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Board Meeting Minutes August 2014

CALMAC FERRIES LIMITED

MINUTES OF BOARD MEETING HELD IN THE BOARDROOM,

GOUROCK, AT 10AM ON WEDNESDAY 20 AUGUST 2014


Present:                         Mr D C McGibbon, Chairman

                                      Mr M Easton

                                      Mr S Hagan    

                                      Mr J Stirling

                                      Mr A V Tait

                                      Mr M Dorchester

                                      Mr R L Drummond

                                      Mr S A Ure                                         

In attendance:               Mr B Fulton, Operations Director       

                                      Mr A Collier, Chief Risk Officer

                                      Ms C Roberts, HR Director, David MacBrayne HR (UK) Ltd

                                      Mr C Paterson, Board Administrator


1.         PRELIMINARIES

Mr McGibbon noted apologies for absence from Ms Stark. He welcomed Mr Fulton, Mr Collier and Ms Roberts to the meeting.           

1.1       Declarations of interest

Ms Roberts noted that, in respect of the current attention generated by the trading position of Ferguson Shipbuilders Ltd, her husband was connected with a thirty party who had expressed interest in the business.

There were no further declarations of interest, other than those previously made and known to all Directors.

2.         MINUTES/MATTERS ARISING

2.1       Minutes of previous meeting

The Minutes of the Board Meeting held on 14 May 2014 were approved.

2.2       Matters arising

There were no matters to record.

Mr Dorchester joined the meeting.

Mr Fulton, Mr A Collier, Ms Roberts and Mr Ure left the meeting.
 

3.         CHAIRMAN'S REMARKS

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

Mr Fulton, Mr A Collier, Ms Roberts and Mr Ure returned to the meeting.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

Mr McGibbon noted that Non-Executive Directors had met with the CMAL Board and Mr Ƙstergaard as the new Chairman.

Mr McGibbon noted developments in the organisation of the CHFS Tender.  Mr Hadfield had indicated that recruitment for the replacement of Ms Ainsley, Head of Ferries Policy and Procurement was progressing and that Mr Nicholls, Director of Aviation, Maritime, Freight and Canals would be involved in the process.

Mr McGibbon noted that the Framework Agreement had been finalised and thanked Ms Stark and Mr Drummond for their efforts.

4.         OPERATIONAL PERFORMANCE REVIEW

MANAGING DIRECTOR'S SUMMARY

1. OPERATIONAL PERFORMANCE UPDATE

1. Safety and Risk

Mr Collier noted that there had been no RIDDOR and nine MAIB reports submitted in the last period.

1.1.4   Mr Collier noted that a Port Marine Code Audit was being carried out and noise complaints at Ullapool were being managed.

1.1.12   Mr Collier noted that a meeting had been held with Clydeport regarding its support for development at Ardrossan. Mr Dorchester and Mr Easton will consider what further approach to adopt to the topic. Mr Stirling is currently compiling a paper which includes weather disruption port options.

2. Operations

2.4 Lismore service

Mr Collier noted that the Lismore community had been communicating with the Company about the permanent provision of a Loch Class vessel. Mr Dorchester noted that this level of service was at present outwith the Ferries Plan.  

2.6 Brodick

Mr Collier noted that the forthcoming works at Wemyss Bay would provide a challenge and that there were complex Harbours, Technical and Operations workstreams to develop.

2.10 Ullapool

Mr Collier noted that the Company was keen for the linkspan upgrade works to be commenced as early as possible. Mr Hagan noted that due to some safety concerns raised about ferry traffic crossing the main street from the marshalling area the provision of a traffic light system should be considered.

3. HR and People

3.1 Leadership Conference

Ms Roberts noted that the Conference had been successful, with positive feedback.

3.2 Trades Unions briefing

Ms Roberts noted that the Unions had expressed interest in being involved in contributing to the strategic direction of the Company. Unions recognised that they had a role to play in CHFS and furthering industrial relations.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

3.6 Absence rate

The Board discussed the absence percentage rate and what strategies are being adopted to further reduce it.

3.9 Head of Safety Management

Ms Roberts noted that Mr De Wolff had agreed to continue employment with the Company.

4. Technical

4.7 EU Sulphur Conference

Mr Ure had given a key presentation at the Transport Scotland sponsored Conference and indicated that he would circulate a copy of his presentation to the Non-Executive Directors. Other attendees at the Conference had included representatives from Serco, StenaLine, DFDS Seaways, Western Ferries, Professor Alf Baird and Transport Scotland staff. It was noted that the Minister for Transport and Veterans, Keith Brown, MSP, had spoken for 30 minutes on the subject.

 

5. Commercial/PR/Customer

5.1 Project Titan

Mr Collier noted that Project Titan was now public knowledge. Mr Dorchester noted that Project Valiant was yet to be publicised.

