Board Meeting Minutes March 2015

CalMac Ferries Limited

Minutes of the Board Meeting held in the Boardroom, Gourock, at 10am on Wednesday 4 March 2015  

Present                          Mr D C McGibbon, Chairman

                                      Mr S Hagan    

                                      Ms P J D Stark

                                      Mr J Stirling

                                      Mr A V Tait

                                      Mr R L Drummond

                                      Mr M Dorchester

                                      Mr S A Ure

In attendance:               Mr A Collier, Operations Director

                                      Ms C Roberts, HR Director, David MacBrayne HR (UK) Ltd

                                      Mr B Fulton, Bid Team Service Delivery Lead

                                      Mr C Paterson, Board Administrator

____________________________________________________________________________________

1.         PRELIMINARIES

Safety Moment

Mr Dorchester commented on Celebrity Cruises' safety ethos, highlighting the plaque that had been nominated by the IMO for installation on the bridge of each of the 11 large cruise liners. He emphasised the importance of the Group operating safely and how it had a similar approach to safety as Celebrity Cruises.

Mr McGibbon welcomed Mr Collier, Ms Roberts and Mr Fulton to the meeting.

1.1       Apologies for absence

Apologies were offered by Mr Easton. Mr Dorchester note that Mrs Craig was speaking at the Scottish Tourism Alliance's Tourism Vision Conference.

1.2       Declarations of interest

There were no further declarations of interest, other than those previously made and known to all Directors.

2.         MINUTES/MATTERS ARISING

2.1       Minutes of previous meeting

2.1   Minutes of the Board Meeting held on 10 November 2014 to be approved.

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

                                                                                               Action1: Mr Collier/Mr Paterson

Subject to the foregoing amendment, the Minutes of the Board Meeting held on 10 November 2014 were approved.

      The Action points were noted to have been completed.

      2.2   Minutes of Special Board Meeting held on 10 September 2014 to be approved.

      The Minutes of Special Board Meeting held on 10 September 2014 were approved.

2.3   Minutes of Board Meeting (MV Loch Seaforth) held on 20 August 2014 to be approved.

The Minutes of Board Meeting (MV Loch Seaforth) held on 20 August 2014 were approved.

2.2       Matters arising

There were no matters to record.

3.         CHAIRMAN'S REMARKS

Mr McGibbon congratulated Mr Dorchester on the successful David MacBrayne Joint Venture Bid for the Marchwood Concession.

Mr McGibbon noted that the Minister for Transport and Islands, Derek Mackay, MSP,had indicated that it would be beneficial to meet with Unions to discuss a review of the CalMac Pension Fund structure.

Mr McGibbon noted that a Tripartite meeting would be held with CMAL and Transport Scotland on Friday 6 March. He would be attending along with Mr Dorchester and Mr Drummond.

The Board discussed the matter, considering both the Tripartite arrangement and CMAL's role in the forthcoming CHFS Bid process.

4.         OPERATIONAL PERFORMANCE REVIEW

Mr McGibbon thanked the contributors for the appendices to the Managing Director's report, noting that they were very informative.

MANAGING DIRECTOR'S SUMMARY

1. OPERATIONAL PERFORMANCE UPDATE

1.1 Safety and Risk Report

Mr Dorchester indicated that he would address the highlights of his report.

Safety Performance

Mr Dorchester noted that in the period between June 2014 and today, there had been a visible and tangible improvement in safety awareness and evidence that the numbers of incidents were decreasing. He noted that initiatives such as the Safety Orientation Training Package were contributing to an improved safety culture.

Mr Drummond noted that there had been one RIDDOR and eight MAIB reports submitted in the last period.

1.2 Key Business issues

1.2.5 Mr Dorchester congratulated Mr Collier for his work towards the Seaforth Taskforce meetings, the Taskforce having been set up by the Minister. He noted that the Company had taken the lead in the matter. It was also noted that Mr Iain MacKinnon, Director of Technical Services, CNES, had printed off the CHFS PQQ and was seeking to discuss aspects of it. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

1.2.7 Mr Dorchester noted that the Company was starting the delivery phase of Gangway, Project Argonaut and Safety Orientation Training. He invited Board Members to view the Training Package.   

