P.K.

After the posts by Barrie Stevens I'm now wondering if the whole issue is too important to be left to the vagaries of the competitive market. Equally there is no way that Govt should be running transport services, so on paper at least the UA is a good idea. Unfortunately it seems to have given the wrong impression to the SP and their parent group i.e. that it's a commodity to be traded like any other.

Perhaps the Gov as a stakeholder is the best way forward? But it's all speculation until the SP makes it's move. Even though the scale of the lost turnover is difficult to get hold of I can't imagine the SP can just carry on as before. I guess we'll see...

That 1988 strike was amazing. Last time I can remember the IOM being at the front and center of the news.

What, in the US of A?

why not just put him on ignore if it annoys you that much?

Well exactly. It's like watching a crap tv program to the bitter end and then complaining how awful it was. Hello! Remote please... I've had that little spite-ball Tugger on "ignore" for years now and I don't miss his puerile little personal attacks one little bit. So to leave a forum you're clearly interested in without first putting someone on "ignore" sounds like flounce mode to me.

Anyway I thought that Mr Stevens has made some interesting points. He's certainly right about the Mezeron set-up in that who has any idea if they own, lease or whatever and owning your own craft does protect the service levels against changes in leasing costs.

Interesting times. Although no sign of any SP response yet.

Seems to be a growing consensus that the UA, fast ferries, freight costs vs passenger costs and the huge borrowing are the issues. Which is more or less what lots of people on the IOM have been saying for ages. So if Mezeron forces the issue then that should be for the good.

I was under the impression that the UA had a further 10 years to run? I'm also not so sure that forcing issues is necessarily a good thing.

It does have "social obligations" if you define those as CONTRACTUAL obligations to provide services it might not do by choice. Are those not the CONTRACTUAL restrictions on price increases and minimum number of sailing CONTRACTUAL obligations that it is required to do.

Fixed your post!

Folks aren't in business to massage a social conscience. They're in business to make as much money as they can...

The local physical market might be static and support two Mezeron ships on charter but will there always be continuity of supply on the chartering side if the market moves against you and you do not own your own tonnage like the Steampacket?

So Barrie, just how long is this piece of string I'm holding?

You can "what if?" these issues for ever. I understand that owning your carriers protects you from market forces moving chartering costs around. But, let's face it, the industry is on it's arse in the middle of a recession. Sure the UA ties them into infrastructure investment but they wouldn't have signed up to make a loss now would they? And those assets they have to invest in have a value so it's not as though they're having to throw money away now is it? So to me the only political decision Tynpotwald might have to make would be to amend the UA to get the SP's profit margins back up make it easier for the SP to provide a decent level of service.

I would still like to see the real SP £numbers. Not to crow about how much in the shit the SP might be but rather to see what they are likely to do next. But with a business rival chipping away at the old stone I would keep my powder well and truly dry as well!

Well Barrie, I guess it makes a change from bombarding that nice Richard Murphy!

There are two points I would like to draw your attention to. Three if you count your lack of paragraphs!

Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope.

The SP is a business. As such it has no "social obligations" and their fare structure and passenger "experience" serves to reinforce this. I suspect, because I do not know, that they were creaming it off from the freight and if passengers were a necessary evil in order to do this then so be it. I also can't see a "political decision" being required i.e. what do the worthies in Tynpotwald have to decide about? Exclusivity?

With the lack of market research from the SP I have conducted my own. Having consulted my missus I can conclude that passengers want a fast, frequent service that is as cheap as chips and feeds them into the UK transport infrastructure as seamlessly as possible. I would have consulted Robert H Goddard on this thorny and complex issue but alas he died in 1945.

In the meantime, two (is it?) container feeder ships have full employment - but for how long?

Well, essentially for ever! I should imagine the tonnage the island requires is pretty much static. Sure there will be seasonal peaks and troughs but these will be understood and manageable. So your business plan is pretty clear cut. Or rather it was if you are the SP. Mezeron will also have a very clear idea of the SP freight margins which I suspect will give them a great deal of room for manoeuvre.

