Jump to content
Manx Forums, Live Chat, Blogs & Classifieds for the Isle of Man
craggy_steve

Steam Packet to be sold

Recommended Posts

20 minutes ago, joeyconcrete said:

With three new faces, it will be interesting to see how the strategy shapes out.

"We need cheaper fares for our constituent grannies who've complained to us and won't vote for us next time. Sort it please"

  • Like 1

Share this post


Link to post
Share on other sites

This is Ramsay’s best contribution yet to his new political column. Sobering in the extreme when you see it laid bare like this. What a complete failure of the responsibilities of Tynwald.

http://www.iomtoday.co.im/article.cfm?id=45315&headline=Alistair Ramsay's column: The People's Packet - nice idea shame about the process&sectionIs=NEWS&searchyear=2019

 

 

Edited by Uhtred
  • Like 1

Share this post


Link to post
Share on other sites
34 minutes ago, Uhtred said:

This is Ramsay’s best contribution yet to his new political column. Sobering in the extreme when you see it laid bare like this. What a complete failure of the responsibilities of Tynwald.

http://www.iomtoday.co.im/article.cfm?id=45315&headline=Alistair Ramsay's column: The People's Packet - nice idea shame about the process&sectionIs=NEWS&searchyear=2019

 

 

Tynwald abdicated its responsibility in respect of the IoMSPCo when it allowed Gov't to enter into the User Agreement without an effective non-transferrability clause. We've probably paid about £80M over the odds on the purchase price to correct this error and a lot more in excessive fares over the past 25 years. Two wrongs don't make a right, but in this instance perhaps we can say that the latter failure at least mitigates the future impact of the original humongous cock-up. If someone in Comin had said "we've got to railroad this through or Tynwald will mess up again" they would probably have been correct, so on this rare (unique?) occasion I think we may be winners. Still a massive indictment of the naivety of Tynwald. My 2d.

  • Like 1

Share this post


Link to post
Share on other sites
1 hour ago, craggy_steve said:

Tynwald abdicated its responsibility in respect of the IoMSPCo when it allowed Gov't to enter into the User Agreement without an effective non-transferrability clause. We've probably paid about £80M over the odds on the purchase price to correct this error and a lot more in excessive fares over the past 25 years. Two wrongs don't make a right, but in this instance perhaps we can say that the latter failure at least mitigates the future impact of the original humongous cock-up. If someone in Comin had said "we've got to railroad this through or Tynwald will mess up again" they would probably have been correct, so on this rare (unique?) occasion I think we may be winners. Still a massive indictment of the naivety of Tynwald. My 2d.

I think the first part of your analysis is incorrect and ignores the facts, and history.

For years Tynwald and and IoM Government  have hated the Steam Packet, and even although they built up a strategic stake of 20%+ by the 1970’s they didn’t know what to do with it, apart from appointing Walter Gilbey to the board.

Yes, responsibility was abdicated, in the 1950’s when there was no investment in Harbour infrastructure to install link spans.

Yes responsibility was abdicated in the 1970’s when the Harbour Board led by Roy McDonald, so stoked with anti steam Packet sentiment, built facilities specifically favouring an under funded Manx Line which was inevitably going to fail.

That failure led to the Steam Packet being hours away from bankruptcy, not being able to pay its debts as they fell due, and a shot gun marriage, reverse takeover, by Sea Containers, Manx Line having had several owners, in the 8 years since it was founded.

The user agreement was, in my view, the question of ownership change aside, an assumption of responsibility, and one that has been a success, in the main, for nearly 30 years.

But it is true that Tynwald did abdicate responsibility in another way. It removed the long standing prohibition on the assets of companies being used by purchasers to buy its own shares. That allowed McQuarrie to buy cheap, leveraged, then pile the debt into the Steam Packet, then to sell it on, as an infrastructure asset, to an investment fund, to which it loaned the purchase price. The company couldn’t afford to service the debt. The very sort of thing the prohibition was aimed at preventing.

Ive never understood why the last Steam Packet offer on the user agreement was rejected, other than suspicion and hatred of the Steam Packet, laced with xenophobia that it was owned by a Portuguese bank, into whose hands it had fallen when loans were defaulted.

I suspect any new user agreement won’t look very different. However the Steam Packet is owned, financed, managed, going forward, and no decisions have been made, and there are many options, selling some shares to the public, transferring shares to an IoM Government Sovereign Wealth fund, bringing in managers, a franchisee, using the CalMac model of operation, or getting new tonnage built by someone like Stena, and then leasing (Brittany Ferries are doing that and there’s a new CalMac ferry being built that way ).

