CALMAC FERRIES LIMITED
MINUTES OF BOARD MEETING HELD IN THE BOARDROOM,
OBAN, AT 10AM ON WEDNESDAY 19AUGUST 2015
___________________________________________________________________________
Present Mr D C McGibbon, Chairman
Mr Easton
Mr S Hagan
Ms P J D Stark
Mr J Stirling
Mr A V Tait
Mr M Dorchester
Mr R L Drummond
In attendance: Mr A Collier, Operations Director
Ms C Roberts, HR Director, David MacBrayne HR (UK) Ltd
Mr P Breslin, Technical Director (Interim), CalMac Ferries Ltd
Ms J McConnachie, Commercial Director (Interim)
Mr B Fulton, Bid Team Service Delivery Lead
Mr C Paterson, Board Administrator
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1. PRELIMINARIES
Safety Moment
Ms McConnachie commented that standing on a swivel chair to reach for something was to be discouraged as she had noted it occurring in the office.
Mr Tait had been on a Company vessel recently and commended crew for standing at the foot of the stairway to the passenger deck in order to accompany elderly and less able passengers up to the passenger space.
Mr Stirling highlighted the importance of safety training as demonstrated by the Parachute Regiment Freefall Team 'The Red Devils' when one canopy had failed to deploy and another member came to the falling parachutist's recue. He also highlighted the importance of positive commands as instructions.
Welcome
Mr McGibbon welcomed Mr Collier, Ms Roberts, Mr Breslin, Ms McConnachie and Mr Fulton to the meeting.
1.3 Declarations of interest
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 12 May 2015 were approved.
Action point 1 was noted to be outstanding, point 2 was closed out and point 3 was noted as being discussed elsewhere in this meeting's papers.
2.2 Matters arising
There were no matters to record.
3. CHAIRMAN'S REMARKS
Mr McGibbon noted that the Minister for Transport and Islands, Derek Mackay, MSP, had formally re-appointed him as Non-Executive Chairman, and Mr Easton as Non-executive Director, until the end of 2018. Ms Stark had also had her tenure extended as a Non-executive Director, until the end of 2017.
Mr McGibbon noted that the recent industrial action had caused a great deal of extra work within the Company and commended Mr Dorchester and Ms Roberts for holding the consultations process with the Unions.
Mr McGibbon noted that the Pension Fund Actuary was not due to give the formal position on the triennial valuation until later in the year including the deficit, but due to the current Union consultations, which had a focus on Pensions matters, had been asked to bring forward the results.
The possibility arose of looking at the assumptions around the deficit recovery plan and the level of prudence applied.
Mr McGibbon noted that this meeting was the first since the Draft ITT for the CHFS Bid competition had been issued. He congratulated Mr Drummond and the Bid team for assessing the Draft ITT in the short timescale provided.
Mr McGibbon noted that Mr Ure and Mrs Craig had tendered their resignations and wished them in their future endeavours.
Mr McGibbon noted that the Cabinet Secretary for Infrastructure, Investment and Cities, Keith Brown MSP, and the Minister for Transport and Islands, Derek Mackay, MSP, had visited the MV Loch Seaforth and had been hosted by Mr McGibbon and Mr Hagan. He noted that Captain Griffiths and the crew had been very efficient and hospitable.
Mr Hagan noted that traffic crossing from the marshalling area to the linkspan over the trunk road was a potential safety issue. Mr Collier noted that a Risk Assessment had been carried out but the level of control sits with Highland Council. The Council had been approached on many occasions about the matter.
4. OPERATIONAL PERFORMANCE REVIEW
4.1 SAFETY AND MANAGING DIRECTOR'S REPORT
1. OPERATIONAL PERFORMANCE UPDATE
Safety Report
Mr Collier indicated that he would address the highlights of his report.
Mr Collier noted that the trend was down over the period for the number of incidents reported. He also noted that the Near Miss reporting was beginning to suggest trends
Industrial relations
Mr Collier noted that the Industrial Action had had a significant disruptive effect on customers and island businesses and had also created a major increase in staff workload.
The Board discussed Transport Scotland's proposal to claim service reduction penalties.
Mr Dorchester noted that, from an operational perspective, planning for a strike which was then cancelled at a late stage created additional difficulties for staff to deal with. Mr Collier noted that most passengers appeared not to have reverted their travel plans if the Company was subsequently able to provide a service on a route. Ms McConnachie noted that the Company had received positive comments from staff and passengers about communications and disruption handling arrangements.
Contract management
Mr Collier noted that a meeting was scheduled tomorrow with Transport Scotland on the vessel replacement strategy, with attendees from the Company, CMAL and Transport Scotland. He noted that a significant amount of effort had been put into an innovations paper containing proposals for the summer 2016 timetable.
Mr Collier agreed to circulate the note regarding the outcome of berthing trials of MV Isle of Lewis at various Ports.
Action1: Mr Collier
The Board discussed the operation of the MV Loch Seaforth and the stand-by vessel, MV Isle of Lewis. They also considered accommodation capacity issues reported in the Outer Hebrides.
Mr Collier noted that the closure of Wemyss Bay Pier for upgrade works was scheduled for 1 October 2015. He also noted that CMAL would attend the next Project Anchor meeting to explain the works programme.
