CALMAC FERRIES LIMITED
MINUTES of BOARD MEETING HELD ON WEDNESDAY, 17 AUGUST 2016
at the Ferry Terminal, Gourock, PA19 1QP at 10 am
[FOISA Status - Sections of these minutes may be subject to exemptions under Section 30 (Prejudice to effective conduct of public affairs), Section 33 (Commercial interests) and Section 36 (Confidentiality) of this Act and so may not be included in copies of the minutes made available to the public]
Present: D C McGibbon (DM) (Chairman)
S Hagan (SH)
J Stirling (JS)
A Tait (AT)
R L Drummond (RD)
In attendance: P Breslin (PB)
A Collier (DC)
G MacFarlan (GM)
Ms C Roberts (CR)
L de Wolff (LdW)
P Osman (PO) (Interim Company Secretary)
1.1 Safety moment
LdW referred to an MAIB report published recently containing statistics about marine fatalities on UK registered vessels in 2015 which showed that, of the total 32 deaths, the majority were on leisure craft and only 3 on ships subject to the same legislative framework as CalMac vessels. He considered that this showed the value of comprehensive safety training delivered in accordance with regulations and good practice.
1.2 Apologies for absence
These had been received from Martin Dorchester, Brian Fulton and Crawford Paterson.
1.3 Declarations of interest
None were declared, other than those disclosed previously to the Board.
2. Minutes and matters arising
2.1 Minutes from 11.5.16
Subject to certain minor amendments and revised wording requested by JS (which he would agree with PO), these were agreed. JS
2.2 Action points from 11.5.16
These had all been completed, save for 3.16 which PO would now action. PO
2.3 Matters arising
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
3. Chairman's remarks
3.1 CHFS2 signing
DM asked if this was still scheduled for 22.8.16 and RD confirmed that it was and that he would be attending, having been authorised by the Board to sign any necessary documentation on behalf of the Company.
He outlined the communications and PR programme that had been prepared, especially for staff and stakeholders. He would be discussing the detailed contents of this with CR later in the day.
CR pointed out that a meeting with the unions was planned for next week and some of the messages in the communications programme would be used to introduce some of the issues consequent on the CHFS2 award.
SH asked for a copy of this programme since he considered it to be one of the most important tasks to be carried out in the near future. GM undertook to send this to the Board.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)] GM
3.2 [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)] DM
4. Operational Performance Review
4.1 Managing Director's Report dated 10.8.16
RD referred to this Report and mentioned particularly:
4.1.1 [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
DC noted that the Minister had now started to visit the islands and meet with the communities and emphasised how important it was that CFL should try to ensure that consistent messages are given to the communities when answering their questions.
4.1.2 Vessel breakdowns - whilst the Heb. Isles was now back in service, PB stated that it was now planned to install software already used elsewhere on the fleet in MV Finlaggan and to carry out work to solve the mezzanine deck problems;
4.1.3 New vessels - PB confirmed that MV Catriona should be delivered to CFL by the end of August this year. As to the 2 new vessels under construction, workmanship was good [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
AT asked if there were any plans for further new vessels and RD responded that the plan was for those already ordered to provide a breathing space for shortfalls in current services to be remedied and for CFL to estimate future requirements. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
4.1.4 CHFS2 mobilisation and transformation - RD confirmed that plans were in place for steering groups to meet soon after contracts had been signed in order to start deploying mobilisation and transformation initiatives throughout the group. The delays in signing had held up the recruitment of project managers and permanent staff required for the new contract.
AT enquired whether any decisions had been taken on the volume of information TS required as part of the CHFS2 contract provisions. RD replied that Janine Beckett had been working with her team to prepare proposals, yet to be shared with TS, as to what detail was needed and what would be practical to provide.
4.1.5 Valiant - the provider, Horsebridge, was changing a primary supplier which they were confident would bring improved performance and assist project completion. It was likely that a satellite solution would be required to achieve connectivity on some vessels
4.1.6 Compass - upgrades were being introduced to allow home printing of tickets, though challenges remained with the supplier, PDMS;
4.1.7 [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
4.1.8 Pay talks - these would start with the unions at the meeting planned for 25.8.16 (see item 3.1 above); and
4.1.9 New directors - RD welcomed GM and LdW to their first CFL Board meeting following their appointment as Interim Director of Customer, Sales and Marketing and Director of Health, Safety, Quality and Environment respectively.