The truth is Spirito Santo wanted shut. They were fed up of th hostility from the Island. So they gave a short window of opportunity, take it or leave it, and CoMin had to act. Can you imagine the total abdication there would have been if CoMin had let Tynwald take charge. Spirito would have just off loaded. At almost any price.

And to the extent that Alastair ignores the history and background, which he does completely, his analysis is deeply flawed. In fact I’d go so far as to say it’s polemic.

It accuses lack of transparency. That’s a favourite theme nowadays, but it encourages a lack of decision taking and responsibility in a representative democracy. It confuses the role of the executive, the legislature, and the administrative branches of government.

That ignoring, along with reliance on populist referenda, has resulted in the U.K. getting itself into the current mess over Europe, and it’s a mess whether you support remain or Brexit, and the mess in the USA with its constitutionally induced political paralysis. 

Its where IoM is heading, with trying to make MLC’s being positioned as opposition and scrutineers, rather than full members of Tynwald, where we get by having all Tynwald members on the CoMin payroll.

We end up with distrust, endless navel gazing, rehashing.

The decision to purchase has been taken, endorsed, and completed. I’d rather Alastair wrote aboout the options to take it forward, successfully, without political interference, at arms length providing a reliable, successful, profitable, convenient all year round service for freight and passengers, both resident and visitors.

  • Like 3
  • Thanks 1

Share this post


Link to post
Share on other sites
22 minutes ago, John Wright said:

I think the first part of your analysis is incorrect and ignores the facts, and history.

For years Tynwald and and IoM Government  have hated the Steam Packet, and even although they built up a strategic stake of 20%+ by the 1970’s they didn’t know what to do with it, apart from appointing Walter Gilbey to the board.

Yes, responsibility was abdicated, in the 1950’s when there was no investment in Harbour infrastructure to install link spans.

Yes responsibility was abdicated in the 1970’s when the Harbour Board led by Roy McDonald, so stoked with anti steam Packet sentiment, built facilities specifically favouring an under funded Manx Line which was inevitably going to fail.

That failure led to the Steam Packet being hours away from bankruptcy, not being able to pay its debts as they fell due, and a shot gun marriage, reverse takeover, by Sea Containers, Manx Line having had several owners, in the 8 years since it was founded.

The user agreement was, in my view, the question of ownership change aside, an assumption of responsibility, and one that has been a success, in the main, for nearly 30 years.

But it is true that Tynwald did abdicate responsibility in another way. It removed the long standing prohibition on the assets of companies being used by purchasers to buy its own shares. That allowed McQuarrie to buy cheap, leveraged, then pile the debt into the Steam Packet, then to sell it on, as an infrastructure asset, to an investment fund, to which it loaned the purchase price. The company couldn’t afford to service the debt. The very sort of thing the prohibition was aimed at preventing.

Ive never understood why the last Steam Packet offer on the user agreement was rejected, other than suspicion and hatred of the Steam Packet, laced with xenophobia that it was owned by a Portuguese bank, into whose hands it had fallen when loans were defaulted.

I suspect any new user agreement won’t look very different. However the Steam Packet is owned, financed, managed, going forward, and no decisions have been made, and there are many options, selling some shares to the public, transferring shares to an IoM Government Sovereign Wealth fund, bringing in managers, a franchisee, using the CalMac model of operation, or getting new tonnage built by someone like Stena, and then leasing (Brittany Ferries are doing that and there’s a new CalMac ferry being built that way ).

The truth is Spirito Santo wanted shut. They were fed up of th hostility from the Island. So they gave a short window of opportunity, take it or leave it, and CoMin had to act. Can you imagine the total abdication there would have been if CoMin had let Tynwald take charge. Spirito would have just off loaded. At almost any price.

And to the extent that Alastair ignores the history and background, which he does completely, his analysis is deeply flawed. In fact I’d go so far as to say it’s polemic.

It accuses lack of transparency. That’s a favourite theme nowadays, but it encourages a lack of decision taking and responsibility in a representative democracy. It confuses the role of the executive, the legislature, and the administrative branches of government.

That ignoring, along with reliance on populist referenda, has resulted in the U.K. getting itself into the current mess over Europe, and it’s a mess whether you support remain or Brexit, and the mess in the USA with its constitutionally induced political paralysis. 

