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ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

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Page 1: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

ROAD EQUIVALENT TARIFF STUDY

Argyll & Bute Council

Lochgilphead

Thursday 17 April 2008

Graham Laidlaw, The Scottish Government

Page 2: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

ROAD EQUIVALENT TARIFF STUDY

The SNP’s manifesto contained a commitment to:

“Commission a study into Road Equivalent Tariff

(RET), reporting on options for improved

connection to our northern isles and western isles

by end of 2007. As part of this we will undertake a

pilot project on RET to the Western Isles which will

include support for freight and tourist journeys.”

Page 3: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

John Swinney, Cabinet Secretary for Finance and

Sustainable Growth announced during a visit to

Stornoway on 13 August 2007 that the Scottish

Government was fulfilling this manifesto

commitment to carry out a study, including a pilot

exercise on one or more of the Western Isles to

mainland routes.

ROAD EQUIVALENT TARIFF STUDY

Page 4: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

On 26 February Stewart Stevenson, Minister of Transport,

Infrastructure and Climate Change announced that –

•the pilot exercise would commence on 19 October 2008;

•the pilot exercise would feature all the Western Isles to

mainland routes and also include services to Coll and

Tiree.

ROAD EQUIVALENT TARIFF STUDY

Page 5: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

3 Phases

• Phase 1 – Desk based exercise

• Phase 2 – Monitoring the pilot study

• Phase 3 – Evaluation of the pilot

Page 6: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – stage 1

• Review approaches to fare setting for public service ferries in other countries, including the RET approach

Page 7: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – stage 2

• Offer definitions of RET that could be applied to all categories of passenger and vehicular traffic in the context of ferry fares for the Clyde and Hebrides and Northern Isles routes which are subsidised by the Scottish Government

Page 8: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 - stage 3

• Provide an initial analysis of the potential impacts (especially in economic and social terms) of the introduction of the RET approach

Page 9: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – stage 4

• Make recommendations on the design and implementation of a pilot study applying RET probably on one or more of the routes connecting the Scottish mainland and the Western Isles, including the choice of route(s), anticipated costs, start date, length of the pilot, operational constraints and any capacity constraints that may emerge

Page 10: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – stage 5

• Carry out any baseline information gathering in advance of the pilot that is considered necessary for subsequent monitoring and evaluation purposes

Page 11: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Scottish Ferry Network

• Clyde and Hebrides Ferry services – serves 22 islands and 4 peninsulas on Scotland’s west coast

• Caledonian MacBrayne has recently undergone a restructuring

• For the first time CHFS was put out to tender

• Fare levels are a consequence of historical reasons and tend to increase in line with inflation

• Return fares for cars range from £13.25 for the Colintraive – Rhubodach route to £137.00 on the Oban – Castlebay/Lochboisdale route

• Return fares per mile for cars range from £10.70 on the Colintraive to Rhubodach route to £0.77 per mile on the Oban to Castlebay/Lochboisdale route

Page 12: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Scottish Ferry Network

• Northlink Ferries Limited operate ferry services between the Scottish mainland to and from Orkney and Shetland

• Similarly to CHFS the services are tendered to comply with European legislation

• Fare levels are set in the tender specification and have been arrived at through historical reasons – from commercial fares set by P & O, through to today’s Public Service Contract

• Return fares for cars range from £86.40 on the Scrabster – Stromness route to £221.00 on the Aberdeen – Lerwick route

• Return fares per mile for cars range from £0.50 on Aberdeen - Lerwick to £1.45 on the Scrabster – Stromness route.

Page 13: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Ferry fares - international comparison

• A review was carried out into fare setting for public service ferries in other countries, including the RET approach. The countries reviewed in stage 2 include;

• Denmark, Sweden, Norway, Canada, Ireland, Spain, Germany and New Zealand.

