Claim that Executive breaking EU law over ferries
Newspaper claims subsidies on island routes could be illegal without correct procedures
Subsidies safeguarding ferry services to Scottish islands could be illegal because the Scottish Executive has not properly justified their use under EU procedures, according to a report in today's Herald.
The newspaper quotes Stefaan De Rynck, an EU transport spokesman, and Professor Neil Kay of Strathclyde University as supporting the view that before subsidies can be paid, a "Public Serice Obligation" has to be defined in order to explain why a route requires a subsidy. The Executive however has taken the different approach of a "Public Service Contract".
The Executive believes that subsidies can be paid under either mechanism but the PSC route allows additional service quality checks.
If the subsidies are found to be illegal they could have to be repaid or the ferry tender process run all over again. The Northern Isles services have already been tendered and thee process for other routes is expected to begin shortly.
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