Tuesday, 25 May 2021
Department of Rural and Community Development
581. To ask the Minister for Rural and Community Development further to Parliamentary Question No. 745 of 18 May 2021, if she will outline the differential in the guide price for this service versus all other island services funded by her Department; the reason the guide price for this contract is so low; her views on whether the low guide price is prohibitive to companies putting on more than the minimum outlined service; if her attention has been drawn to the restrictions to island living as a consequence of this minimum outlined service; and if she will make a statement on the matter. [28094/21]
As the Deputy will be aware, this relates to a procurement matter, which is currently underway. This process is being undertaken in keeping with the standard approach taken for ferry services subsidised by my Department.
When preparing a Request For Tender (RFT) for a ferry service, my Department includes an estimate cost. This is based on the contract that is in operation, allowing for inflation, and serves to act as an indicative cost. When submitting a tender, prospective operators are required to set out their indicative subsidy requirement based on their costs and the service they are proposing. This can be influenced by the number of sailings being proposed, and should also take account of expected income from ticket sales.
The subsidy required for ferry services varies from island to island, contingent on competition for/on the route, the costs arising for the operators themselves, the location of the island, the number of passengers/tourists etc.
When developing an RFT, the frequency of the sailings requested is a minimum level required. Distance from the mainland and the availability of shops, schools and local services all contribute to the number of minimum sailings required. Prospective operators may offer additional sailings and services, and such additionality is encouraged and welcomed.
When scoring the proposals, marks are given for additional sailings, marketing etc, with operators being expected to develop the business and the service. The RFT does not limit the number of sailings in any way.