Page 14: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – Stage 2

• Offer definitions of RET that could be applied to all categories of passenger and vehicular traffic in the context of ferry fares for the Clyde and Hebrides and Northern Isles which are subsidised by the Scottish Government

Page 15: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Factors Influencing Vehicle Running Costs

• Size of the engine

• Depreciation

• The age of the vehicle

• Fuel efficiency

• The weight or size of the vehicle

• The cost of fuel

• Petrol or diesel

• Mileage

Page 16: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Sources Considered

Cars

• Her Majesty’s Revenue and Customs

• RAC

• AA

Page 17: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Sources Considered

Commercial Vehicles

• Road Haulage Association

• Freight Transport Association

Page 18: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Sources Considered

Passengers

• Rail Passenger Fares

• Bus Passenger Fares

Page 19: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Inclusion of core fare element

Core fare added to pure RET fare element;

• Affordability; Budget for RET scheme announced in the Comprehensive Spending Review

• Cost Recovery; Large fixed cost element of ferry travel

(e.g. harbours and other infrastructure)

• Practicality (on short routes the fare would be too low and may not be worth collecting)

Page 20: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommended RET rates

Passenger Car CVs

Core fare Rate per mile

Core fare Rate per mile

Core fare Rate per metre per

mile

£2.00 £0.10 £5.00 £0.60 £20.00 £0.18

Page 21: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Impact of RET on current fares

• The Scottish Government has insisted that no subsidised ferry fares should increase under RET.

• Where the new RET fare formula results in an increase above the current cheapest fare level the RET fare will be pegged at the lowest available fare.

• The following tables show that the new RET fare formula results in substantial discounts compared to commonly purchased tickets types on the vast majority of routes considered.

• However, there are a few exceptions reflecting the significant range of distances involved across the CHFS and Northlink networks and the numerous fares that currently exist.

Page 22: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RET fares comparison 1

  Current RET Change Current RET Change Current RET Change

  Passenger Passenger %  Car Car  % CVs CVs  %

Gourock - Dunoon £2.85 £2.43 -14.77% £7.03 £7.57 0.0% £81.78 £32.57 -60.17%

Wemyss Bay - Rothesay £3.33 £2.68 -19.49% £13.50 £9.06 -32.87% £71.44 £37.82 -47.06%

Colintraive - Rhubodach £1.05 £2.06 0.0% £6.63 £5.37 -18.91% £24.68 £24.81 0.0%

Tarbert - Portavadie £2.78 £2.35 -15.50% £12.75 £7.07 -44.55% N/A £30.80 N/A

Ardrossan - Brodick £4.48 £3.18 -28.92% £27.00 £12.09 -55.24% £116.56 £48.48 -58.41%

Lochranza - Tarbet/Claonaig £4.03 £2.50 -37.96% £18.00 £7.98 -55.66% £83.66 £34.01 -59.35%

Largs - Cumbrae £1.90 £2.12 0.0% £8.00 £5.71 -28.65% £57.22 £26.00 -54.57%

Kennacraig - Islay £7.20 £5.23 -27.35% £38.50 £24.39 -36.66% £173.90 £91.84 -47.19%

Oban - Craignure £3.63 £2.93 -19.12% £25.50 £10.59 -58.46% £122.91 £43.21 -64.84%

Fishnish - Lochaline £2.23 £2.19 -1.44% £9.65 £6.16 -36.19% £71.21 £27.58 -61.26%

Fionnphort - Iona £1.98 £2.10 0.0% N/A N/A N/A N/A N/A N/A

Oban - Coll/Tiree £11.40 £7.97 -30.08% £67.00 £40.83 -39.07% £241.82 £149.79 -38.06%

Oban - Castlebay/Lochboisdale £18.75 £10.95 -41.61% £68.50 £58.69 -14.32% £323.83 £212.75 -34.30%

Mallaig - Armadale £2.98 £2.50 -16.07% £16.25 £7.98 -50.88% £55.70 £34.01 -38.93%

Uig - Tarbert - Lochmaddy £8.55 £4.92 -42.46% £41.00 £22.52 -45.07% £181.42 £85.26 -53.01%

Ullapool - Stornoway £13.25 £7.22 -45.51% £63.50 £36.32 -42.80% £257.56 £133.90 -48.01%

Tayinloan - Gigha £2.85 £2.25 -21.09% £10.55 £6.49 -38.45% £81.55 £28.77 -64.72%

Raasay - Sconser £2.50 £2.19 -12.28% £9.75 £6.16 -36.84% £88.36 £27.58 -68.78%

Comparison of RET fares and ½ 2008 summer 5 day saver return ticket

Page 23: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – Stage 3

• Provide an initial analysis of the potential impacts (especially in economic and social terms) of the introduction of the RET approach

Page 24: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Demand for ferry services

• To estimate the anticipated change in demand and the impact on revenue from the introduction of RET it is necessary to know the price elasticity of demand for ferry services.