The Board discussed the management of the upgrade works at Wemyss Bay as well as future port upgrades at locations such as Brodick.
Commercial
Mr Collier noted that arrangements for the 2nd Annual Travel and Tourism Conference planned for October were progressing well. It was arranged to occur during the Royal National Mòd in Oban and was very beneficial to the Company's profile.
Mr Collier noted a number of further awards and commendations that the Company had received; the Marketing Society Star Award: Silver Tourism and Leisure and Bronze 2014 Digital Campaign; The Transport Times' Scottish Transport Awards: Highly Commended, Crew of MV Finlaggan; and a TripAdvisor Certificate of Excellence for the Days Out programme.
Operations
Mr Collier noted that unseasonable weather had been causing increased service disruption and amber alerts. Weather reporting from various sources was being progressed.
The Board discussed the increased weather patterns and Mr Collier agreed to circulate a note on meteorological reporting at the destination port as well as en route.
Action2: Mr Collier
Mr Dorchester noted that Mr de Wolff was creating a report on recent weather patterns across Europe in general, which could assist the Company respond to queries on operational decisions.
Technical
Mr Collier noted that the outstanding warranty items on MV Loch Seaforth had been reduced to 102 in number and that both he and Mr Breslin were working with CMAL to address the remaining items.
Mr Collier noted that build programme for the 3rd Hybrid Vessel, MV Catriona, appeared to be progressing satisfactorily. The Board discussed the deployment and delivery date of the vessel.
Mr Breslin outlined a new Annual Overhaul Process being introduced by the Technical Dept which sets out how shipyards can improve service levels and accuracy of their repair worklists.
People
Mr Collier noted that fleet staff levels were being increased to meet requirements, improve resiliency and reduce the engagement of agency staff.
Mr Collier noted that the training is underway to ensure that crew are complying with the requirements of the 2010 STCW Manila amendments to the International Convention on Standards of Training, Certification and Watch Keeping for Seafarers. 5 days of refresher training are required every 3 years, commencing in 2017.
4.2 FINANCE REPORT
Mr Drummond presented his paper.
He summarised the current position, noting the impact of the industrial action and loss of revenue. Project expenditure all showed positives because some aspects did not yet require spend.
2. Key Financial Numbers 2015/16 - first 3 months
Mr Drummond noted that the significant positive fuel price variance will form part of the Transport Scotland clawback.
3. CHFS Contract year 8 update
Mr Drummond noted that Transport Scotland clawback was due to variations and changes in the revised base case.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
Action3: Mr Drummond
5. PROGRESS FOCUS
5.1 PORTFOLIO REPORT
Mr Collier tabled an update on Project Titan and highlighted the material points.
The Board discussed project Titan and its current status.
Mr Collier tabled an update on Project Valiant and highlighted the material points.
The Board discussed project Valiant and its current status.
The Board thanked Mr Collier for the papers. The Board discussed the Transformation Programme and Mr Drummond noted the interdependencies of some Projects, particularly where a delay in one project would directly affect others. Mr Dorchester noted that Mr Drummond had appointed Mr Scorthorne as Head of PMO, with a focus on Project outcome and delivery.
The Board noted the complexity of operating a large number of IT-related Projects.
5.2 CHFS BID UPDATE
The Board noted the importance of continued engagement with key stakeholders during the bid process.
Mr Drummond took the Board through the Bid creation process and noted the external resource and expertise that was assisting.
The Board discussed the associated costs of the Bid and the input from KPMG.
5.3 INDUSTRIAL ACTION/PENSION DISCUSSION
Industrial Action
Mr Collier noted that some savings had been made during the periods of industrial action due to vessels not sailing.
Mr Collier also noted that there had been an increased call level in the Contact Centre. In relation to reservations, 92 bookings had been cancelled outright but well over 1,000 had been amended.
The Board indicated its appreciation of the Contact Centre effort in handling the increased workload, as well as that of Operations dept staff.
[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]
6. ANY OTHER BUSINESS
Mr Stirling noted that there were a number of acronyms which required clarification and requested that the use of acronyms be minimal.
Mr Easton noted the near miss incident involving MV Bute on 27 July and commented that the Board should be informed of this type of incident if a potential outcome was considered to be a serious risk to the Company.
7. APPENDICES
The Board noted the appendices to the Managing Director's summary.
8. NEXT MEETING
To be held at Holyrood Suite 3, Macdonald Holyrood Hotel, 81 Holyrood Road, Edinburgh, EH8 8AU on 10 November 2015.
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Chairman
CalMac Ferries LTD
Board Meeting Action Points
Meeting | Action No. | Responsibility | Topic | Action |
19/08/15 | 1 | AC | 1. OPERATIONAL PERFORMANCE UPDATE | To circulate the note regarding the outcome of berthing trials of MV Isle of Lewis at various Ports |
19/08/15 | 2 | AC | Operations | To circulate a note on meteorological reporting at the destination port as well as en route. |
19/08/15 | 3 | RLD | 4.2 FINANCE REPORT | To circulate a note of the Revised Contract year 9 update submission to TS. |