INVOLVING retailers in Jersey’s ferry tender process would “not have been appropriate”, the Economic Development Minister has said– as he once again defended his decision to award a 20-year contract to DFDS.
In a statement yesterday, Deputy Kirsten Morel also dismissed calls from one of Jersey’s largest supermarkets for a public inquiry into the handling of the tender – insisting the process was fair, transparent and independently scrutinised.
It is the latest in a series of criticisms levied at the minister for the decision to award the Danish ferry firm the long-term contract in place of Condor. Plans for a joint-ferry tender process with Guernsey were scrapped when they awarded Condor’s parent company Brittany Ferries the contract.
Deputy Morel said the tender was “conducted in full accordance with Jersey’s public procurement framework and subject to rigorous, independent evaluation”.
He added that ministers had unanimously approved DFDS as the preferred bidder after “careful consideration of all the evidence”.
His comments follow a Scrutiny hearing this week, during which Jersey’s main retailers – including Morrison’s, the Channel Islands Co-operative, Sandpiper and Alliance – told the Economic and International Affairs Panel that they had been shut out of the process.
Representatives said they had “zero involvement” in the tender and warned that rising freight costs under the new arrangements were forcing them to find hundreds of thousands of pounds to balance their budgets, with Morrison’s alone facing a shortfall of up to £400,000.
During the hearing, operations director Andrew Holmes said the switch to DFDS, coupled with new freight and port charges, had increased costs for Morrison’s by 6.1% in five months.
“If it’s going to add, from what I’ve read, possibly £60 million to the costs over that period of time, then I think there’s got to be an inquiry into it,” he said. “I do believe that ultimately the person who was managing that tender, which is the government, is at fault here.”
In his response, Deputy Morel rejected suggestions that the process was flawed and defended the decision to replace volume-based discounts with a single fixed freight rate – a policy DFDS has said was required under the government’s tender.
“The move to a flat-rate freight charge was designed to make the market fairer and more competitive,” he said. “Under the previous volume-based system, we believe that some freight forwarders benefited from rates which were half those paid by others. That structure effectively shut out competition. The new system ensures operators can compete on equal terms.”
Deputy Morel also pushed back against claims that DFDS was responsible for all the recent cost increases.
He said: “Only around 40% of total freight costs relate to shipping,” he said. “The remainder reflects charges within the freight forwarding sector, which are not set by the government or DFDS. It appears that some of the increases being passed to retailers come from elsewhere in the supply chain.”
“I understand that some retailers would have liked to have been more involved, but it would not have been appropriate for commercial operators or end users to participate in a live tender process. Doing so would have compromised both fairness and confidentiality. All stakeholders are now being engaged as part of the implementation phase, and the Government is committed to maintaining open and constructive dialogue.”
Earlier this week, DFDS also argued that it had met with supermarket representatives before the new service began and made “a number of changes in response to their feedback”.
The company said the replacement of freight vessel Arrow with Trader had “enabled further improvements to freight schedules, reducing volatility in departure and arrival times”.
The Danish operator added that retailers were not direct DFDS customers, with freight arranged through forwarding firms such as Ferryspeed, and that it remained in “regular contact” with those companies.
It also said flat-rate charges were “a requirement of the government’s tender process” and would have applied regardless of which operator was appointed.