• The price elasticity of demand is used to measure consumers’ behavioural response to changes in the price of a particular good or service.

• Important to note that some users may be relatively more (or less) price sensitive e.g. Visitors, Residents, Freight users

Page 25: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Demand for Ferry Services

• Scottish Office Study (1980’s) – Most comprehensive study available; but dated, silent on timescale of impacts, silent on visitor and resident elasticities, based on marginal not step changes in fares.

• In response to these challenges it was agreed that this exercise would simply consider the impact on revenue if fares were amended to reflect the RET system and demand did not increase.

• While demand is unlikely to remain constant, this would represent a “worst case” scenario in terms of estimating the revenue impact as well as the need for additional subsidy.

Page 26: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Potential Revenue Impacts

Route Change in Revenue (000,000)

Western Isles -£7.65 

Orkney -£2.60 

Shetland -£0.18 

Firth of Clyde -£7.23 

Inner Hebrides  -£4.19

Skye -£0.65 

Southern Hebrides  -£2.16

Total -£24.64

Potential change in fares revenue under RET (No change in demand)

Page 27: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Economic Impacts

• Analysis based on consultations with local groups including councillors, council officials, business representatives, hauliers, Visit Scotland, HITRANS and CalMac as well as findings from of other research studies.

• Overall the introduction of RET was welcomed by consultees and it is believed it will make a very important contribution to improved economic performance of the islands.

Page 28: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Economic Impacts

• Impact on business transport costs; a number of consultees suggested that reduced fares would lead to an increase in their competitiveness, compared to other companies on the mainland, through reduced costs. Others noted fares are small % of total transport costs.

• This could lead to an increase in demand and output, resulting in higher levels of employment and improved economic performance in general.

• Winners and Losers; It was suggested that RET would increase local business exposure to mainland based competition (e.g. local retailers). Also suggested that current ferry fares may be protecting some local businesses from mainland competition and RET would remove this barrier.

Page 29: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Economic Impacts

• Hauliers rebates; 2% - 15% discount off standard CV fares. Hauliers emphasised that these rebates enable them to compete and operate on a par with mainland hauliers.

• Large retailers (e.g. Boots, Superdrug and Woolworths); It was explained by the hauliers however that reduced fares may mean the logistics of delivering goods direct to the Western Isles using company-own lorry fleets may become cost effective.

Page 30: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Economic Impacts

• Business travel – a reduction in fares would allow business to travel more with a limited travel budget or make savings on a fixed number of trips, savings that could be invested on other aspects of company business.

• Business start-ups – the consultees also claimed that reduced fares could make business opportunities that are currently not viable a more attractive proposition in the future.

Page 31: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Social Impacts

• A number of consultees felt that the main benefits of reduced fares via RET would be social rather than economic. The case was made that RET would provide islanders with greater opportunity and choice and allow them to engage in activities that those on the mainland engage in.

Page 32: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Social Impacts

• Declining population; An independent Study for Comhairle nan Eilean Siar entitled the Outer Hebrides Migration Report identified the cost and availability of transport as a key driver of population change.

• It was suggested by the vast majority of people consulted that lower ferry fares would eliminate one of the factors that was prohibiting people from staying on the island. It would also help to attract others. Making it more affordable for people to visit friends and family on the mainland would allow people to feel more socially included.

Page 33: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Social Impacts

Proposed Ferry Discount Scheme: Research for HITRANS identified numerous potential social impacts;

• Allow increased social interaction with family and friends on the mainland;

• Provide cheaper access to specialist services and facilities on the mainland which are not available on the islands.

• Increased travel opportunities for those on lower incomes and/or with families for whom the ferry will remain more affordable than air services, even with the Air Discount Scheme;

• Meet the increasing expectations of mobility/transport services which are prevalent not only in the Outer Hebrides but throughout Scotland;

• Allow increased interaction between groups, societies and sports teams based in the islands and those on the mainland;

• In sum, allow greater participation of island residents in Scottish society by reducing travel costs to a level closer to those mainland communities.

Page 34: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Tourism Impacts

• One of the main benefits of lower ferry fares identified by a number of consultees was the positive impact it would have on tourism.

• It is anticipated that the reduction in fares would make holidaying in the Western Isles a more attractive proposition and lead to a greater number of visitors to the islands.