1.3 Customers

Mr Dorchester noted that customers were receiving improved service levels through extended Call Centre hours, Port calls being re-directed to the Call Centre, if there was an answer delay, and Facebook™ and Twitter™ updates were being regularly issued.

1.6 Technical

Mr Dorchester noted that the 3^rd Hybrid Charter Party had been signed by the Company and that build seems to be progressing to timetable. He also noted that the independent report on the Hybrid vessels had been received. Mr Ure highlighted a number of findings.

Mr Dorchester noted that Project Valiant was struggling with delays which in the main are arising from issues with CMAL. He had sent Mr Docherty, the Chief Executive, a table of responses from local Councils, to demonstrate their willingness to accommodate the demands of the Project.

The Board discussed the ongoing difficulties of the implementation of Project Valiant.

2. STRATEGIC DEVELOPMENTS

3. Commercial

3.3 Mr Dorchester noted that the Company's newly updated commercial website was being launched shortly and was pleased with its redesign.

4. Outlook

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

4. The Leadership Academy had been launched and the Executive Team would be attending. He invited Board members to attend if they wished.

7.  The Fraser of Allander Economic and Social Impact of CalMac Ferries Ltd on Scotland Report had been prepared and was believed to favourably comment on the Company's contribution to the Scottish Economy. Mr Dorchester noted that he would share this with the Board when details were available.  

On a separate matter, the Board noted that a previous CHFS update had shown a timeline and requested that this be included in future, along with a cumulative spend note. Mr Drummond agreed to address these aspects.

Action2: Mr Drummond

FINANCE REPORT

Mr Drummond presented his paper.

2.  Key Financial Numbers

Mr Drummond noted that the first two pages of his report set out the financial position for 10 months to 31 January 2015. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]. Both Farebox and Retail had performed ahead of expectations. There was a current underspend on some projects, but these costs would be reflected in the next Financial Year.

3. CHFS Contract year 7 update

Mr Drummond noted that there were some discussion points around the Operator Return and Clawback element. Formal agreement on additional Support Services costs to be charged in the Financial year 31/03/2015 had been requested from Transport Scotland. Mr Drummond indicated that he would circulate a note to the Board when he had an update.  

4. CHFS Contract year 8 update

Mr Drummond noted that the budget was 20-30% more than the budget last year and that the bulk of increased costs lay with the introduction of MV Loch Seaforth. He noted that all of the additional costs were stated.

The Board noted that a pictorial perspective of additional costs would be helpful and                  Mr Dorchester agreed to examine how this could be portrayed.

Action3: Mr Dorchester

5.        PROGRESS FOCUS

[FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

Mr Hagan left the meeting.

            The Board discussed the effect of potential costs savings in various areas of the Company.

Pensions update

Ms Roberts noted that the Minister planned to talk to Unions about the health of Pension Schemes and would be seeking to write this aspect into the Bid on the proviso that Unions agreed a reformed scheme inclusion. The Minister would be meeting with Unions in week commencing 16 March 2015, with a view to consultations in April.

The Board noted that pensions should be raised during the PQQ process to alert other bidders to potential challenges which might arise. The period of engagement and the potential effect on the Bid process was also discussed.

6.        PRESENTATIONS

Due to the extended discussion time on other items, the Presentations were cancelled.

7.        SUBSIDIARY

            Caledonian MacBrayne Crewing (Guernsey) Ltd

The Board noted the Minutes of the Subsidiary Board Meetings held on 11 August and 24 October 2014.

8.  ANY OTHER BUSINESS

There was no other business raised.

9.  APPENDICES 

The Board noted the appendices to the Managing Director's summary.

10. NEXT MEETING

To be held at Oban on 12 May 2015.

.........................................

Chairman

CALMAC FERRIES LTD

BOARD MEETING ACTION POINTS