Now they're caught with their pants down, arse on fire, and flapping about with their arms waving in a panic attempt to sort out a mess they should have seen coming. In German, we have a term for this: Nieten in Nadelstreifen.

In the UK we have a term for this as well: Fuck-Up.

My concern is that everywhere just at the moment there is a lot of panicky Hype. This includes some comments here as well as the comments from MW. Both can be characterised by their absence of fact and in MW's case by their attempt ot create fear without specificity.

My point exactly. It's all down to the £numbers of which to date I haven't seen any! Until then speculation is rife as they say.

There are some other interesting facets to this. For example, are Tesco and Shoprite now contractually bound to Mezeron? And if so for how long? After the SP have done their sums (presumably their activity right now) will they try and ride out the storm (sorry) with their current service levels? Or will they cut back in an attempt to stay profitable until they are in a position to win back their lost freight business? Of course, if they cut back on service levels do they then risk losing more freight to Mezeron?

The only knee-jerk reaction from the SP I have seen to date is a verbal one (I love that mangled MBA bollocks-speak but alas I can't claim the credit for a "verbal knee-jerk" - it originally came from a US colleague!) for which Mr Woodward now seems to realise probably wasn't his finest hour.

Interesting times.

Has anyone else noticed how much cheaper the goods on the shelves are at Tesco, Shoprite and all these other places?

 

Has that got anything to do with the question of whether or not passenger and vehicle services should be subsidised by containerised freight costs ? Or for that matter with the question of whether or not the entire SPCo model is possibly skewed by borrowing and profit taking ? Or for that matter with the question of whether or not the UA is basically the right way to go - as others in shipping have been asking for years ?

OK, I give up pongo, has it got anything to do with the question of whether or not passenger and vehicle services should be subsidised by containerised freight costs ?

It's quite an interesting scenario. Yeah, well, sometimes I'm a bit sad. As I've posted (probably a few times) before any service provider would want to maximise leverage, so don't expect any reduction in human baggage costs no matter who the agent is. Now with using Mezeron for freight will there be a price reduction in places like Tesco? Errr, no, I suspect not. Tesco point to sale costs UK-wide will be staggeringly high, even with the ubiquitous Eddie Stobart as carrier (apparently all their wagons have girl's names - I just can't believe that so many girls are called "SCANIA".) The profiteering SP tariff's will easily be hidden amongst that monster clutter. However no-one likes to be ripped off. So I suspect, because I do not know, that the shift to Mezeron for the non-perishables in particular will be a locally made decision. Tsk tsk Mr Woodward et al, you set your pricing OTT enough to make them look for a viable alternative - bad mistake methinks. So the Tesco store pricing will probably stay the same. Sorry and all that.

Sure it could be that Mezeron are loss-loading to buy market share with an eye on the main prize - but somehow I doubt it...

The real culprit here is the banks and debt financing of purchase and the over inflated value put on the company because it was perceived it had a monopoly under the UA

 

It used to be the case that you could not use the money and assets of a company to purchase its own shares, even to provide security.

 

That got changed and now, like the Glazers and MU and Gillete and LFC, any one who can persuade a bank to loan the money short term to buy the shares can then use the assets as security and re borrow the purchase money via the Company once they are in control so as to repay the original purchase loan, so the new owner does not owe the monmey but the purchased company does.

 

Another flawed Thatcherite deregulatory move, with potentially serious consequences when it goes wrong.

Hang on a minute here. Any loans Macquarie have taken out based on the profitability of operations like the SP have nothing whatever to do with the charge levels. As I posted previously they would have tried to leverage the maximum out of the service anyway, irrespective of any debts. And guess what? SO WOULD ANY OTHER SERVICE PROVIDER. The difference is that over-reaching makes you more vulnerable to market forces as you have to add the debt maintenance to the SAG.

With the loss of turnover the obvious thing to do is cut the number of crossings, and therefore costs, to match the amount of their remaining freight business. Thus maximising their profitability in line with the decrease in turnover. Unfortunately the debt maintenance stays a constant irrespective of the running costs - and that may be a burden that's too heavy to bear under the latest service levels. Mind you, where's the loan gone? It could be really raking it in elsewhere in the group thank you very much indeedy. And depending on their company structure it might be a better option for them to leave those who loaned the money left holding some not very valuable assets for their pains.