4.2 Safety Report dated 4.8.16
LdW outlined the major elements in his Report as follows:-
4.2.1 Accidents - year-to-year accident rates showed a downward trend, although MAIB reportable incidents had risen over the May-July quarter, none of which were serious. This was due to increased accident reporting by CalMac following the MCA's perception that there was a lack of accident reporting;
4.2.2 Heb Isles - this incident had now been investigated and a report drafted for internal consideration;
4.2.3 Ullapool - 2 residents had requested more remedial work to their properties than had so far been offered. DC (and Ullapool Harbour Authority) believed the current offer was adequate and the position remained under discussion with CMAL. Thus, there remained a risk that a noise abatement notice might still be issued;
4.2.4 Finlaggan mezzanine deck - a report on the corrective action taken had been sent to the MCA and closure of the non-conformance against the ISM Code was awaited; and
4.2.5 Silver Team - following Exercise Dunollie, enhancements would be introduced to the way in which the Team operates in a disaster situation.
4.3 Group Finance Director's Report - August 2016
RD referred to his Report and highlighted:
4.3.1 CHFS1 Year 9 - 9 months results to 30.6.16 - revenue levels overall continued at a higher figure than Plan resulting in a 9 month estimated clawback of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. GM explained that income from commercial vehicles was lower than expected due to the re-classification of 'small ' vehicles and to the lack of Island infrastructure improvements, although coach traffic was holding up this year;
4.3.2 CFL Q1 2016-17 - a net profit of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] had been achieved in the first three months of the current financial year compared with a Plan loss of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. RD explained how this had been achieved; and
4.3.3 CFL balance sheet as at 31.3.16 - AT enquired as to whether there was a plan for the use of the cash held by CFL at the previous year end. RD replied that, although a paper on dividend policy had been produced a year ago, the current intention was to hold cash until CHFS2 transformation was complete, probably in year 3 or 4 of the new contract.
5. Argyll & Bute Economic Forum - February 2016
GM explained that he had been asked to give a presentation to the Board on the report that had been produced following this Forum, held earlier in the year. CFL had attended the event and was involved on an on-going basis, so he would continue to update the Board on any relevant developments in this connection.
The report identified the region's major threat to be demographics, so it called for a big drive to be undertaken to encourage younger people to live and work in the area. Tourism, food and drink production and fisheries and forestry should be encouraged. Schools should be asked to emphasise the importance of young people remaining in the region and consideration should be given to establishing a university in Oban. Construction was the second largest industry sector in the area, though this usually involved smaller, local, contracting businesses.
Barriers to economic and population expansion included poor connectivity, the lack of affordable housing, poor transport links and no air service between the West Coast and Edinburgh.
GM listed the economic initiatives taken by CalMac including the continuing provision of reliable and low cost ferry services, Compass booking improvements, increased consultation with communities and other users and further contacts with schools and colleges to make more maritime and CalMac-related training available locally.
Current priorities covered connectivity, local food sourcing, helping to develop Argyll as a cultural centre and consulting and agreeing winter 2016 and summer 2017 timetables.
The meeting agreed the Forum was a positive step in bringing interested parties together, but the acid test would be whether the local authorities and service providers would take actual action. CR cited further education training as an example - despite many efforts by CalMac, this was just not available from colleges in the region.
GM undertook to circulate a copy of the report to those present. GM
6. Other operating reports
The Board noted the Technical, Commercial, HR, Operations and Finance Director's Highlights reports. Issues in these which their authors wished to draw to the Board's attention had already been considered.
7. Any other business
7.1 Key events calendar
GM would circulate a copy of this to the Board and add Board members to future distribution lists. GM
AT asked if difficulties were still being experienced in recruiting staff, particularly for IS, as had been the case earlier in the year. CR replied that the position was becoming easier following the CHFS2 contract award as there was now certainty as to CalMac's future.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
She explained that CFL was undertaking a tender process to identify preferred recruitment suppliers, the closing date for which was 19.8.16. Responses would then be evaluated.
7.3 Mobile Enterprise Engagement Team (MEET)
RD explained that this new IS initiative was manned by two graduate trainees who were available on a peripatetic basis to visit parts of the organisation with IS problems and help to solve them. MEET would enable IS to become more visible across the group and to act as a conduit for CalMac's Good Ideas Community.
7.4 [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
7.5 Meetings calendar for 2017
Crawford Paterson had undertaken to circulate a draft schedule of board and committee meeting dates for 2017 over the next two weeks. CP
There being no further business, the meeting was declared closed at 12.10 pm.
Signed: Date: 2016
D C McGibbon