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The Jersey Minister responsible for deciding which ferry operator will service the island has outlined a new tender process, but branded Condor’s bid as “unlikely to deliver” and “overly optimistic given the high levels of debt”.
Deputy Kirsten Morel told the States Assembly on Wednesday 13 November that Condor’s aged fleet and financial woes were “concerns” for the island, adding there was “no guarantee of there ever being future fleet investment.”
He explained Condor would likely require £36 million in funding in order to outsee its contractual obligations, adding that both Jersey and Guernsey have already paid approximately £3 million as part of a contingency to keep the company afloat.
It follows a slew of announcements yesterday that included:
Deputy Kirsten Morel has also outlined a new ferry process for the final two bidders, which he described as “short and simple”:
Deputy Morel used his parliamentary privilege to summarise his concerns with Condor Ferries, admitting that if Condor did not receive the next contract to operate the Channel Islands, they could fold before March 2025.
He told the States Assembly: “Last year, I received two requests for financial support from Condor Ferries. The first was for an 80 million euro guarantee and the second for 40 million euros, with 10 million needed urgently.
“Condor’s insolvency was ultimately prevented without the need for public funds from Jersey but we decided, with Guernsey, to protect our lifeline services by engaging contingency at a cost so far, of approximately £3 million to each island.”
He goes on to explain: “I have repeatedly sought reassurance from Condor Ferries and their shareholders that the company will improve its financial position and be able to complete its contractual obligations under the current operating agreement.
“I am yet to receive these reassurances.
“Condor Ferries would likely require funding from the Government of Jersey of up to £36 million in order to see out its contractual obligations.”
Deputy Morel also confirmed that while the bid was made in Brittany Ferries’ name, they have received confirmation that the Operating Agreement would be signed with Condor Ferries and not with Brittany.
He explains: “Our analysis of Condor’s business plan included growth plans that were deemed to be unlikely to deliver as they were overly optimistic given the high levels of debt in the company,
“Whilst there has been a promise of restructure, [debt] continues to remain [very high] and most importantly, their promises of future fleet investment are wholly dependent on successful refinancing in 3 and a half years’ time.
“Therefore, there is no guarantee of there ever being future fleet investment.”
Later in his statement, Deputy Morel signalled that DFDS Seaway’s original bid was a better choice for the island.
Deputy Morel says: “By any common sense reading of the two bids, [DFDS] is clearly the better of the two, promising more fleet investment, more quickly and with a more stable corporation, which is over 40% owned by a long-established charitable foundation for mariners.
“However, DFDS’ bid failed on a technical legal point, one which I could not personally fathom because the legal element was still to be negotiated but which I accepted.
“However, their elimination did not mean that I could easily jump to award to Condor Ferries for all of the reasons I have just stated.”
Deputy Morel also revealed that DFDS has named a fleet for their primary mobilised fleet based on part of what they own and what they can charter, and provided levels of charter for their start-up fleet that would not include Condor.
Deputy Raluca Kovacs asked the minister if he was confident whether they would have a ferry service by March 1st, to which the Minister said he was confident.
The statement received support from some States Members, with Deputy Jonathan Renouf saying it comes as a “huge relief” for islanders to be put in “clear and simple terms”.
Deputy Morel says: “We need to ensure financial sustainability of a 15-year contract and we need to ensure investment in vessels.
“We need to ensure our freight aims are met and that means delivering a flat rate card as required by the tender process – something which Condor has failed to deliver so far.
“We cannot be forced into a decision which we believe is wrong for Jersey and the joint process was on the cusp of delivering just that, a service that delivered uncertainty and risk for the islanders of Jersey.
“This new and fast process will allow us to make the right decision for Jersey’s future lifeline ferry services.”
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