Govt has got it wrong - SPC never expected offer would be rejected

By Adrian Darbyshire in Local People

Steam Packet bosses have expressed their ‘surprise and disappointment’ that the Council of Ministers voted to reject their offer for a new strategic sea services agreement.

And they have warned that if Tynwald does not approve the offer at this week’s sitting, they will have ‘no alternative’ but to withdraw it - and any other agreements made on the basis that a deal would have been done.

That means, for example, the Steam Packet could stop chartering the MV Arrow freight vessel during the TT and perhaps refuse to use the government’s proposed new landing stage in Liverpool.

Steam Packet chairman Robert Quayle has written to Infrastructure Minister Ray Harmer calling on Tynwald to vote ‘yes’ or ‘no’ to the offer and not just ‘note it’.

He wrote: ‘The text of your motion and the accompanying report has been received by the company with considerable surprise and disappointment.

‘We feel the company’s position had been misrepresented. You have indicted the department’s decision was “finely balanced”. It would be unfortunate if that balance was adversely affected by some misunderstandings or misinterpretations.’

The offer includes a pledge to invest of £170m in a new fleet, facilities and fare initiatives.

Mr Harmer insisted there has been no negotiation and rejecting the offer would allow that to begin.

But Mr Quayle said talks had been going on for more than a year which had resulted in a revised ‘best and final’ offer being submitted in March.

He wrote: ‘Since January 2016, the terms of that offer have been exhaustively discussed with your department, other agencies of government, interested third parties such as TravelWatch and the Chamber of Commerce and various consultants.’

Ministers are concerned at the length of the agreement of 25 years, and at the proposed fleet configuration, saying two smaller vessels would be better than a larger one and a fast craft.

Mr Quayle said the issue about the make-up of the fleet was ‘never raised during the prolonged negotiation period’.

The Steam Packet chairman also disputed the figures outlined in a consultant’s report, which he claimed ‘seriously understates’ the costs of delivering elements of the offer.

He wrote: ‘The cost of new vessel investment is £51m, not the Oxera estimate of £12m. Oxera suggest that having a back-up vessel is somehow a net financial benefit to the company. The actual predicted cost is £37m.’

Mr Quayle said the uplifts in the value of the company from a new sea services agreement was ‘very much less than the £89m predicted’.

He told Mr Harmer: ‘Had the company been given the opportunity to challenge these highly contentious Oxera conclusions at the time, we believe your department might have reach a different conclusion.’

Mr Quayle added: ‘If Tynwald declines to approve the offer, the company regrets it will have no alternative but to withdraw the present offer terms and any other agreements predication on the introduction of the SSSA.’

He denied that without a new agreement fares could be raised and services cut as these were closely regulated in the user agreement.

The user agreement refers to the exclusive use of the government-owned linkspan at Douglas.

But Mr Quayle told iomtoday said: ‘One thing the government seems to have overlooked is the fact that we also own a linkspan.

‘We will be 196-years-old in 2026 and we are not going to go away.

‘We will continue to operate using our own link span and that could affect the attractiveness of the route for other operators.

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RichEader · 5 days ago · Report

Spook, comparing fares with the likes of Stena/P&O/etc is like comparing apples and oranges. Big vessels carry more cargo/passengers more efficiently than small vessels and can charge lower fares. The Ben is small, like it or not. And yet by all reports IOMSPC fares are comparable to those of the other Irish Sea carriers. I think that's commendable. But I do wonder what became of the other 'interested parties.' Maybe the business is not as lucrative as some here like to think it is.

Fell · 5 days ago · Report

CV I was just qualifying your 100 year comment. To be honest I find the IOMSPC to be not bad but not outstanding. Nice staff, not terribly nice boats, clean, reasonably reliable, expensive but no worse than other companies, not really attracting tourist growth.

Fell · 5 days ago · Report

CV the last I heard was a press release from Ann Reynolds saying that they had received 5 or 6 "serious" EOIs. Given they had stated that they would be evaluating them all as part of awarding the future strategic sea services contract one can only hope they did that. Dead silence since then.