Page 35: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Tourism Impacts

• A reduction in ferry fares is more likely to benefit the long-stay holiday market rather than the short-break visitor as the latter is more sensitive to air fares given the length of the visit.

• There was some concern raised that at present there is not enough accommodation to satisfy any increase in tourism demand, particularly in the peak periods. Consultees explained however that capacity would increase to satisfy any positive shift in demand.

Page 36: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Tourism Impacts

• While there is no strong evidence to suggest that the current ferry fares are a major prohibitive factor for people holidaying in the Western Isles, the proposed RET rates would generate a significant reduction in the cost of travelling between the mainland and the Western Isles.

• However, it is clear that the cost of the ferry is only one part of the total cost of a holiday. Other factors such as the availability and quality of accommodation also important. Evidence suggests there is limited spare capacity in the summer months.

Page 37: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Infrastructure Issues

• In addition to economic and social impacts, the introduction of RET is also likely to lead to an increase in the number of vehicles on the main ferry routes.

• As part of the impact analysis for the Western Isles an assessment was undertaken to determine the possible impact on the supporting infrastructure, in particular the roads serving the main ferry terminals.

• Overall there were no significant issues identified in relation to the supporting infrastructure which would inhibit the introduction of RET on routes serving the Western Isles.

Page 38: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – Stage 4

• Make recommendations on the design and implementation of a pilot study applying RET probably on one or more of the routes connecting the Scottish mainland and the Western Isles, including the choice of route(s), anticipated costs, start date, length of the pilot, operational constraints and any capacity constraints that may emerge

Page 39: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 1

• Due to the anticipated displacement that may occur if RET is introduced on one or two routes and not others then, if the aim of the pilot study is to give a reliable indication of the impact of introducing RET across the network, it is recommended that the pilot study include all routes sailing between the mainland and the Western Isles.

Page 40: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 2

• To gain a better understanding of the impact of rolling RET out across the network, it is recommended that, while there are clear affordability issues, the Scottish Government give consideration to also including a shorter route with different demand characteristics within the pilot.

Page 41: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 3

• The introduction of the pilot study may distort demand on the Oban – Coll/Tiree route and provide users with an incentive to buy the cheaper ticket for the longer Oban – Castlebay/Lochboisdale route. In response to this it is recommended that the Oban – Coll/Tiree route be included in the pilot.

Page 42: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 4

• There are a large number of discounts and rebates offered to CalMac users. Once RET is introduced, it is recommended that all discounts and rebates, other than concessions, be removed.

Page 43: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 5

• To ensure that mechanisms are in place to maximise opportunities from RET, it is recommended that RET be introduced to coincide with the introduction of the winter timetable in October 2008.

Page 44: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Recommendation 6

• It is recommended that RET be introduced as a pilot in October 2008 and operate until the spring of 2011.

• The impacts will be monitored and evaluated with a decision made towards the end of this period on rolling out the fare system across the network in summer 2011.

Page 45: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 1 – Stage 5

• Carry out any baseline information gathering in advance of the pilot that is considered necessary for subsequent monitoring and evaluation purposes

Page 46: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Short term indicators

• Annual Ferry Traffic Numbers;

• Passengers, Cars & CVs

• Capacity Utilisation

• Split of user type by season;

• Passengers/Cars – Residents

• Passengers/Cars – Visitors

Page 47: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Short term indicators

• Key Labour Market Statistics;

• Employment

• Unemployment

• Participation rates

Page 48: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Short term indicators

• Indicators of local business activity;

• Accommodation occupancy rates

• Business confidence, turnover, profitability and costs

• Business start-ups

Page 49: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Short term indicators

• Other important indicators;

• Prices of goods and services

• House prices

• Quality of life

• Environment

Page 50: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Medium – long term indicators

• Overall economic indicators

(including GVA, Population, Demographics etc)

• Sectoral activity and performance

• Investment levels

• House and land prices

• Quality of life

Page 51: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 2

• Will involve the monitoring of the pilot study

• Gathering of traffic statistics and information

• Consultation with ferry users and local employers, including freight and tourist sectors

• Designed to allow the impact of the pilot to be assessed – especially in economic and social terms

Page 52: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Phase 3

• Involve an evaluation of the pilot

• Making use of the information gathered through the baseline and monitoring exercise

• Quantify the costs and benefits which could arise should RET be applied on a permanent basis and rolled out across the CHFS and Northern Isles networks

