentralisation Model

This option would see powers to procure and manage services currently delivered under the CHFS contract passed to local authorities. Routes within the CHFS contract would be ‘unbundled’ and repackaged according to the local authority boundaries. This would give local authorities discretion in procuring ferry services as they see fit for the local area and could lead to more targeted decision-making.  The SG would be responsible for setting the overall strategic direction of the sector.

The local authorities would have the ability to alter the key commercial features of the contract, e.g. the optimal contract term length, procurement method and revenue risk allocation that best meets their needs. The local authorities would be primarily responsible for regulation and contract / performance monitoring, unless additional regulation was also established via an independent body.

CMAL would be retained and would continue to own and procure vessels. The operators would be obliged to lease these vessels and maintain them as per the contract in place with CMAL.

CFL would be maintained in its current form and could bid for the smaller bundles of routes. The smaller bundles (and contract sizes) would reduce barriers to entry and may encourage other participants, e.g. private enterprises or local authorities, to bid for these contracts, increasing competition in the sector.

Corporate Structure

Corporate structure - Local authorities procure and manage ferry services
Corporate structure - Local authorities procure and manage ferry services - as described in text below

Responsibility for preparing and awarding operating contracts is devolved from Scottish Ministers to local authorities. Local authorities are funded to provide subsidy to operators. Scottish Ministers remain responsible for setting the overall strategic direction for the sector although regulation principally takes place at the local level. CFL continues to be wholly owned by Scottish Ministers and is eligible to bid for contracts with local authorities. CMAL (wholly owned by the Scottish Ministers) continues to own the vessels and port infrastructure, which are leased to the operators that are awarded contracts by local authorities.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting overarching policy framework. LAs would interpret / implement this in delivery of services
  • LA:
  • Sets fares – LA sets fares
  • Procurement of contract - LAs are responsible for procurement of contract

CMAL:

  • Vessel Procurement - CMAL is responsible for vessel procurement. Operator leases vessels from CMAL. Private sector operator could be granted a role in procurement
  • Vessel ownership - Operator would negotiate with CMAL regarding responsibility for maintenance, but likely to be responsibility of operator
  • Harbour/ports ownership - CMAL would own harbours

Operator:

  • Vessel maintenance - Operator would negotiate with CMAL regarding responsibility for maintenance, but likely to be responsibility of operator
  • Harbour/ports operations - Contract procured could transfer responsibility for harbour / port maintenance to operator
  • Ferry operations - Operator delivers contract in line with LA specification, which would incorporate TS overarching policy

Scottish Local Authority Ferry Services

Orkney Ferries is owned by Orkney Islands Council (OIC) and runs 13 routes from Orkney’s mainland to smaller islands using nine vessels. OIC runs the service through Orkney Ferries Limited and is the sole shareholder. The company receives funding from OIC under a Service Level Agreement to provide the lifeline ferry services. OIC is the asset owner and is responsible for procurement and upgrades to the vessels. In turn, SG provides funding to OIC, partly through the Local Government settlement and partly an additional Specific Grant, for the sole purpose of operating inter-island ferry services.

Local authorities procure and manage ferry services and assets

Powers are devolved to local authorities who would become responsible for procuring and managing ferry service. Assets currently owned by CMAL are also transferred to local authorities.

Decentralisation Model

This option would see powers devolved to local authorities who would procure and manage ferry services in place of TS. Routes within the CHFS contract would be ‘unbundled’ and repackaged according to each local authority area. Local authorities would procure ferry services as they see fit for the local area, which could lead to more targeted decision-making. The SG would be responsible for setting the overall strategic direction for the sector.

The local authorities would have the ability to alter the key commercial features of the contract, e.g. the optimal contract term length, procurement method and revenue risk allocation that best fits their needs. The local authorities would be primarily responsible for regulation and contract / performance monitoring, unless additional regulation was also established via an independent body.

CFL would be maintained in its current form and could bid for the smaller bundles of routes. The smaller bundles (and contract sizes) would reduce barriers to entry and may encourage other participants to bid for these contracts, increasing competition in the sector.

Ownership of the harbours / ports would pass to the local authority based on geography. CMAL’s vessels would also transfer to the local authorities who would lease these to the operators on their local network. The local authority could include within its contract with the operator a requirement to maintain and operate these assets.