Manx born (formerl CV) · 6 days ago · Report

Fell I have heard nothing recently about other offers. Have you? And have you noticed any difference in the way IOMSP has operated these past 25 years? I haven't

Manx born (formerl CV) · 6 days ago · Report

You accused Alan Bell of being corrupt Spook. And your evidence of benchmarking fare is what exactly?. I think your definition of what IOMSP has been doing recently as corrupt practice is nonsense. What exactly have they done wrong? Given their side of the story? And Strix are the world leaders in their field. Hardly bog standard. Who did you work for Spook? Were they not respected for what they did.

Spook · 6 days ago · Report

Now where did I accuse anyone of being corrupt, what has taken place is that the process of bidding for the contract is corrupted by the way that the ferry company has engaged interests and blackmail in the public domain in the expectation of bringing pressure on the contract adjudicator. As for Strix, what on earth is there about Strix that warrants 'respect'? It's just a bog standard commercial enterprise.

Fell · 6 days ago · Report

CV, the problem in what you say is that today's IOMSPC has not served us for 100 years. Brand ownership has changed hands four times in the last 25 years - in 1996 it was Sea Containers, in 2003 Montagu Private Equity, in 2005 Macquarie Bank and in 2011 Banco Espiritu Santos. We should not think that this is the same local company founded in 1830. That is one reason it makes sense to compare one commercial offer with other commercial offers from supposedly interested serious ferry operators.

Manx born (formerl CV) · 6 days ago · Report

Spook, get your facts right. It was the system that was found to be corrupt, not the man. And where is your evidence of corruption by IOMSP and the benchmarking of fares? Your comments about respect are not worthy of further debate, but look up Strix and tell me that that is not a respected company.

Spook · 6 days ago · Report

CV, in this case the corruption is in the same order as Bell was found to have engaged in when the independent report on his actions over the Santan planning drains up was published. As for Manx businesses worth 'respect' - name some. Legal, mostly. Honest, mostly mostly, but RESPECT is a different matter. So name some.

Manx born (formerl CV) · 6 days ago · Report

Yes Fell, it should be a major concern for all residents, The question really is do we trust a company who has served us well for over 100 years and whose ships and fares compare favourably with other ferry companies or do we trust politicians who have been in the job for a very short time and know nothing or very little about the subject. My only hope that MHKs don't read some of the nonsense spouted in here

Manx born (formerl CV) · 6 days ago · Report

I know what corruption means Spook. I asked you where your evidence is for alleging it and you haven't answered the question. Also, where is your evidence of benchmarking fares? Your comment about one single Manx business that cannot be respected is so nonsensical it deserves no further comment.

Spook · 6 days ago · Report

Maybe if the owners of the ferry service were not benchmarking the fares on other ferry services but on the actual cost of providing the ferry service the fares we are forced to pay would fall substantially. The other operators run very different services than ours which in reality is a pip squeak thing by comparison with Stena and P & O.

Fell · 6 days ago · Report

CV you have identified that negotiations on a 25 year 'strategic sea service' for the IOM are being conducted by a Department you call "Incompetent". Should that be a concern for residents and businesses here? What are your thoughts about that?

Fell · 6 days ago · Report

I'd support comments from frequent use of Irish Ferries, Stena and P&O on the Irish Sea that IOMSPC fares are very comparable. Also the vessels are similar ages. I'd just like to see a proper comparison of all EOIs.

Spook · 6 days ago · Report

Nice try, CV, firstly the word corruption has a number of meanings and is context specific, the Bell Santon investigation highlighted that but actually to introduce blackmail in a rant to the press is a long way from engaging in ethical business conduct. As for 'respected', I can not think of a single Manx business that 'respected' could be applied to other than tongue in cheek. To add, I'm not confusing my 'Quayles'. Respected? In a pigs eye.

Manx born (formerl CV) · 6 days ago · Report

Spook, are you confusing your Quayles? Robert Quayle is a former Clerk of Tynwald and is on the board of two other well known and respected companies. You throw out the word corruption yet have nothing to support it.

Manx born (formerl CV) · 6 days ago · Report

Skeeter Boy, I have no qualifications concerning shipping nor have I ever worked for IOMSP. But I don't accuse the company of mismanagement, corruption and ripping off the customers at every opportunity. I am just a satisfied customer who has travelled widely and therefore able to comment on fare comparisons.

