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Steam Packet Warns Of Disruption To Sailings

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2 hours ago, the stinking enigma said:

We should at least get the chance to name these ferries. I go for the ss stealth tax and the ss gravy train.

Given John's proposed schedule, sure the only choices are In the Morning and Not in the Morning.

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10 hours ago, asitis said:

Agreed, but here's the rub... Government were content for years to watch the SPCO make huge profits and suppress a report into the way it made those huge profits ! My axe to grind is the shortsightedness of the costs of the populace getting on and off and the cost of visitors and freight ! The freight costs affect every aspect of our life here, and make a 'hostile' environment in which on island business operates. Government has painted itself into a corner financially, where despite its purchase of the Packet it cannot really use the service in a way beneficial to the islands vibrancy and visitor economy as it so badly needs the profit ! coupled of course with needing new hardware to boot!

People can bang on about how reasonable the service is, but the reality is, for an awful lot of people to get on and off with a family as often as they would perhaps like is just not affordable and the price jacking around island events particularly TT is a joke !  

Sadly Government are not able to do like Scotland and really put the island on the map !

 

But there weren’t big profits as such. There were huge overheads because 25 years ago IoMG relaxed the rule that you couldn’t use a company’s assets to purchase the company.

So when McQuarrie bought IoMSPCo ( at and inflated price - as an infrastructure asset ) originally it borrowed ( possibly from itself ),  Then it switched all the debt into the company and asset stripped. Net result the purchase cost nothing,  but the company, rather than the shareholder ( a McQuarrie managed investment fund ) ended up owing a fortune, more than its assets  were worth, in exchange for nothing. Net result it cost the investment fund, nothing and McQuarrie had a performing loan. Steam Packet had a mountain of debt.

Then McQuarrie sold to another fund ( managed by McQuarrie ) and the borrowing was transferred to the Portuguese bank. Then came the 2008 crash. The bank was bust. The payments weren’t being met. Security was on the shares, so the bank took ownership of the shares.

So for a long time the Steam Packet had good operating profits but was paying off a mountain of debt it hadn’t entered into for its own business purposes. That was restructured and it was making inroads, but it was never awash with cash.

Result - no reserves for new tonnage. 
 

This illustrates the unintended consequences of “ monetising “.  ( allowing a value to be allocated to ) the user agreement, and removing the restriction on companies assisting the purchase of their own shares.

At least the new sea services agreement won’t be monetised, the balance  of the refinanced external debt from the McQuarrie sales and purchases will be gone by 2026. There’ll be a new set of ship building loans, loans incurred to purchase assets used in the business. They’ll need to be repaid.

What I’m saying is that high fares are, in part, a direct result of corporate greed, McQuarrie, and IOMG allowing monetisation of the user agreement and allowing the Steam Packet to be saddled with debt.

History is fine. Maybe lessons will be leaned. Hopefully government share ownership will stop the debt for nothing issue arising again.

But there’s no scope for fare cuts until the balance of the  existing loans from this saga are finally repaid in 2026 and we know how much the new boats are going to cost.

I’m not defending the Steam Packet  I’m just trying to explain how we got where we are, and why reduced fares were never going to be possible, even in the short - medium - term, ( they weren’t promised ),  because this was/is primarily about ensuring the future of  the island life line.

There won’t be money for dividends to contribute to civil service pensions. And under the new agreement fares are regulated  anyway. They can’t be put up willy nilly.

The only way we can get cheaper fares is by Government subsidy. Tax payer pays. You only have to look at what that costs Scotland with CalMac (£140 million a year in 2017 and a £100 million cost overrun on the purchase of the two latest boats running 2 and 3 years late) or States of Guernsey with Aurigny ( £7.6 million a year in 2018/9 ).

edited to update subsidy figures.

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23 minutes ago, John Wright said:

 

I’m not defending te Steam Packet  I’m just trying to explain how we got where we are, and why reduced fares were never going to be possible, even in the short term, ( they weren’t promised ),  because this was/is primarily about ensuring the future of  the island life line.

That's the thing, I don't understand how it entered anyone's brain that the fares were instantly going to drop. 

As you say, nobody promised reduced fares - it seems to have emerged when people started tweeting bollocks about 'the people's ferry' - Corbynomics in action! At least the wifi would be free! 

