By Richard Digard
WHEN the news broke that the islands were to go their separate ways over what was supposed to be a joint Channel Island approach to providing lifeline freight and passenger services, my immediate response was: what’s Jersey spotted that Guernsey hasn’t?
That comment was posted on X/Twitter on 1 November and, despite the various “explanations”, it still ranks for me as the primary question that needs addressing in this whole sorry saga.
Perhaps predictably, the Jersey view is that this island has been stitched up by those treacherous Donkeys to the north. Never trust Guernsey, only out for themselves. So much for the islands working together…
Similarly in Guernsey. The Crapauds have always had it in for Condor. That civil servant chappie at the Economy Department really let it out of the bag by voting for rival operator DFDS online and, anyway, Minister Kirsten Morel has never liked the company.
Well, I’m doubtful how much validity, if any, the popular theories have. I think it will take a lot of determined questioning in both islands truly to understand how and why something that on paper was so simple can have been cocked up so spectacularly.
As ever, it will be the ordinary people of these islands who will pay the price for government ineptitude: potentially higher freight and ferry costs and food prices under a two-operator model, inefficiencies of scale and – if Jersey fears are realised – taxpayer subsidies to keep an inherently unstable Condor afloat.
But between you and me, I always viewed this process as nothing more than an expensive and drawn-out charade by Guernsey to stick with Condor.
The reason, obvious to point out, is that ships are expensive. Operators tend not to have them hanging around just in case. So going out and asking for expressions of interest in a CI route to begin next March never made much sense. Well, unless you were rooting for Condor.
Any rival bidder most likely couldn’t give watertight guarantees about getting the necessary tonnage in time. So expressions of interest with a three-year start time would make far more sense if you were serious about getting truly competitive tenders.
Not least because these are small ports requiring small vessels, when the tendency in the shipping world is towards larger craft. Build your own, then? Well, yes, but lead times for that are pretty stretched because of existing shipyard constraints. This is why it took a year for Condor to find its second conventional ship, the well-used 19-year-old former MV Straitsman, and bring it back from New Zealand.
That was a move, incidentally, that prompted The Post in Wellington to report: “When asked how many times the ferry had been pulled out of service for mechanical issues, what the estimated service life of the ferry was, and why Condor chose to purchase the ferry from StraitNZ, Condor’s spokesperson declined to comment.”
On balance, that tells you rather a lot. Especially if a company with the ships is better placed to win a new 15-year contract… As implied by Brittany Ferries’ latest salvo aimed at both governments, DFDS’s apparent plan was to win the contract, trigger a fire-sale of Condor’s ships, get them cheap, and run with those.
Look at the tender process itself and there’s a lot of detail people in both islands need to know. How and by whom was the tender document put together? Drawing up a spec that’s (pardon me) watertight and capable of lasting 15 years isn’t your typical civil service/politician task. It needs specialist legal, technical and shipping input.
Where did the islands get it from? If, for instance, it came from anyone previously connected with any of the rival bidders, how unbiased would that look? And did the islands jointly sign off on the document?
Yes, I get you. It does sound like a daft question. Of course they did. This was a CI approach, wasn’t it? Well, yes. But if it was truly joint, then there would have been a representative body assessing the bids and a single pan-CI body announcing the outcome. Wouldn’t there?
So either Guernsey broke away from the shared process or two parallel tender assessment processes have been in place, clunky as that may sound.
As it happens, I think Deputy Neil Inder, president of Guernsey’s Committee for Economic Development, has confirmed that joint it was not. “At this stage Guernsey and Jersey have not reached a shared view on how to proceed. All I can say at this stage is that while both islands share common objectives, agreement has not yet been reached on the best way to jointly deliver those objectives.”
This troubles me hugely. If the islands were making tender assessments separately, was it on the same basis and with the same set of advisers? Perhaps more disturbing, why was the possibility of disagreement not considered and a process put in place to deal with that?
From what’s been said in Jersey, the “winning” bid from Brittany Ferries doesn’t include a flat rate for exports. Er… but if that was a tender-specific requirement, how could Guernsey accept the bid? Or, given there’s a scoring process used in these things, what other elements outweighed that?
The other troubling element is which parties are signing the contract. Again, from comments in Jersey over financial stability and resilience, that indicates doubts. Yet Brittany Ferries and rival DFDS are pretty solid. Condor, however, is not.
Has majority shareholder Brittany Ferries insisted any contract be signed with Condor, which is why this island is pushing back? If so, why? Guernsey, of course, helped buy the former MV Straitsman, which is leased to Condor.
This is a bit technical but former Treasury lead for the States of Guernsey Deputy Mark Helyar recently wanted to clarify something apparently said in Jersey. This is what he stated:
“A stand-alone company purchased the ship, financed by a loan from Guernsey. Guernsey owns 50% of that company and the loan is secured against the ship, meaning that if there is default the loan can be repaid via its sale, or the ship can be leased to another company. The ship is currently leased to Condor on commercial terms. No money has been loaned or given to Condor at any time.”
If I’m correct, Condor has few assets other than its vessels. But NatWest Bank has a charge in place on some or all of them, something which was registered at Companies House in July of this year. Nothing sinister in that as such, but is the 50% share in the company behind MV Straitsman/Condor Islander not owned by Guernsey subject to that NatWest charge?
In other words, if Condor was to stop trading, could Guernsey get all its money back by selling it or does another lender have a claim on 50% of it?
I ask because if DFDS gets grumpy over any perceived unfairness in the tender process, might Guernsey’s “investment” in an asset that gives an incumbent operator a theoretical advantage over rivals be grounds for legal action?
Agreed, that might be stretching things a bit too far. But if the two islands did score the rival bids separately, one coming out for Condor, the other for DFDS, what happens if you add up the points for DFDS and those for Condor? Dead heat or does one come out on top, a clear CI winner perhaps? Unsurprisingly, something currently being pursued by Brittany Ferries.
There’s a lot more detail to emerge in this saga, which also includes access to Portsmouth, possible grandfather rights of entry for Condor (and successor Brittany Ferries?) at St Peter Port and how that might impact a rival service.
Meanwhile, as you’ve gathered, this is an exceptionally involved area. The fundamental issue, however, is that an attempt at significant CI collaboration has not gone well. Worst case, it has failed spectacularly.
Two things on that. Firstly, this still has the potential to get materially worse – has either island scoped the cost and resilience ramifications of separate services, for instance? – and there’s still no end in sight. Secondly, what does it say for future collaborations between the islands?
Politicians and islanders from both sides need to know exactly what happened and where the points of failure were so that lessons can be learned for the future if Jersey and Guernsey are ever to work closely together.
Alas, without an independent, pan-island review – which will never happen – another Channel Islands opportunity has just been lost.
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Richard Digard is a former editor and director of the Guernsey Press and Star and has recently retired as chairman of Guernsey Post Ltd. He has been a Douzenier of the Vale Parish in Guernsey since 2016 and is a consultant and media commentator.
