Board Report Minutes 2014 Oct

DAVID MACBRAYNE LIMITED

MINUTES OF BOARD MEETING HELD AT THE UK CHAMBER OF SHIPPING OFFICES,

30 PARK STREET, LONDON, SE1 9EQ, AT 10 A.M. ON WEDNESDAY 1 OCTOBER 2014

____________________________________________________________________________________

Present:                         Mr D C McGibbon, Chairman

                                      Mr S Hagan

                                      Ms P J D Stark

                                      Mr J Stirling

                                      Mr A V Tait     

                                      Mr M Dorchester

                                      Mr R L Drummond

 

In attendance:               Mr R Hadfield, Scottish Government (Assessor)

                                      Mr C P Paterson, Board Administrator

 

  1. PRELIMINARIES

 

Welcome and Apologies for absence

Mr McGibbon extended a welcome to Mr Hadfield.

Apologies for absence were received from Mr Easton.

 

Declarations of interest

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

 

  1. MINUTES/MATTERS ARISING

Approve Minutes of Board Meeting held on 18 June 2014

 

Mr Hadfield noted a correction to an earlier amendment to the 14 March 2014 Minutes, in that, as Scottish Government (Assessor), he should be notified of Special Board Meetings being arranged.

 

Chairman’s remarks

P2 Mr McGibbon noted that reference to the Tripartite Meeting Chairman being yet to be appointed, should be deleted.

  1. Strategic developments

It was clarified that the two ‘potential proposals’ should be noted as Marchwood and Community Broadband Services.

Items for noting 7.2

Mr Stirling was incorrectly credited with the remark on Safety, when it was in fact Mr Easton’s comment.

Action points

The Board noted that the Current Issues brief was in preparation.

 

Subject to the foregoing amendments, the Minutes for the Board Meeting held on 18 June 2014 were approved.

 

Matters arising

There were no matters arising.

SAFETY MOMENT

Introducing an additional focus on safety, the Board discussed events which had occurred to individual board members, from which safety lessons could be taken. Mr Stirling and Mr Dorchester related incidents where they had almost fallen while carrying a child, one due to objects littering a floor and another involving a fall down stairs. Mr Dorchester referred to a recent Seafarers Roadshow, where a Master had noted that he stopped someone going down stairs and had asked them to use the handrail. Ms Stark considered that the Gourock Office should erect a board which displays the Company’s Safety Record and the Board discussed a similar approach on board vessels, as well as signage.

 

                       

  1. CHAIRMAN’S REMARKS

 

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

 

Mr McGibbon noted that the Deputy First Minister, Nicola Sturgeon, MSP, had announced the contract to build a third hybrid vessel.

 

  1. GROUP REPORTS

 

4.1  Group CEO update

  1. OPERATIONAL PERFORMANCE UPDATE

1.0 Safety & Risk

Mr Dorchester presented the report.

Mr Dorchester commented on the Group’s safety performance, noting that the vessel MV Isle of Lewis stands out as being a regular location for incidents. He noted that there was a challenge in reducing the number of incidents. Noting that the Loch Seaforth was soon to be accepted by CalMac, he highlighted the control and ownership of safety that the crew would be undertaking.

Mr Dorchester noted that Board members had enjoyed two Wood Group PSN training sessions in its Aristos safety leadership programme. He indicated that he would be proposing to ask the Board to consider the implementation of a similar programme.

The Board discussed the programme, noting that while not all of it would apply to Group operations, it could sit within the Transformation Programme.

2.0 Technical

2.5 3rd Hybrid procurement agreed

Mr Hadfield noted that the announcement of the contract for the third hybrid was now in the 30 days notice period, which would complete in the first week in November.             Mr Dorchester noted that he would be signing a Charter Party in due course.

When considering the current reliability of the two operating hybrid vessels, the Board noted the potential reputational risk attached to the future deployment of the new vessel. It was noted that customer feedback was good. Mr Hadfield noted the expected build completion as being in the Autumn of 2016.

The Board and Mr Hadfield discussed the lessons learned from the operation of the first two vessels, how to communicate the desired variations for the new vessel to CMAL and the need to view all associated documentation.

2.3 MV Loch Seaforth estimated delivery

Mr Dorchester noted that Mr Ure had suggested a potential 2 -16 week delay due to software problems. The equipment supplier appeared to on the verge of receivership.    Mr Ure and CMAL would report on the current position next week. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

The Board noted the effect of further delay on crew morale, including the additional delay cost.

2.8 MV Clipper Ranger Charter extended

Mr Dorchester additionally noted that the MV Loch Seaforth carrying capacity had been discussed with the Outer Hebrides Tourist Association and the WIIC. He also noted that use of the new vessel will change the profile of freight shipments. While MV Clipper Ranger could convey all trailers overnight, customers currently understood that new discipline will be required towards offering freight trailers across all sailings on MV Loch Seaforth to ensure shipment.

3.0 Operations

3.1 LGV/Weighbridge

Mr Dorchester noted that there was now general support and acceptance from freight operators for the new weighbridge requirements.

3.5 Wemyss Bay and Gourock closure announcements

Mr Dorchester thanked Mr Hadfield for his support of the announcement strategy. He noted that Project Planning will be heavily focused on operations to ensure a successful outcome. Mr Stirling confirmed that the importance of completing Gourock works before Wemyss Bay works commenced had been emphasised to CMAL. Mr Dorchester noted that any Ardrossan/Brodick weather diversion during the project period would provide additional challenge.

4.0 HR and our People

The Board enquired about a Roadshow being rolled out to explain the Transformation Programme to staff. Mr Dorchester advised that some 20 Roadshows were planned with a ratio of 3 or 4 Managers to an audience of around 20 staff.