• Identify any capacity constraints that may emerge from a permanent roll out

• Quantify the costs of increasing the capacity to meet demand through additional or larger vessels, and new shore infrastructure

Page 53: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RET Presentation

• Questions

Page 54: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Annex

Page 55: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Her Majesty’s Revenue and Customs

Flat Rate First 10,000 miles Miles over 10,000

Car 40p 25p

Motorcycle 24p 24p

Bicycle 20p 20p

Approved Mileage Allowance Payments

Page 56: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Her Majesty’s Revenue and Customs

• Aimed to represent a fair reimbursement for car use

• But may not represent the average cost of running a car

• Designed to encourage the use of environmentally friendly cars

• Set in 2002-03 but hasn’t risen since then despite increases in fuel costs

Page 57: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RAC – Factors included in running costs

• Engine size

• Fuel consumption

• Depreciation

• Financing charges

• Fuel cost

• Servicing and maintenance

• Tyres and replacement parts

• Insurance premium

Page 58: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RAC

Engine Size (cc) 1000

1200

1500 1800 2000

2500

3000

3000+

Cost per mile 28.0 33.3 37.3 52.5 61.1 76.4 85.3 106.2

RAC Estimated Vehicle Running Costs – Petrol Engines

Page 59: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

AA

Cost new (£s)

Up to 10,000

10,000 to 13,000

13,001 to 20,000

20,001 to 30,000

Over 30,000

5,000 miles 55.99 69.34 92.47 130.64 193.91

10,000 miles 36.32 43.88 56.70 78.55 112.80

15,000 miles 29.93 35.60 45.09 61.64 86.52

20,000 miles 26.83 31.62 39.52 53.54 73.95

25,000 miles 24.80 28.98 35.80 48.12 65.50

30,000 miles 23.41 27.17 33.24 44.39 59.67

AA Estimated Vehicle Running Costs (in pence) – Petrol Engine per mile

Page 60: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Road Haulage Association (RHA)

  Vehicle Type  3.5

Tonne

7.5 Tonne

13 Tonne

18 Tonne

26 Tonne

32 Tonne

32/33 Tonne

38 Tonn

e

40 Tonne

41 Tonn

e

44 Tonne

Total distance related costs per mile

17.9 26.8 33.7 38.7 49.3 59.6 50.4 55.7 56.7 58.9 61.4

Total distance related costs per km including depreciation

29.6 41.7 52.1 54.7 68.9 84.2 63.5 68.2 70.6 73.4 78.5

Total time and distance related cost per mile

96.0 116.9 148.0140.

9153.

5178.0 149.0

143.7

149.5152.

0161.4

RHA – Estimated commercial vehicle running costs (in pence) per mile

Page 61: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Freight Transport Association (FTA)

  Vehicle Type

  3.5 tonnes

- petrol

3.5 tonne

s - diesel

7.5 tonne

10 - 12 tonnes

12 - 14 tonnes

17 tonnes

3 axle rigid 24.39

tonnes

4 axle rigid

tipper 32

tonnes

2 axle tractor

/ 2 axel

trailer 33

tonne artic

2 axle drawin

g vehicle / 2 axle

trailer 32.5

tonne

3 axle tractor

/ 3 axel

trailer - 44

tonne artic

Total distance related costs per mile (pence)

27.7 21.8 30.2 34.6 38.8 36.5 47.3 78.4 54.8 51.8 67.8

Total time and distance related cost per mile (pence)

134.3 107.3 90.1 103.9 110.2 103.6 116.2 179.5 125.1 122.1 137.9

FTA - Estimated commercial vehicle running costs (in pence) per mile

* Costs per mile are for a selection of commercial vehicle types

Page 62: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

First Scotrail

Departure Point Arrival Point

Equivalent Road

Distance (Miles)

Standard Return Fare

- £

Fare per mile

(return) - £

Alness Invergordon 3.19 3.60 0.56

Fearn Tain 3.88 3.00 0.39

Plockton Kyle of Lochalsh 7.99 3.80 0.24

Spean Bridge Fort William 9.29 5.40 0.29

Taynuilt Oban 12.3 6.40 0.26

Georgemas Junction Wick 15.24 6.00 0.20

Glasgow Ardrossan 31.71 9.45 0.15

Bridge of Orchy Fort William 39.85 14.40 0.18

Inverness Kyle of Lochalsh 78.59 30.00 0.19

Glasgow Stranraer 84.55 34.80 0.21

Glasgow Oban 96.9 29.30 0.15

Inverness Wick 103.26 25.20 0.12

Glasgow Fort William 107.23 38.20 0.18

Edinburgh Aberdeen 125.46 60.00 0.24

Glasgow Mallaig 149.62 44.60 0.15

First Scotrail – Estimated passenger cost per mile (£)