FINANCE REPORT

Mr Drummond presented his paper.

Key financial highlights for FY 14/15 4 months.

Mr Drummond presented his report.

Mr Drummond noted that the report presented the financial performance of the Company for 4 months to date. The performance showed a positive variance ahead of plan of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. He indicated that the Company had been operating more efficiently and that farebox revenues continued to be ahead of budget by [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. He noted that performance was much better than expected and that the marketing programme was contributing to this.

Other noted expenditure was staff costs which were positive, disruptions and repositioning. Contract variations of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]in respect of fuel would be submitted in a Revised Base Case. 

CHFS Contract year 7 update

Mr Drummond noted that the budget was slightly behind forecast due to slightly adverse Annual Overhaul costs. One important factor was identifying when an item was maintenance or life extension. This aspect is not well defined in the Contract.

The Board discussed Transport Scotland and CMAL in relation to the CY8 bid which is to be submitted at the end of August.

5.  PROGRESS FOCUS

HR

People Strategy & Plans

Ms Roberts tabled a People Strategy & Plans paper.

Before Ms Roberts took the Board through the paper the absence percentage figure was discussed. Ms Roberts noted that work continued towards reducing the figure and that it had been reduced from a peak of 6%. Ships Officers were being trained to be able to conduct return to Work interviews. Other contributory factors included some level of aging in the workforce and a spike last year during a low morale period in Ports.

The Board asked what effect long term sickness had on the percentage figure. Ms Roberts indicated that she would provide a more detailed analysis of the figure for the next Board Meeting.

Action 1: Ms Roberts

Ms Roberts presented the tabled paper.

Ms Roberts noted that HR had a close focus on People Strategy. Taking the ratings training programme as an example, she noted that 62 candidates had applied for development.

The Board noted the progress training and recruitment and considered the possibility of more local press involvement allied to the employment of local people. The Board also noted the extent of work required and the challenge for the management team in delivering the People Strategy.

Pay negotiations 2014

Ms Roberts tabled a Pay Negotiations 2014 paper.

Ms Roberts noted that the existing 3-year Pay deal expires in September 2014. Highlighting the key proposals, she noted that review had determined a further 3 year deal as providing the preferred parameters. Other advantages include the benefit of management being able to concentrate on core CHFS matters over the period, the reduction of strike risk and staff having some certainty about pay rates for the period into the new CHFS contract.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

The Board discussed benchmarking with other organisations and the negotiation's contribution towards the CHFS bid structure.

Ms Roberts also noted the Management Pay Grade review.

The Board debated the delivery of the proposed pay rate, the involvement of management grades in the process and how management grades would collectively be communicated with.

Ms Roberts noted the arrangement of the HR Negotiating Team, including the Core Negotiating team led by Ms Roberts, the support structure and the communications resource.

The Board supported the overall strategy.

6.         UPDATES

Projects

Mr Drummond presented the update paper and, due to time pressure, asked the Board to take the update as read.

Loch Seaforth and Loch Seaforth Lease

Loch Seaforth update

Mr Ure gave the Board a summarised position of the current build condition of the vessel. He noted that the vessel had been returned to drydock for a week to have works carried out on the propeller hubs. He explained the background to vibration issues which had necessitated further works. He also noted that a Project Plan had been created to efficiently bring the vessel to operating condition after delivery.

The Board discussed the vessel acceptance criteria and the current condition of the vessel.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
Loch Seaforth lease

Mr Drummond noted the complex contractual negotiations involving five parties; the Company, Lloyds Bank, Transport Scotland, the Leasing Party and CMAL. This had arisen out of the restrictive document signed between the Bank and CMAL. Other issues included State Aid and Warranty which had been dealt with and a Noise Issue which was still being resolved. It was expected that there would be evidence of mitigated noise levels on the new vessel.

Mr Hagan left the meeting.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

Mr Drummond left the meeting.

7.         SUBSIDIARY

Caledonian MacBrayne Crewing (Guernsey) Ltd

The Board  noted the  Minutes of the  Subsidiary  Board  Meetings  held  on  13 January 2014 and

11 August 2014.

 

8.         ANY OTHER BUSINESS

Mr Dorchester noted that at the Lloyds List Awards Global 2014, the Company had achieved a 'Highly Commended' designation in the Ship Operator Award category.

9.         NEXT MEETING

To be held at Gourock on 10 November 2014.

CALMAC FERRIES LTD

BOARD MEETING ACTION POINTS

Actions pointsfrom Board Meeting

Meeting

Action No.

Responsibility

Topic

Action

20/08/14

1

CR

People Strategy & Plans

To provide a more detailed analysis of the absence percentage figure.

 

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