Northern Isles Ferry Services 4 (NIFS4)

Transport Scotland, on behalf of Scottish Ministers intend to procure a new contract for the provision of Ferry Services in relation to the operation of passenger, vehicle, and freight services in the Northern Isles. This contract will replace the existing public services contract which expires on 30 June 2028 at 1400hrs. The duration of the contract will be a maximum of 10 years (8 years + 2 years). The principal public services, supported by subsidy, are the Northern Isles Ferry Services (NIFS4) for foot passengers, vehicles and Freight. The NIFS network provides vital year-round transportation between mainland Scotland and the Orkney and Shetland Islands. The services connect Aberdeen to Lerwick (Shetland) with some sailings stopping at Kirkwall (Orkney), and Scrabster to Stromness (Orkney). Vessels are provided via a bareboat charter agreement from Caledonian Maritime Assets Ltd (CMAL). The estimated value for the delivery of these services is currently in the range of GBP 791 million to GBP 896 million with the forecast based on the above-noted maximum contract period (to 2038). In relation to fleet renewal, two new Freight Flex vessels are scheduled for introduction in the early years of the contract, in addition to plans for the replacement of the three RoPax vessels at a later date. In comparison with the existing contract, the proposed contract duration and fleet renewal plans under the NIFS4 contract are anticipated to lead to an increase in the overall net operating costs. The projected costs will remain subject to ongoing review as project costs, timelines and financial arrangements are refined. The current estimate is derived from assumptions on a number of variables including, but not limited to, fuel prices, fares policy, the deployment schedule for new vessels throughout the contract duration, and the continuation of existing funding mechanisms associated with provision of those vessels. Please note that any future changes to fares policy, vessel deployment plans, or funding arrangements will influence the final value of the NIFS4 contract.