Passenger

1. Stornoway – Ullapool Service Designing the Future – Vessel and Harbour Considerations

2. Scottish Government Ferry Policy

4. Background and Key Issues • Route currently served by 2 vessels. ISLE OF LEWIS (Freight and Passenger but not capable of 24 hour operation) and MUIRNEAG (Overnight freight only service). • MUIRNEAG will no longer be able to operate after October 2013. • Significant increase in traffic since introduction of RET. • Importance of identifying optimum solution to ensure continuation of service that meets current and future likely demand. • Extremely challenging financial climate for public services.

5. Passenger, Car and Commercial Vehicle traffic 2009 – route comparison

7. Timeline • 2009 MVA commissioned by CMAL to undertake STAG • 2010 Additional analysis undertaken by BM Consulting on emerging options in light of RET experience. Commissioned by DML • 2010 – 2011 In depth technical analysis on vessel options including specification, model testing and reliability • 2011 – More in depth analysis for shore infrastructure Ullapool and Stornoway • 2010 – 2011 Investigation and identification of funding options • 2011 – Consultation with stakeholders on preferred option. Subject to approval tender preferred option. • 2012 – Commence shipbuilding and shore infrastructure requirements • October 2013 – Replacement shipping in service.

9. Objectives Agreed objectives at pre appraisal stage:- • To provide transport links that offer more reliable opportunities for travelling between Lewis/Harris and Scottish mainland; • To deliver transport links that allow businesses and residents to travel close to the time they need to travel; • To provide sufficient long-term capacity to meet the demand for current and future travel; and • To ensure value for money solution for delivering future transport links between Lewis/Harris and Scottish mainland.

10. Reliability – 1 Jan 2007 to 31 Dec 2010

12. Initial Options • Do Nothing – MUIRNEAG not replaced - REJECT • Do Minimum – Continue to run MUIRNEAG after 2013 REJECT • Option 1 – Replace MUIRNEAG with a like for like freight vessel • Option 2 – Operate ISLE OF LEWIS with enhanced timetable REJECT • Option 3 – Additional ROPAX to supplement ISLE OF LEWIS • Option 4 – Acquire larger ROPAX configured for 24 hour operation on route • Option 5 – Acquire two ROPAX vessels (smaller than IoL) • Option 6 –Supplement IoL with a seasonal service in summer REJECT • Option 7 – Consider alternative routes for freight and discontinuation of route with focus on Uig-Tarbert REJECT

14. Assessment of remaining options

15. Assessment of remaining options

16. Subsequent Work – Vessel Options In depth evaluation and technical analysis of • Capacity requirements • Weather limitations and how this can be mitigated by optimum hull design • Vessel design • Technical reliability • Frequency of service and turnaround times • Fuel sources and types • CO2 emissions • Operating Costs • Capital Costs • Availability of second hand tonnage

17. Subsequent Work - Harbours • In depth and ongoing consultation with Stornoway Port Authority and Ullapool Harbour Trust • STAG for Ullapool (Atkins) and development analysis Stornoway (Halcrow) • Review of existing facilities including condition survey • Requirements for shore infrastructure moving forward • Parking and Marshalling • Need for harbour legislation amendments and planning consents • Working with both authorities to develop realistic development plans to phase development and meet need • Grant Management Group for prioritisation of grant money

18. Subsequent Work - Finance Analysis of financial options including • Scottish Government voted loans • Finance Leases • Operating Leases • Other innovative financial products Following analysis a potentially affordable option has been identified that does not necessitate SG capital commitment.

20. Summary of Options following Analysis

21. Purchase or charter of existing ferry • Work closely with a number of brokers including Clarksons and SC Chambers • Trend towards much larger ROPAX (super ferries) within the industry • Over 44% of tonnage that is of required size over 25 years old now • To date no suitable second hand tonnage has become available for any of the options being considered • High risk strategy to rely on this method to secure replacement vessel(s)

22. Replace MUIRNEAG with a like for like freight vessel either new or second hand PROS • Cheapest option (£17.5m for new vessel and potentially substantially less for second hand) • Improved reliability • Ability to take dangerous goods and livestock • Meets business needs for overnight freight service (at least 20 drop trailers) • No major changes required to shore infrastructure although substantial investment required regardless at Ullapool and to a lesser extent Stornoway CONS. • No improvement on timetable • No increase in capacity and will provide insufficient future car capacity based on future traffic growth

23. Acquire a smaller ROPAX vessel to supplement MV ISLE OF LEWIS PROS • 2nd Cheapest option in terms of immediate capital requirements (£34m for replacement vessel) • Improved reliability • New vessel can take dangerous goods and livestock • Flexibility of service and redundancy if one ship is out of service • Potential for increased number of daily scheduled sailings • No major changes required to shore infrastructure although substantial investment required regardless at Ullapool and to a lesser extent Stornoway CONS • Not optimum solution for weather reliability • Will not be able to take all freight traffic in one overnight sailing • Operating costs will be significantly higher than present including fuel and crew • Likely lower RV in the event of leasing arrangement leading to higher charges.

