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Next step in possible ferry purchase is for States to agree how to fund it

Next step in possible ferry purchase is for States to agree how to fund it

Monday 17 January 2022

Next step in possible ferry purchase is for States to agree how to fund it

Monday 17 January 2022

Having last week announced its intention to buy a ferry to lease to Condor, the Policy & Resource Committee hopes this week to agree a funding arrangement to turn the idea into reality.

The President of the Committee, Deputy Peter Ferbrache, thinks the deal can make financial sense as well as strengthening the island's transport links.

And he is assuring the Bailiwick that that the States are not about to commit to losses of the type which have affected States-owned airline Aurigny in recent years.

The Policy & Resources Committee's announcement at last week’s Scrutiny Management Committee public hearing took the public and Jersey by surprise. The Economic Development Minister in Jersey, Senator Lyndon Farnham, said it was “unexpected”.

In a podcast with Express, Deputy Ferbrache said that a decision needed to be made to protect the interests of the people of Guernsey and that his Committee has been working on it for "a fair time".

"I can’t say whether it has been eight months or a year because I simply can’t remember," he said.

"I don’t want to criticise Jersey, but there have been conversations with Jersey – not with me personally but with civil servants – and it hasn’t developed as quickly as we would have liked. 

"Now I don’t want that to be taken as a criticism of Jersey. They’ve got different thoughts and considerations. So we thought we’ve got to secure the interests of the Bailiwick of Guernsey.”

Deputy Peter Ferbrache

Pictured: The States have owned an airline since 2003 and two fuel supply tankers since 2009. Deputy Peter Ferbrache hopes shortly to add a ferry to the States' transport portfolio. The States' trading interests are run by the States' Trading Supervisory Board. 

Deputy Ferbrache and his colleagues on the Policy & Resources Committee, the senior committee of the States, now need to agree how to fund the purchase of a vessel and agree a deal with Condor under which the company would operate the vessel on behalf of the States. 

Deputy Ferbrache said that a contract with Condor "could well be done by the end of January".

“Funding is being looked at in the next 10 to 12 days,” he said. 

“Until you’ve got a commercial contract signed, you can’t say for sure, but there’s a better than even chance that it will go through.

“The idea is that a conventional ferry would add support to Condor’s current cluster of ships, which would give more security and an enhanced service to the island.”

States Deputies Money

Pictured: The Policy & Resources Committee anticipates the States investing between £15million and £20million on a new vessel.

In 2015, a report which went before the States' Assembly - which can be read in full HERE - stated: “Although some segments of the incumbent operator’s business are profitable - in particular, the northern freight route - others do not cover their incremental costs. This results in a cross subsidy to support those incremental and fixed costs.”

It is believed to be a long time since passenger ferries serving the island provided lucrative returns on their own without any cross subsidy from other routes and freight services.

Express asked Deputy Ferbrache if the States were on the brink of taking on "another Aurigny".

“No,” said Deputy Ferbrache.

“You’re right about passenger services. Certainly over the past two years, they have made miles less than break-even.

“You need a composite carrier to bring your freight and bring your passengers because I doubt it would be attractive to a sensible consistent provider to just service our passenger routes.

“It has to be commercial. They’ve got to look to be able to make a profit over a period of time."

The Express podcast with Deputy Ferbrache is available HERE.

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