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5 hours ago, the stinking enigma said:

We should at least get the chance to name these ferries. I go for the ss stealth tax and the ss gravy train.

mv. Goldmine. mv. Deep Pockets. mv. Govt. Choice. mv. Last ditch. mv. Resident's Dilemma. mv. Pension. mv. Rip Off. mv. Pension Chest. mv. Profit Motive.

Stupid, but there ya go. I'll go back to sleep now!

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2 hours ago, John Wright said:

But there weren’t big profits as such. There were huge overheads because 25 years ago IoMG relaxed the rule that you couldn’t use a company’s assets to purchase the company.

So when McQuarrie bought IoMSPCo ( at and inflated price - as an infrastructure asset ) originally it borrowed ( possibly from itself ),  Then it switched all the debt into the company and asset stripped. Net result the purchase cost nothing,  but the company, rather than the shareholder ( a McQuarrie managed investment fund ) ended up owing a fortune, more than its assets  were worth, in exchange for nothing. Net result it cost the investment fund, nothing and McQuarrie had a performing loan. Steam Packet had a mountain of debt.

Then McQuarrie sold to another fund ( managed by McQuarrie ) and the borrowing was transferred to the Portuguese bank. Then came the 2008 crash. The bank was bust. The payments weren’t being met. Security was on the shares, so the bank took ownership of the shares.

So for a long time the Steam Packet had good operating profits but was paying off a mountain of debt it hadn’t entered into for its own business purposes. That was restructured and it was making inroads, but it was never awash with cash.

Result - no reserves for new tonnage. 
 

This illustrates the unintended consequences of “ monetising “.  ( allowing a value to be allocated to ) the user agreement, and removing the restriction on companies assisting the purchase of their own shares.

At least the new sea services agreement won’t be monetised, the balance  of the refinanced external debt from the McQuarrie sales and purchases will be gone by 2026. There’ll be a new set of ship building loans, loans incurred to purchase assets used in the business. They’ll need to be repaid.

What I’m saying is that high fares are, in part, a direct result of corporate greed, McQuarrie, and IOMG allowing monetisation of the user agreement and allowing the Steam Packet to be saddled with debt.

History is fine. Maybe lessons will be leaned. Hopefully government share ownership will stop the debt for nothing issue arising again.

But there’s no scope for fare cuts until the balance of the  existing loans from this saga are finally repaid in 2026 and we know how much the new boats are going to cost.

I’m not defending the Steam Packet  I’m just trying to explain how we got where we are, and why reduced fares were never going to be possible, even in the short - medium - term, ( they weren’t promised ),  because this was/is primarily about ensuring the future of  the island life line.

There won’t be money for dividends to contribute to civil service pensions. And under the new agreement fares are regulated  anyway. They can’t be put up willy nilly.

The only way we can get cheaper fares is by Government subsidy. Tax payer pays. You only have to look at what that costs Scotland with CalMac (£160 million a year) or States of Guernsey with Aurigny ( £4 million a year ).

When you set it out like that John it looks more and more as though Govt had backed themselves into a corner during the later rounds of User Agreement negotiations and/or had left themselves little or no choice other than to buy out the Steamie? Which might explain the price paid too?

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3 minutes ago, Non-Believer said:

When you set it out like that John it looks more and more as though Govt had backed themselves into a corner during the later rounds of User Agreement negotiations and/or had left themselves little or no choice other than to buy out the Steamie? Which might explain the price paid too?

That all happened before the negotiations of the last  4 years. Tactical errors in changing company law, not having a clause in the original user agreement to prevent a value being attached to it in any sale.

Price was pretty good, really. Assets at value and 7 years purchase of profits. More or less.

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Government will not be taking dividends from the Steam Packet, MOPR tells us

Everything will be reinvested in the company

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1 hour ago, Donald Trumps said:

Government will not be taking dividends from the Steam Packet, MOPR tells us

Everything will be reinvested in the company

Well, say the borrowing is £125,000,000, at 3%APR, over 25 years, that’s £7.2 million a year blown. Add the Liverpool terminal at £40 million and its another £2.3 million.

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Windy tonight. Not surprised there's no boat.

 

 

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I always resort to sucking a Fisherman's Friend in weather like that...

Edited by quilp
One for you there Sultan...
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Certainly way off track. Presumably heading into the wind to then run up the coast?

00164D15-E84B-425A-97F5-3958169E1F04.png

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