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CFL Board Meeting Minutes | November 2015 | CalMac Ferries

CALMAC FERRIES LIMITED

 

MINUTES OF BOARD MEETING HELD IN THE MACDONALD HOLYROOD HOTEL,

EDINBURGH, AT 11.30AM ON WEDNESDAY 11NOVEMBER 2015

___________________________________________________________________________

 

Present                          Mr D C McGibbon, Chairman

                                      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 R Hadfield, Scottish Government (Assessor)

                                      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

____________________________________________________________________________________

 

1. PRELIMINARIES

 

1.1   Safety Moment

 

Mr McGibbon noted the importance of warning signs being placed in buildings where doors could be opened unexpectedly outwards.

Mr Tait noted the importance of not wedging upper floor windows open with objects, where the objects used could fall to the ground.

 

Welcome

 

Mr McGibbon welcomed Mr Hadfield, Mr Collier, Ms Roberts, Mr Breslin, Ms McConnachie and Mr Fulton to the meeting.

           

1.2   Apologies for absence

 

Apologies were offered from Mr Easton.

 

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 19 August 2015

4.2 Finance Report

3. CHFS Contract year 8 update

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

 

Subject to the foregoing amendments, the Minutes of the Board Meeting held on 19 August 2015 were approved.

 

Action Points

Action point 1 was noted to be closed out, point 2 was in progress and point 3 was noted as being closed out.

 

2.2       Matters arising

 

There were no matters to record.

 

3. CHAIRMAN'S REMARKS

Mr McGibbon noted that Board had just completed a successful and beneficial meeting with the Minister for Transport and Islands, Derek Mackay, MSP.

The Board discussed various aspects of the meeting with the Minister, noting the value of being able to convey key messages and initiatives as well as advising him of current operational challenges.

Mr McGibbon noted that the Safety Strategy Day of 30 October, with presentations by external companies, had been particularly useful to the Board for helping to bring a different focus on safety matters. The Board noted that the Wood Group presentation had been very effective, with some approaches to safety having particular resonance for the Company.  

Mr McGibbon noted that the Pension Trustees had met on 27 October and had reviewed the Fund's Actuary's Report in regards to the triennial valuation.

Mr Hadfield noted that a working group had been re-convened consisting of Transport Scotland, CMAL and the Company, in order to consider pension fund strategy options. It was noted that CMAL had commissioned a review of the Fund's Actuary's Report by Barnett Waddingham, LLP, and a copy had been distributed to the Trustees.  The Board discussed the matter, noting that the Transport Scotland covenant provided strong support to the Fund, the strong interest in the current position of the Fund demonstrated by the RMT's communications with the First Minister and the value of Grant Thornton LLP's report on the Fund, which would be submitted to the Pensions Regulator in due course as supporting documentation to the Deficit Recovery Plan.

 

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

 

Mr McGibbon congratulated Mr Dorchester on the award of the Marchwood Concessionary Agreement by the Ministry of Defence to Solent Gateway Ltd. It was noted that the Agreement had been bid for by a joint business venture between David MacBrayne Ltd and GBA.

Mr McGibbon noted that congratulations should be given to all those who worked towards the production of the 2016 Summer Timetable.

 

4. OPERATIONAL PERFORMANCE REVIEW

 

4.1 SAFETY AND MANAGING DIRECTOR'S REPORT

 

1. KEY BUSINESS ISSUES

1.1  Safety Report

 

Mr Dorchester noted that he would address the highlights of his report.

Mr Dorchester noted that there had been a lot of good progress in safety-related initiatives, such as the Company Safety Induction, with the effort also being put towards future developments. He noted that the Operations Team was focused on driving home the safety message by looking for continuous improvement and momentum in staff's approach to safety in their daily workload.

The Board discussed safety, noting that continued communications and initiatives were important, as well as the reinforcement of the importance of a good safety culture.

Mr Drummond and Mr Fulton left the meeting.

 

            1.3 & 1.4  CHFS

The Data Room operation was discussed by the Board, including the submission of documentation and the current scrutiny of the data quantity uploaded. Dialogue was currently ongoing with Transport Scotland and the Company would respond to queries raised.

Mr Drummond and Mr Fulton returned to the meeting.

 

1.5 New vessels

Mr Dorchester noted that no formal announcement had yet been made regarding the placing of an order for new tonnage, namely two 100M vessels.

 

1.6 Wemyss Bay

Mr Dorchester note that the completion date of works at Wemyss Bay had been put back.

 

2. PR UPDATE

 

2.1 Royal National Mòd

Mr Dorchester noted that there had been strong media coverage of the event at Oban and some notable engagement with stakeholders, such as CnES, Highland Council and Argyll & Bute Council. Mr Tait and Mr Hagan had also attended.