As ever, it's all down to the £numbers - which seem elusive...

I hope I do not appear arrogant and disdainful of anyone elses point of view because of that.Nothing could be further from the truth. Everyone is entitled to their opinion but that does include me as well. But some of the offensive language and aggressive tone have not really added to an informed debate on this forum.

Well I have to agree with you AJS. So many posts are about what would happen if the SP was priced out and ceased trading and the actions Tynwald could take to alleviate the situation and all the rest of it.

So please add to an informed debate to wit: clearly the SP have lost some business, which will hurt their bottom line. Now I've attended lots of pricing meetings but only to keep the Marketeers on Planet Earth. Everyone is in business to make a profit and they want to make the biggest profit they can. So Mr Woodward and his Merry Men (you included) will have estimated the highest leverage they think the (once captive) market will sustain. Now clearly the parameters have changed. I have noticed the missing SP subtext "We will have to take action because we are now getting less profit than we are used to, therefore we will try all sorts to return our business to the previous profit margin" and so on...

So my question to you how much profit margin have you lost and when does it turn negative i.e. not worth doing?

Believe me knowing those figures would really add to the "informed debate" you are so keen on...

PK - Condor don't sail from Portsmouth to Caen.

 

http://www.condorferries.co.uk/Media/Timetables.html

I know.

For two years running we have had summer hols in Brittany. Because of the competition on the routes you can get a good deal which basically comes down to you either driving further or sailing further. As per usual it ALL comes down to the £numbers...

Sorry I digress, kevster it's from Caen - Pompey

 

Is that with Brittany Ferries?

 

Or is it with their rival service - Condor?

 

What??? You mean that they allow two ferry companies to compete? Shh! Don't tell Mr Woodward or he'll be crying again.

The reason I asked the question is because I believe Condor is ultimately owned by - Macquairie!

Because from ballaughbiker's post it would seem that competition is just what a Macquairie operation needs...

alas and alack his business sector is currently in negative growth - for which he fairly and squarely carries the can.

The downturn in the fortunes of shipping is solely the fault of Mark Woodward? Or are you just an ill-informed, opinionated oaf who posts without thinking?

The reason his company is where it is today - sh1tting itself at the arrival of a competitor - is surely down to him isn't it? He should have been legislating for a day like this over the years and building alternative sources of business such as additional routes apart from solely Manx ones. But, I suppose that would have meant competition and he wouldn't have been up for that...

Sean South, try not to rise to Mr censorships rather low quality trolling. Censorship knows full well I meant Woodward's division in the diverse Macquairie group and not the shipping industry at large. He ignored that to to give himself a platform for a pathetic insulting personal attack as per usual. Low self-esteem would be my guess...

alas and alack his business sector is currently in negative growth - for which he fairly and squarely carries the can.

The downturn in the fortunes of shipping is solely the fault of Mark Woodward? Or are you just an ill-informed, opinionated oaf who posts without thinking?

Don't concern yourself Mr censorship. Your facetious comments ensure that your position will NEVER be usurped...

Sorry I digress, kevster it's from Caen - Pompey

Is that with Brittany Ferries?

Or is it with their rival service - Condor?

Be fair his job is on the line if SP goes under. Also it is not as if he is CEO of a public company and is employed to lead and set the company's vision and direction, or a company in which he has a majority stake and could do likewise. The company basically has one shareholder who will be dictating the tune that Woodward as CEO has to dance to. He may be wellish paid, I have no idea, but ultimatly he is probably little more than just an employee doing his employers bidding.

He will be very well paid. But alas and alack his business sector is currently in negative growth - for which he fairly and squarely carries the can. If I was Macquiarie I would want Mr Woodward in my office pronto to put them on a trowel and then explain what was going on and what he was doing about it.

Someone who comes across as a little less odious and who prefers not to threaten the non-freight customers who have nothing to to with this whole situation. I fail to see where he thinks he will get by frightening the ordinary Joe Soap...