Page 63: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

Citylink

Departure Point

Arrival Point Road

Distance (Miles)

Standard Single Fare -

£

Fare per mile (single) - £

Standard Return Fare -

£

Fare per mile (return) - £

Inverness Kyle of Lochalsh 78.59 13.80 0.18 23.40 0.15

Glasgow Stranraer 84.55 13.80 0.16 18.40 0.11

Glasgow Oban 96.90 15.00 0.15 26.59 0.14

Inverness Wick 103.26 15.00 0.15 26.00 0.13

Glasgow Fort William 107.23 16.10 0.15 17.20 0.08

Edinburgh Aberdeen 125.46 19.70 0.16 33.50 0.13

Glasgow Mallaig 149.62 21.00 0.14 36.50 0.12

Citylink Buses – Estimated passenger cost per mile (£)

Page 64: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

CalMac

Departure Point Arrival PointCrossing Distance

(miles)Standard Return

Fare - £Fare per mile

(return) - £

Colintraive Rhubodach (Bute) 0.6 2.05 1.71

Largs Cumbrae Slip 1.2 4.20 1.75

Tobermory Kilchoan 3.7 6.70 0.91

Wemyss Bay Rothesay (Bute) 6.8 6.50 0.48

Oban Lismore 7.5 4.90 0.33

Oban Craignure (Mull) 9.3 7.10 0.38

Ardrossan Brodick (Arran) 11.8 8.75 0.37

Mallaig Eigg 12.4 9.85 0.40

Mallaig Canna 23 18.3 0.40

Uig (Skye) Tarbert / Lochmaddy 29.2 16.75 0.29

Kennacraig Islay 32.3 14.10 0.22

Oban Colonsay 36.6 19.80 0.27

Ullapool Stornoway (Lewis) 52.2 26.00 0.25

Oban Coll/Tiree 59.7 22.35 0.19

ObanCastlebay /

Lochboisdale 89.5 37.00 0.21

CalMac - Estimated passenger cost per mile (£)

Page 65: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RET rate analysis

Passenger Car CVs

Core fare Rate per mile

Core fare Rate per mile

Core fare Rate per metre per

mile

£0 £0.10 £3 £0.40 £10.00 £0.15

£1 £0.20 £4 £0.50 £20.00 £0.16

£2 £0.30 £5 £0.60 £30.00 £0.17

£3   £6 £0.65   £0.18

      £0.70   £0.19

Matrix of RET fares considered

Note; a combination of core fares and RET rates were tested as part of the RET rate analysis

for all user types including Passenger, Car and CV’s.

Page 66: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RET fares comparison 2

Comparison of RET fares and 2008 winter single fare

  Current RET Change Current RET change Current RET change

  Passenger Passenger %  Car Car  % CVs CVs  %

Gourock - Dunoon £2.85 £2.43 -14.77% £8.00 £7.57 -5.33% £81.78 £32.57 -60.17%

Wemyss Bay - Rothesay £3.00 £2.68 -10.77% £12.20 £9.06 -25.72% £71.44 £37.82 -47.06%

Colintraive - Rhubodach £1.05 £2.06 0.0% £5.80 £5.37 -7.38% £24.68 £24.81 0%

Tarbert - Portavadie £3.20 £2.35 -26.72% £14.65 £7.07 -51.74% N/A £30.80 N/A

Ardrossan - Brodick £3.95 £3.18 -19.47% £25.50 £12.09 -52.60% £116.56 £48.48 -58.41%

Lochranza - Tarbet/Claonaig £3.85 £2.50 -35.14% £19.80 £7.98 -59.69% £83.66 £34.01 -59.35%

Largs - Cumbrae NA £2.12 N/A N/A £5.71 N/A £57.22 £26.00 -54.57%

Kennacraig - Islay £6.60 £5.23 -20.74% £37.50 £24.39 -34.97% £173.90 £91.84 -47.19%