24. Acquire a larger ROPAX vessel PROS • Increased reliability particularly in heavy weather • Addresses capacity issues and provides additional ROPAX sailings • Can take present and projected night time freight traffic in one sailing • Larger vessel allows fuel efficient hull forms to be used whilst still meeting capacity requirements • Can take dangerous goods and livestock • Faster crossing • Lower operating costs than 2 ROPAX including fuel and crew • Good RV in the event of any leasing option • Allows IoL to potentially be deployed on other routes or sold CONS • 3rd cheapest in terms of capital requirements (£49m) but offset against likely lower leasing charges and savings from redeploying IoL or selling • Provision of additional infrastructure at Ullapool including improved marshalling facilities • Reduced flexibility compared to 2 ship option

25. Acquire two smaller ROPAX to replace ISLE OF LEWIS and MUIRNEAG PROS • Reliability • Addresses overall capacity issues • Can take Dangerous Goods and Livestock on both ships • Flexibility of service and redundancy if one ship is out of service • Potential for increased number of daily scheduled sailings • No major changes required to shore infrastructure although substantial investment required regardless at Ullapool and to a lesser extent Stornoway • Allows IoL to potentially be deployed on other routes or sold CONS • Most expensive in immediate capital requirements (£68m) • Will have higher weather limitations than larger ship • Lower RV than larger ship option in the event of leasing. • Significantly higher operating costs than one ship option

27. CMAL and DML Emerging Preferred Option • After thorough analysis and appraisal the Boards of CMAL and DML have reached the initial conclusion that the best option to take forward is the procurement of a new 116m Roll on Roll Off Passenger Ferry for service on the Stornoway – Ullapool Route • That whilst this new ship will be more weather and technically reliable, efficient and able to meet current and predicted capacity levels until at least 2025 than the current vessels serving on this route this does not in any way preclude additional tonnage being sourced in future if demand dictates.

29. Proposed Euro Class B Passenger/Vehicle Ferry New Ro-Pax Design

30. Proposed Euro Class B Passenger/Vehicle Ferry 2 x 3500kW Azimuth Thrusters

31. Model Tests V = 19.2 kts PD = 5650 kW Draught = 4.8 m

32. New Design A – Model Testing

33. Main Dimensions • Length over all (max.)    116.0 m • Length pp            108.0 m • Breadth moulded            18.0 m • Depth, upper deck          12.8m • Depth, main deck            7.0 m • Design draught  4.8 m • GRT 7780t • Max Cars                                143 • Max Trailers                            20 • Max Passengers                     600 • Crew Cabins                           43 • Deadweight                             1530 tonnes

34. Technical Features • Design Speed 19.2knots at design draft. • The ship shall be designed as a twin-screw diesel-electric driven vessel with bulbous bow, raked stem and special form transom. • The main machinery shall consist of four medium-speed diesel engines, each coupled to an AC generator and feeding the ship’s main power plant. • The propulsion machinery consists of converters and electric propulsion motors, each motor driving an azimuthing pulling propeller unit with fixed-pitch propellers.    • One pair of fin stabilizers • Two (2) bow thrusters

35. Demand versus Capacity 2024Larger ROPAX – Assuming 3.4% annualgrowth from current levels

36. Demand versus Capacity 2024Larger ROPAX – Assuming 3.4% annualgrowth from current levels With 2 additional return sailings per week

37. Demand versus Capacity 2024Larger ROPAX – Assuming 1.7% annualgrowth from current levels

38. Proposed Replacement S-U VesselKey Characteristics • Proposed replacement is more efficient, more manoeuvrable, better reliability and a better weather operating envelope than either the IoL or Muirneag (can remain stationary off a berth in up to 39knots – Force 8) • Diesel Electric propulsion to minimise downtime and ensure better reliability • More efficient hull design • Burns less fuel than IoL and Muirneag based on same schedule yet is larger and faster. At today's fuel prices this equates to annual savings of £750k however she represents a significant increase in capacity to take into account RET and forecast traffic growth.

39. Proposed Replacement S-U VesselKey Characteristics . • Operates 24 hours a day. • Offers up to 4 sailings a day • Service speed is 19.2 knots allowing for a slightly faster crossing • Although the night sailing is predominantly for the freight traffic she will be capable of taking cars and passengers which enhances the service levels to people travelling to and from the island. • More affordable than a two ship solution for this route. • Does not preclude additional vessel going on the route if there is sufficient demand. • The replacement vessel will be able to cope with forecast traffic for many years to come without the need for this.

40. Next Steps • Consultation and any further analysis • Formal recommendation to Scottish Ministers • Interaction with Scottish Ferries Review • Ministerial Decision • Formation of Integrated Project Team for vessel and harbour works • Procurement and Harbour Consents • Construction • Entry into Service

41. THANK YOU