Corporate Structure

Corporate structure - Local authorities procure and manage ferry services and assets
Corporate structure - Local authorities procure and manage ferry services and assets - as described in text below

CMAL is dissolved and its vessels and harbour infrastructure are transferred to local authorities, who also assume responsibility for procuring and managing the delivery of ferry services. Operators lease vessels and harbour infrastructure from local authorities. CFL continues to be wholly owned by Scottish Ministers and is eligible to bid for contracts with local authorities. Scottish Ministers remain responsible for setting the overall strategic direction for the sector. Regulation principally takes place at the local level.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting overarching policy framework. LAs would interpret / implement this in delivery of services

LA:

  • Sets fares – LA sets fares
  • Vessel Procurement - LA would be responsible for future vessel procurement. This would be done in line with overarching policy framework and could include input of operator
  • Vessel ownership - Operators would lease vessels from LA
  • Harbour/ports ownership - LA owns the harbours and ports based on geography
  • Procurement of operating contract – LA is responsible for procurement of contract

Operator:

  • Vessel maintenance - LA would negotiate with vessel owner regarding responsibility for maintenance, but likely to be responsibility of the operator
  • Vessel ownership - Operators would lease vessels from LA
  • Harbour/ports operations - Contract procured could transfer responsibility for harbour / port maintenance to operator
  • Ferry operations - Operator delivers contract in line with LA specification, which would incorporate TS overarching policy

TS manages major routes and smaller routes passed to local authorities

Minor routes are unbundled and responsibility for management is passed to local authorities. TS would continue to procure ferry services for major routes as part of a more limited CHFS network.

Decentralisation Model

Under this option TS could consider unbundling certain ‘minor’ routes and passing responsibility for their management to local authorities. TS would continue to procure ferry services for major routes as part of a reduced CHFS network.

Major routes would be classified as such based on their strategic importance, which could be driven by passenger volumes or other factors, such as the extent of the island’s dependence on lifeline ferry services.

The local authorities would have the ability to alter the key commercial features of their contracts, e.g. the optimal contract term length, procurement method and revenue risk allocation that best meets their needs. They would be responsible for regulation and contract / performance monitoring, unless additional regulation was also introduced that was the responsibility of an independent body.

CMAL would be retained and would continue to own and procure assets, with the operators leasing and maintaining the vessels as per their contracts with CMAL. CFL would be maintained in its current form and could continue to bid for both TS and local authority ferry contracts.

Corporate Structure

Corporate structure - TS manages major routes and smaller routes passed to local authorities
Corporate structure - TS manages major routes and smaller routes passed to local authorities - as described in text below

Responsibility for minor routes is passed to local authorities. Local authorities are funded to provide subsidy to operators. TS continues to procure ferry services for major routes as part of a reduced CHFS network. CFL (wholly owned by Scottish Ministers) is eligible to tender for ferry operator contracts with both local authorities and TS and will receive subsidy for the delivery of these services where it is the contract holder. CMAL (wholly owned by the Scottish Ministers) continues to own the vessels and port infrastructure, which is leased to the various operators under a leasing model.

Responsibilities

Scottish Ministers:

  • Sets policy - TS responsible for setting overarching policy framework. LAs would implement this in delivery of services
  • Sets fares - TS sets fares for those routes it is responsible for and LAs sets fares for theirs
  • Procurement of operating contract - LA / TS responsible for procurement of respective contracts

LA:

  • Sets fares - TS sets fares for those routes it is responsible for and LAs sets fares for theirs
  • Harbour/ports ownership - CMAL / LAs owns harbours and ports as is currently the case
  • Procurement of operating contract - LA / TS responsible for procurement of respective contracts

CMAL:

  • Vessel Procurement - CMAL would be responsible for procuring vessels
  • Vessel ownership – CMAL owns vessels
  • Harbour/ports ownership - CMAL / LAs owns harbours and ports as is currently the case

Operator:

  • Vessel maintenance - Operator would negotiate responsibilities with CMAL, but likely to be operator
  • Harbour/ports operations - Contract could transfer responsibility for harbour / port maintenance to operator
  • Ferry operations - Operations delivered by ferry company successful at procurement

Norwegian Ferry Sector

The Norwegian model is a working example of the hybrid model in practice. Of the country’s 120 ferry services, 16 are currently national routes (procured centrally) and 114 are county routes (procured by individual county municipalities). For contracting, routes are bundled to varying extents (typically two to five routes).

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