Oban - Craignure £3.35 £2.93 -12.48% £24.85 £10.59 -57.38% £122.91 £43.21 -64.84%

Fishnish - Lochaline £2.55 £2.19 -14.00% £11.15 £6.16 -44.77% £71.21 £27.58 -61.26%

Fionnphort - Iona na £2.10 N/A N/A N/A N/A N/A N/A N/A

Oban - Coll/Tiree £10.60 £7.97 -24.80% £63.00 £40.83 -35.20% £241.82 £149.79 -38.06%

Oban - Castlebay/Lochboisdale £16.70 £10.95 -34.44% £68.00 £58.69 -13.69% £323.83 £212.75 -34.30%

Mallaig - Armadale £2.70 £2.50 -7.52% £15.70 £7.98 -49.16% £55.70 £34.01 -38.93%

Uig - Tarbert - Lochmaddy £8.75 £4.92 -43.77% £40.00 £22.52 -43.70% £181.42 £85.26 -53.01%

Ullapool - Stornoway £12.45 £7.22 -42.01% £59.00 £36.32 -38.44% £257.56 £133.90 -48.01%

Tayinloan - Gigha £2.55 £2.25 -11.80% £8.90 £6.49 -27.03% £81.55 £28.77 -64.72%

Raasay - Sconser £2.10 £2.19 0.0% £8.70 £6.16 -29.22% £88.36 £27.58 -68.78%

Page 67: ROAD EQUIVALENT TARIFF STUDY Argyll & Bute Council Lochgilphead Thursday 17 April 2008 Graham Laidlaw, The Scottish Government

RET fares comparison 3

  Current RET Change Current RET change Current RET change

  Passenger Passenger  % Car Car  % CVs CVs % 

Gourock - Dunoon £2.32 £2.43 0% £5.10 £7.57 0% £81.78 £32.57 -60.17%

Wemyss Bay - Rothesay £2.75 £2.68 -2.65% £9.50 £9.06 -4.61% £71.44 £37.82 -47.06%

Colintraive - Rhubodach £0.83 £2.06 0% £4.60 £5.37 0% £24.68 £24.81 0%

Tarbert - Portavadie £2.23 £2.35 0% £8.83 £7.07 -19.96% N/A £30.80 N/A

Ardrossan - Brodick £3.61 £3.18 -11.84% £19.83 £12.09 -39.06% £116.56 £48.48 -58.41%

Lochranza - Tarbet/Claonaig £3.23 £2.50 -22.57% £12.50 £7.98 -36.14% £83.66 £34.01 -59.35%

Largs - Cumbrae £2.59 £2.12 -18.22% £9.40 £5.71 -39.28% £57.22 £26.00 -54.57%

Kennacraig - Islay £5.83 £5.23 -10.33% £26.33 £24.39 -7.39% £173.90 £91.84 -47.19%

Oban - Craignure £2.95 £2.93 -0.61% £17.67 £10.59 -40.05% £122.91 £43.21 -64.84%

Fishnish - Lochaline £1.78 £2.19 0% £6.75 £6.16 -8.77% £71.21 £27.58 -61.26%

Fionnphort - Iona £2.56 £2.10 -17.81% N/A N/A N/A N/A N/A N/A

Oban - Coll/Tiree £9.33 £7.97 -14.60% £45.83 £40.83 -10.93% £241.82 £149.79 -38.06%

Oban - Castlebay/Lochboisdale £15.17 £10.95 -27.82% £47.17 £58.69 0% £323.83 £212.75 -34.30%

Mallaig - Armadale £2.41 £2.50 0% £11.33 £7.98 -29.57% £55.70 £34.01 -38.93%

Uig - Tarbert - Lochmaddy £7.00 £4.92 -29.71% £28.83 £22.52 -21.90% £181.42 £85.26 -53.01%

Ullapool - Stornoway £10.83 £7.22 -33.35% £44.33 £36.32 -18.08% £257.56 £133.90 -48.01%

Tayinloan - Gigha £1.97 £2.25 0% £6.40 £6.49 0% £81.55 £28.77 -64.72%

Raasay - Sconser £1.44 £2.19 0% £4.55 £6.16 0% £88.36 £27.58 -68.78%

Comparison of RET and 2008 multi-journey ticket

Note: multi-journey tickets shown in cost per single journey