It's all about leverage and that's what he thinks he will get with these scare tactics. He's not trying to disturb the equanimity of Joe Soap per se, he wants to send a very clear message to Tynwald that if they do nothing to "assist" the SP the service levels could fall away to the User Agreement minimum levels say. This will play on Joe Soap's insecurities and he, in turn, will put pressure on Tynwald as well.

I wonder if he's flying out to get his OZ connection for his beasting session? Or maybe he'll start out on one of his own puke-buckets to take advantage of that staff discount. Time will tell...

...subsidising the passenger business at a loss ...

How do you know they do that - because Mr Woodward says so perhaps?

They thought the linkspan meant a monopoly - wrong. I wonder how much Mezeron has hurt them? Anyone know the price differential and the size of the Mezeron traffic?

Real figures would be nice but not essential. UK -> France similar distances passenger fares seem to cost 40% - 50% less than the SP but they claim the critical mass argument. They can also only raise fares in line with inflation but such a shame the level is already so high.

Interesting times.

Situations like this are ALWAYS down to the numbers. And it may be that there simply isn't the business available to run two rival operations.

The IOMSP bottom line has been pretty healthy for some time otherwise there would be no investment. But I should imagine they will suddenly get very concerned about keeping their powder dry commercial confidentiality. I would be very interested in the IOMSP cost base vs freight and passenger revenue correlated to the User Agreement which I believe has clauses on minimum service levels?

However don't all cheer up at the thought of the SP getting their comeuppance. If it does get down and dirty it will be very messy with passenger service levels the only certain casualty.

It could have been worse, Spook, P.K. or even LDV could have chirped in.

Not touched a little nerve have I?

Oh good...

How very timely...

By giving retrospective authority Tynwald did not legally guarantee the repayment, it just bowed to the probable inevitable outcome of any court case to pay back and avoided large sums of legal fees and a ruined reputation. Practically of course that is the effect of what it did. Strangely it appears it did the decent thing, ie ensured that debts incurred by its nationalised electricity producer were honoured

Slow day today, so I've just found it in here.

To save wading through it:

"Based on legal advice, the auditors and the current Board are of the opinion that certain transactions contained within these accounts were unlawful, and, following the year end, the auditors presented a petition under the Audit Act 1983.

On 11 July 2007 a number of the alleged unlawful items were sanctioned by Tynwald, and the petition was subsequently withdrawn."

But I still can't find the document where the MCC and Barclays entered into the loans agreement. Strange. Although it was bang on year end.

Thanks Gladys but the MCC was already set up wasn't it?

Quite definitely if PC Venables is posting as such I think a sig should be the equivilent of his number on his lapel, a public display of his profession.

 

Sorry Chinanhand but despite having been in the Met I don't think I'll keep up with your insistence that you have to state your profession on here - it's a bit of a drag...[/font]

 

I am pretty certain no matter what your position in the MET PK you are not posting on here as a policeman.

Tongue in cheek Mr C, strictly tongue in cheek. That was over 20 years ago!

Just to say over guarantees and the power of MCC to take out loans the PKF report says the following:

 

2.36 As part of the approval process for both loans, Barclays obtained legal opinions from Cains

Advocates on the legality of the loans and also the provision of the guarantee by the MEA. These

opinions were addressed and solely provided to Barclays. The Cains opinion letters are complex

in their structure but conclude that there is no restriction on the ability of MCC to borrow either

under its articles or under the Isle of Man Companies Acts and that, provided that the facilities are

used for purposes that are within the MEA’s power, the provision of a guarantee by the MEA is

within its power. We understand that this advice was subsequently confirmed after the event, by

the Attorney General in written advice (of which we have not been provided a copy) to Treasury

dated 15th November 2004.

 

 

The guarantee letter to Barlcays is here - signed by good old Mr Proffitt!

The expression "well and truly kippered" springs to mind here.

The Select Committee on the MEA are scheduled to meet tomorrow. I wonder if this meeting is the Go/NoGo on their "Publish and be damned" issue? They've been at it quite a while now so I would have thought they can't be that far off their definitive report.

Interesting times. Wait and see mode...

Interesting. I wonder how long that's been in the public domain.

So the MEA (Tynwald) paid up on behalf of the MCC.