Ron · 6 days ago · Report

Very naïve to think that the owner has no influence over operating policies of a company and "yes" there has been other cases of a banker owning a shipping company. J P Morgan owned "Titantic". White Star had been a company devoted to luxury not speed but things changed when speed became a priority. Having said all that, the company is less of an issue for me. What is the issue is ensuring minimum standards are met & only the government can do that.

hoodlum · 6 days ago · Report

Another vestige of the old boys club, what we have always done, is what we have always done. I believe for the first time the Government are looking at the implications of signing away the islands sea lifeline to a private company for a generation, and just maybe for once have their eyes open ! I agree they need to get this right and the bluster from Woodward and Quayle isn't helpful !

Skeeter Boy · 6 days ago · Report

Ok CV, so what do you know about running a shipping company - are you, or where you an SPC employee ? As a purchasing professional, I know that under government financial regs, the DOI should be seeking alternative quotations from all qualified operators who met the terms of the expressions of interest exercise - so where are they ??? Government need to be held to account if they don't go out to tender on this - Public Accounts Committee - take note !

Fell · 6 days ago · Report

We need an effective, efficient & reliable ferry service for businesses, residents & tourists. We need one, TT & MGP aside, attracts more than 80,000 inbound pax pa. We need one to reverse the significant decline in ferry use shown in government data. That is why it is important that our representatives should examine the other "serious" Expressions of Interest. IOMSPC may end up best - but better to be best out of a bunch of properly evaluated proposals than best out of a field of one.

Fell · 6 days ago · Report

CV I am not a ferry operator. I do know about running large businesses. It would be rare to award a 25 year contract without talking to all interested parties. You believe there have been long negotiations with the IOMSPC. If so, what also happened with the other EOIs Ann Reynolds asked for & received from "serious" ferry companies during the long period? Have the various company proposals for the award of a 25 year (inevitably) monopoly strategic sea service been compared?

Spook · 6 days ago · Report

The word corruption has many meanings, ask Bell when the word was applied to him following the Santon planning ----affair. As for Quayle what has he ever done in order to be respected? It is well said that respect has to be earned.

Gav · 6 days ago · Report

Whilst the foot fares are good, the car fares not too bad, the freight and commercial fares are extreme. Companies are charged, but the consumer, every Island consumer,pays, not just boat users. As such, this is a direct tax, and should be called as such, not hidden in Quaylespeak.

Manx born (formerl CV) · 6 days ago · Report

As i said Spook, a lot of hot air by people who know nothing about running a shipping company. I don't agree we are being ripped off. Try traveling across the channel for 4 hours and see how much it costs. And what do you mean by corrupt Spook? Or is that another of your incorrect or unsupported comments that you make? Your comments about Robert Quayle are totally unjustified.

Alistair Irving · 6 days ago · Report

Although the majority of MHKs in the last administration were adamant that they did not want the government to own it they new in their hearts of hearts it was the correct thing to do.Why did they not want to own it ?BECAUSE THEY WERE CONCERNED ABOUT THEIR LIFE BEING MADE HELL BY VOTERS CONTINUALLY CONTACTING THEM WANTING CHEAPER FARES. The Government should own it.

ET · 7 days ago · Report

The Ben would have some modest value in the Philippines or similar. The Manannan's age & type denotes it wouldn't. An ill-conceived outburst with the sole intention of creating political uncertainty and a bucket full of public fear to create pressure on nervous politicians. Still in excess of 8 years to fulfil contractual obligations or invoke a breach of agreement for the Courts to deal with. A strange approach for a company wishing to do long term business renewal. I'd retract!

Fell · 7 days ago · Report

CV and JO your comments would hold more water if the IOMG & DoI had not gone to the trouble of setting up a strategic review process that sought & got 5 or 6 "serious" EOIs from ferry operators including IOMSPC. Surely the right thing if that is the way they were going is to go through the comparison process. Rather strange business practice?

Spook · 7 days ago · Report

Don't try to obscure the issue, CV, although the owner isn't the day to day operator it's certain sure that if the operator wasn't toeing the line the owner would be down on them like a ton of bricks. In any case it's not necessary to be experienced in running a shipping company in order to know when we're being ripped off by one. And we're being ripped off by one and have been for years.

Manx born (formerl CV) · 7 days ago · Report

The owners do not run IOMSP Skeeter Boy, they just own it. Just like Trevor Hemmings doesn't ride or train the horses he owns. Simple really. Jacked off sums it all very well. Most of the rest is hot air from people who haven't a clue about running a shipping company.