The Board discussed the content of the transformation and the fact that staff feedback was over the potential effect of CHFS.

4.1 Pay negotiations

Mr Dorchester noted that the pay negotiations had been concluded. He also noted that there may be room for staff and local Union representatives to improve communication channels. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

5.0 Marketing/PR

5.1 CalMac Kids’ Club

Mr Dorchester noted that a partnership was being explored with Stramash, an outdoor pursuits organisation.

5.7 Conference

Mr Dorchester noted that CalMac, in partnership with HITRANS, was hosting a Travel and Tourism Conference in Oban on 28 October and invited Board members to attend. Direct Marketing Organisations would also be attending.

5.8 Partnership developments

Mr Dorchester noted that Virgin Group had expressed interest in exploring the possibilities of a partnership.

5.11 Winter TT

Mr Dorchester noted that if a new Transport Minister was appointed in the near future he would raise the issue of obtaining earlier Winter TT approval.

6.0 Strategic priorities

Mr Dorchester noted that 2014/2015 was an important period for infrastructure projects. He noted that Valiant and Titan were progressing well and that a more detailed report would be issued to the board, incorporating challenges being met.

Mr Dorchester noted that the Marchwood and Community Broadband projects were also progressing and that there was a continual review of other potential partnerships.

6.8 Valiant

Returning to Valiant, Mr Dorchester noted that CMAL had been having some difficulty approving proposed trench excavation and mast erection. Mr Drummond had met recently with CMAL to improve internal communication problems and consent. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

General discussion

The Board noted that an interview with Mr Stirling on Safety Culture was due to be released later in the month.

The Board noted that conference calls on Marchwood and Community Broadband would be arranged as different approval stages arose.

Mr Hadfield noted that a discussion had taken place between Mr Drummond, Mr Main, Mrs Sumner and Mr Ranald Robertson, Partnership Director, HITRANS, on network demand and capacity and future consultation arrangements.    

Mr Hadfield noted that the Public and Commercial Services Union was campaigning for Public Bodies to become Accredited Living Wage Employers. He offered that applying for accreditation could be considered by the Group.    

 

4.2  Group Finance update

Mr Drummond presented the report.

  1. Key Group Financial Numbers

Mr Drummond noted that the report showed an outcome of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] ahead of plan. Influencing factors were an increase of 3% in Farebox income and the effect of marketing campaigns. He did not expect these results to reverse. Retail revenue was also noted to have increased.  

Mr Drummond noted a subsidy underspend on MV Loch Seaforth and Valiant and an adjustment on CHFS Bid costs due to slower implementation.

  1. PROGRESS FOCUS

 

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

 

Portfolio Overview

Mr Drummond presented the Transformation Programme

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

Mr McGibbon asked if updates on the Transformation Programme could be circulated to the Board on a regular basis. Mr Drummond agreed to arrange issue.

Action1: Mr Drummond

Project Argonaut

Mr Drummond noted that Argonaut was close to launch. Phase 1 could be delivered now, but was being temporarily held while content availability was being increased, which would have an effect on Phase 2 release. Other technical considerations were the final testing of the email replication system and log-ons.

 

Project Infinity

Mr Drummond noted that a change of Technical resource was imminent which might lead to a delay. However a key issue was progressing well, with a planned upgrade of an outdated version of Citrix. 

 

Project Titan

Mr Drummond noted that Titan was progressing well, with a green RAG status.

 

Project Veritas

Mr Drummond noted that content had been successfully moved into the new Data Warehouse and that significant performance feedback had been reported by users.

 

Mr Drummond noted that managing short term contractor contracts was challenging due to a competitive market.

 

Operational Initiatives

 

Project Ecoship

Mr Drummond noted that preferred bid was currently in a 14 day evaluation period. 

 

  1. ANY OTHER BUSINESS

 

Framework Agreement

The Board asked for a Framework Agreement update. Mr Drummond noted that the document was under final review and would be circulated to the Board in due course. He thanked Mr Hadfield for his support in the process.

 

Corporate Plan

The Board asked for a Corporate Plan update. Mr Dorchester indicated that he would ensure circulation.

Action2: Mr Dorchester

Vessel Replacement Strategy

Mr Hadfield noted that the next development of the vessel replacement strategy was the approval of an order for two 100M ships. CMAL was ready to issue an OJEU Notice, subject to the approval of the Minister for Transport and Veterans, Keith Brown, MSP.

Interferry Conference

Mr Dorchester noted that he and Mr Ure had attended the 39th Annual Interferry Conference and CalMac were asked to become members of Interferry Europe. He noted the invitation had to be carefully evaluated to assess the benefits of Board membership. He noted that there was a focus on maritime legislation and how it’s introduced.

National Mod

Mr Dorchester noted that the National Mod was in Inverness on 10th – 18th October and encouraged Board members to attend if they were available.

MV Loch Seaforth

Mr McGibbon commented on the impact of the delays to the introduction of the MV Loch Seaforth and the protracted Charter negotiations.

 

The Board discussed the matter [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)]

 

  1. APPENDICES

 The Board noted the supporting papers for the Group CEO update.

                        

  1. NEXT MEETING

 The Board noted that an extra meeting would be held in December, on a date to be agreed.

 

…………………………..

Chairman

 

DAVID MACBRAYNE LTD

 

BOARD MEETING ACTION POINTS

 

Meeting

Action No.

Responsibility

Topic

Action  

01/10/14

1

RLD

Portfolio overview

Transformation Programme to be circulated to the Board on a regular basis.

01/10/14

2

MD

Any other business

Corporate Plan to be circulated to the Board.