Its where IoM is heading, with trying to make MLC’s being positioned as opposition and scrutineers, rather than full members of Tynwald, where we get by having all Tynwald members on the CoMin payroll.

We end up with distrust, endless navel gazing, rehashing.

The decision to purchase has been taken, endorsed, and completed. I’d rather Alastair wrote aboout the options to take it forward, successfully, without political interference, at arms length providing a reliable, successful, profitable, convenient all year round service for freight and passengers, both resident and visitors.

Seconded.

  • Like 1

Share this post


Link to post
Share on other sites

Is Mr Ramsay perhaps suggesting that IOMG ignored it's own scrutiny policy?

Share this post


Link to post
Share on other sites
4 minutes ago, Donald Trumps said:

Is Mr Ramsay perhaps suggesting that IOMG ignored it's own scrutiny policy?

Desperate times require desperate measures...?

  • Like 1

Share this post


Link to post
Share on other sites

Political commentator Alistair Ramsay:-

" policy choice that led to government buying the Steam Packet was never debated in Tynwald. "

Share this post


Link to post
Share on other sites

This why we need to have the approved position of Auditor General actually appointed

CoMin should not be permitted to commit such substantial amounts of taxpayers funds without Tynwald debate

Share this post


Link to post
Share on other sites
41 minutes ago, Donald Trumps said:

This why we need to have the approved position of Auditor General actually appointed

CoMin should not be permitted to commit such substantial amounts of taxpayers funds without Tynwald debate

Auditors only work in retrospect, looking back. How would that sort it. 

Sometimes policy has to be determined on the hoof by the executive.

Didnt Tynwald approve the purchase going ahead, with a short debate and a vote?

Share this post


Link to post
Share on other sites
53 minutes ago, Donald Trumps said:

Is Mr Ramsay perhaps suggesting that IOMG ignored it's own scrutiny policy?

What is it’s scrutiny policy? I thought policy setting was looking forward to future events and scrutiny looking back at what has already been done.

Youve never thought about buying the Steam Packet, it’s not for sale, you get an offer out of the blue, open for only a few days or weeks, it really is commercially confidential, word gets out, deal off, what do you do?

Share this post


Link to post
Share on other sites

They've had it pretty easy so far. Wait for something to go wrong and sit back and watch the kick off.

  • Like 2
  • Haha 1

Share this post


Link to post
Share on other sites
1 hour ago, John Wright said:

I think the first part of your analysis is incorrect and ignores the facts, and history.

 

 

Thank you for your perspective John, and your knowledge of the history is much deeper and longer than mine. 

The fact remains that irrespective of leveraging an entity's own assets to fund the purchase of its shares, the UA as a contract created instant value for the IoMSPCo, a significant proportion of its forward income, the moment it was signed. All it then needed was an accountant savvy enough to securitise or capitalise that forward income in a value model which financiers and speculators could trust. That then became a previously un(der)-recognised asset which significantly inflated the "value" of the IoMSPCo. Tynwald and IoMG gave that value to this company which you say Tynwald and IoMG hated, but failed to put in constraints which prevented that value from being exploited by speculators, irrespective of how they raised the money to buy the company. It's really little different to valuing and buying or selling a book of long-term insurance or rental contracts, except that the associated forward value of the UA was created at a stroke by IoMG without apparently being conscious of that consequence, which is why I say that IoMG was negligent in agreeing the UA without including effective non-transfer protections. Irrespective of all which went before, giving the IoMSPCo a long-term UA "monopoly" without transfer protection was an open invitation to the speculation which followed.

All that removing the restriction on leveraging assets to purchase own shares did was to reduce the capital McQuarrie needed to invest, but having been involved in similar deals in the past I think someone would have done the deal even if McQuarrie didn't have the appetite or funds.

  • Like 4

Share this post


Link to post
Share on other sites
On 2/2/2019 at 10:27 AM, craggy_steve said:

Still a massive indictment of the naivety of Tynwald.

Quite. And a further stark demonstration of the lack of political aptitude and quality on this Island. Not that such a demonstration was required.

  • Like 1

Share this post


Link to post
Share on other sites

I really think that its Ramsey who is being naive here.  Clearly COMIN had secured a majority in favour of this and must have been confident of enough political support to take it forward.  There was obviously going to be little chance for a long protracted debate - why would the sellers sign up for that ??  They must have been pretty nervous of what was going to happen in a Tynwald debate in any case.  I agree with Mr Wright - Ramsey would have been far better exploring the future rather than trying (and failing) to cause a negative reaction.

 

  • Like 1

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...