Skeeter Boy · 7 days ago · Report

Why is a (Portuguese) bank running a ferry company ? Perhaps because it is making mega profits over and above those to be made by ordinary banking business ? Do we know of any other banks running ferry services - or are most ferry companies making only reasonable profits - that banks are not normally interested in ? Wake up Mr Quayle/Mr. Harmer - an open tender is the only way to ensure real value for money !

Spook · 7 days ago · Report

GOM - completely agree. This ferry company farce has gone on for far too long. To now be threatened and blackmailed is beyond belief - or would be anywhere else. Anyone still negotiating with Woodward or Quayle after this is unfit for office. The ferry company have shown themselves totally beyond the pale, immoral, and engaging in corrupt practices. They should NEVER be awarded ANY contract after this.

Grumpy Old Man · 7 days ago · Report

"We will be 196-years-old in 2026 and we are not going to go away." Less of the 'We' please. People will be turning in their graves hearing that. Especially how it all ended up with a Portuguese bank. Midgets standing on the shoulders of giants..no longer having the right to trade on other people's history - in my opinion. Time to rethink the whole venture and put the interests of the people and businesses of the island first.

Skeeter Boy · 7 days ago · Report

Tynwald Select Committee Report 2008 - SPC making over 30% gross profit against UK ferry company industry average of 10%. SPC freight charges upto 4 times those of other Irish Sea operators ! Having had expressions of interest from 7/8 other ferry operators, why aren't we asking for proposals from ALL those interested ? Absolutely ludicrous to be carrying on discussions only with a Portuguese bank, now 100 % owners of the SPC !

Spook · 7 days ago · Report

Quayle? Respected businessman? One word too many and it's not businessman.

Manx born (formerl CV) · 7 days ago · Report

Cont.....As with the sorry Vision One saga, I feel someone is being economical with the truth. Unfortunately this is a far more important matter with the future of the island at serious risk.

Manx born (formerl CV) · 7 days ago · Report

A Minister of the Department of Incompetence, who has been a MHK for barely two years claims there has been negotiations. Mr Quayle, a former Clerk of Tynwald and respected businessman claims there has been a prolonged negotiation period. Going by the track record of the Department of Incompetence I know whose version of events I believe.

Jacked off · 7 days ago · Report

Once again, who do the MHK's and Ministers think they are manipulating here - they haven't a clue about how a shipping company works on an island so if I were them I would shut up and understand that there's an extremely competitive shipping company here that's laid the cards on the table, put the figures in front of the public and showed all what they've offered, not one MHK or Minister on this island would do that with there job contract never mind a full blown business contact !

hoodlum · 7 days ago · Report

The government need to grow up here and let the SPCO know that they are the dog and the tail aint wagging them ! Seriously the SPCO have already demonstrated their interest is solely in the agreement to re value the company, time to think outside the box and stop being held to ransom by these two clowns !

Clock Weights · 7 days ago · Report

Good bye, Portuguese Steam Packet, and good riddance. Mind the linkspan doesn't hit your ars* on the way out!!

Spook · 7 days ago · Report

@ RichEader, apart from the fact that purchasing a ship or ships is to purchase a capital asset that can be sold if push comes to shove there are a number of ways that such capital assets can be accessed. There is absolutely no need to have a twenty five year contract let alone a monopoly. The ferry company are engaging in at least sharp practice and along with the threats and blackmail should be ruled out of being even considered. They have demonstrated that they are unfit.

RichEader · 7 days ago · Report

I can understand the IOMSP position. Buying new vessels suitable for limited ports in the world, they would be mad not to expect a long term contract as security against any financing arrangements. Every shipping company would do it; it's not like they all have a few hundred million floating around in their accounts that they don't know what to do with. Until I see some serious alternative tenders for the service, it seems that IOMSP are our best bet.

RichEader · 7 days ago · Report

I can understand the IOMSP position. Buying new vessels suitable for limited ports in the world, they would be mad not to expect a long term contract as security against any financing arrangements. Every shipping company would do it; it's not like they all have a few hundred million floating around in their accounts that they don't know what to do with. Until I see some serious alternative tenders for the service, it seems that IOMSP are our best bet.