 

2.2 Travel and Tourism Conference

Mr Dorchester noted that the Company had obtained the services of Mr Simon Calder, Senior Travel Editor for The Independent newspaper, as guest speaker. Mr Calder also presented the Company with the Best Ferry Company award in the newspaper's Independent Travel Awards 2015, won against strong international competition.

 

3. Outlook

 

Mr Dorchester summarised a number of Outlook topics and noted that the long-range weather forecast suggested conditions over the winter period would be very testing.

It was also noted that the introduction of RET on more routes would provide increased capacity challenge.

 

4.2 FINANCE REPORT

 

Mr Drummond presented his paper.

 

2.  Key Financial Numbers 2015/16 - 6 months 

 

Mr Drummond noted that the Company was making a small net operating profit as at 6 months. The variance from budget resulted from fuel variances, slower or delayed roll-out of training or project expenditure. 

He summarised the current position, noting the impact of the industrial action and loss of revenue. Project expenditure showed positives due to a re-assessment of the Transformation Programme. Mr Drummond also explained Project Valiant milestone payment timings.

 

3. CHFS Contract year 8 update

 

Mr Drummond noted that the completion of the CY8 Actual Outcome paper was imminent, following which it would be submitted to Transport Scotland.

 

4. CHFS Contract year 9 update

 

Mr Drummond indicated that the Provisional Base Case had been submitted to Transport Scotland for approval, noting that it was not based on the final Contract Year 8 figures.

The Board noted Mr Drummond's Finance Report and discussed the potential effects on revenues by the phased introduction of RET across the network.

 

4.3 PORTFOLIO REPORT

 

Mr Drummond presented his paper.

 

Project Titan

Mr Collier noted that there was a Titan Project meeting on the following day. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

 

The current reservations platform, Compass, was being reviewed in relation to what functional improvements could be written into the programme, such as print-at-home ticketing.

 

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

 

Mr Drummond noted that the IS Initiatives were on-track for completion. Project Argonaut connection delays were as a result of the current position in developing a communications network. A staged approach and a longer completion timescale was expected to help achieve the desired result.

 

Project Valiant

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

 

The Board discussed potential communications options and costs associated with the Contract, as well as the complexity of dealing with numerous property owners. The Board requested a summary report of the history, rationale and options for the project. Mr Collier agreed to circulate a report to the Board.

    Action1: Mr Collier

 

The Board also requested to be updated with the following week's formal Change Request submission to the PMB in respect of Satellite Communications technology installation. Mr Collier agreed to include this in his summary report to the Board.

Action2: Mr Collier

 

5. PROGRESS FOCUS

 

5.1 CHFS BID UPDATE

 

The Board agreed that discussion elsewhere had addressed the matter and had carefully reviewed the paper provided.

 

5.2 SUMMER 2016 TIMETABLE

 

The Board noted that the Summer 2016 Timetable had been issued and congratulated all who had been involved in its timeous production.

 

5.3 MARCHWOOD UPDATE

 

Mr McGibbon noted that he, Mr Dorchester, Ms Roberts and Ms Irving would be meeting to discuss the Transformation Team project plan and objectives.

Mr McGibbon also noted that the Group Audit & Risk Committee would be seeking to ensure that governance was appropriately reviewed. 

The Board discussed the progress of the Transformation Team formed to deliver systems which would accord with the terms of the Concessionary Agreement.

 

6. ANY OTHER BUSINESS

 

There was no business to discuss.

 

7. APPENDICES 

 

Mr Breslin noted that Cammell Laird had responded positively to the alternator damage caused by a sub-contractor during the annual overhaul of MV Loch Seaforth and repairs were being rapidly addressed. He noted that, as a result of a review of the incident, all future work activities at annual overhauls would need to be managed more carefully by shipyards.

Mr Breslin noted that, as a consequence of focus on the outstanding MV Loch Seaforth warranty claims, CMAL and FSG had managed a reduction to 30 items.

The Board noted the appendices to the Managing Director's summary.

 

8. NEXT MEETING

 

To be held at 1 p.m. in the Boardroom, Gourock, on 22 March 2016.

 

.........................................

Chairman

 

CALMAC FERRIES LTD

BOARD MEETING ACTION POINTS

 

Meeting

Action No.

Responsibility

Topic

Action

11/11/15

1

AC

4.3 PORTFOLIO REPORT

 

To provide a summary of the history, rationale and options for Project Valiant.

11/11/15

2

AC

4.3 PORTFOLIO REPORT

 

To circulate a note on the outcome of the PMB submission of the Project Valiant Change Request.

 

 

 

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