Conch · 7 days ago · Report

it's all a big charade or is it façade, done deal?

Spook · 7 days ago · Report

With the exception of Harmer I don't trust any of them one little bit.

Spook · 7 days ago · Report

The more that I re-read the article and the remarks by Quayle the more gobsmacked I become at the sheer cheek, it beyond impertenance, that he's coming out with. He and Woodward have a darned nerve TELLING Harmer anything and then adding injury to insult by going to the press. They are not fit to run a rock shop let alone a ferry company.

Fell · 7 days ago · Report

Spook the thing I have difficulty with understanding is why did Ann Reynolds seek public expressions of interest, and say she had received 5 or 6 serious ones, then no effort seems now to be going into a comparison exercise? For goodness sake don't publicise that you're going to do it one way then only negotiate with one company - whoever that is.

Conch · 7 days ago · Report

I absolutely agree; I wouldn't trust them, they will go with IOMSPC again just watch they don't seem to have the nouse to negotiate any good or better deal within

Fell · 7 days ago · Report

Is it the company that will be 196 years or the oft transferred brand? A bit like Cadbury's being an old brand but now owned by Kraft - not by the old Quaker family. Frankly if the service is excellent the company can be called "The Birkenhead Boat Company" or "Boaty Boatface Ferries", whatever, for all it matters. The IOM has faced far greater threats than the change in the name of a Portuguese bank (and partners) owned ferry company. A desperate argument (in the Irish sense of 'desperate').

Spook · 7 days ago · Report

The linkspan is owned by the government which really means all of us. In looking for alternatives to the ferry company the risk is that any invitation to tender will include poison pills that will put other interested parties off. I wouldn't trust our negotiators one inch in this, there is just too much preference being given to cut a deal with the existing ferry company and not seeking the best deal possible.

Fell · 7 days ago · Report

Negotiating hype! As said - no problem with IOMSPC. IOMSPC value is the goodwill & profit generation of access to the Linkspan - User Agreement. Politicians should not panic. When negotiating for the best deal for local residents, businesses & tourists the value of the IOMSPC to the banks led by Banco Espiritu Santo is falling & will do so if no acceptable agreement is reached. They should chivvy Ms Reynolds up on the other interested "serious" parties so a fair comparison of offers can be made.

Conch · 7 days ago · Report

definition isn't an ultimatum only issued when you have exhausted all other options? If so, why issue an ultimatum? Is it not the last step in trying to wedge a square peg into a round hole as regards a deal that suits all.

manxman339 · 7 days ago · Report

The SPC owns it's linkspan but it doesn't own the land too which it is attached. Call their bluff. Let another ferry company use the government linkspan and then block off access to the SPC link.

Spook · 7 days ago · Report

Just to add, who owns the Douglas linkspan? I was under the impression it was owned by our government, not the ferry company.

Spook · 7 days ago · Report

DocMills, I REALLY couldn't agree more. But no matter what contract is agreed and no matter who it is agreed with there is no way that it should be for 25 years and no way that it should be a monopoly and no way that it should involve sole use of the or any future linkspan.

DocMills · 7 days ago · Report

IOMSPC's boats are breaking down. They are unable to raise the money for much needed new ones because they are already 'mortgaged' to the hilt. This is why they need the new agreement, so that they can use the extended monopoly as collateral to borrow more money. IOMG shouldn't be allowed to be held to ransom, however, without an new contract will IOMSPC actually be able to make it to the end of the current agreement?

Natterjack · 7 days ago · Report

"We will continue to operate using our own linkspan" hooray, competiton at last!!

BasseyKM · 7 days ago · Report

The £170M includes "fare initiatives". How does setting artificially high fares and then "discounting" them benefit the Manx Tax payer? I'd love to know how much of that £170M is made up of such dodgy accounting fudges.

Traveller · 7 days ago · Report

Be careful what you wish for! Manx Line folded, Mr Bucholz's (sp) Ellan Vannin company never got out of the starting blocks and Merzeron's alternative freight service disappeared without trace. We are 85,000ish people, less than a small UK town, therefore, there is not enough demand apart from a couple of times per year for competition.

Spook · 7 days ago · Report

So the threats continue. The ferry company should be told to do one on that basis alone.

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