Tuesday 04 April 2023
CONDOR and the States of Guernsey have concluded a 50/50 joint venture agreement for the purchase of an additional vessel which will significantly increase the resilience of the Island's lifeline sea links with the UK, France and Jersey.
The deal will see both parties investing £3m of equity in the joint venture to own the second 'ropax' ship - the Condor Islander - and receive a commercial return from the ferry operator. In addition, the States of Guernsey have made a loan from the bond of £26m, which will be repayable at a fixed rate of interest over 10 years.
John Napton, Condor's CEO, said:
'This is very good news for the Islands as it supports the three strands of the local economies - lifeline freight, connectivity for Islanders and inbound tourism - and is an important step in showing our long-term commitment to improving sea links.
'In addition, through this agreement the States will receive a financial return from us over the next decade, after which Islander will become fully co-owned by the joint venture.'
Following last month's announcement that Condor would be purchasing the vessel, which will increase the resilience and flexibility of Condor's fleet and therefore benefit the community, the Policy & Resources Committee became aware of significant challenges that meant the deal was unlikely to be completed as originally planned.
The Committee referred the matter to the Civil Contingencies Authority, which considered the potential risks to the island's supply chain before issuing a direction to the Policy & Resources Committee to take the necessary steps to secure the vessel, which is one of only a handful available worldwide suitable for the island's needs.
Deputy Peter Ferbrache, Chair of the Civil Contingencies Authority, said:
'I want to be as forthright and transparent with the community as possible so will provide as much clarity as I can while being conscious of the necessary restrictions in place for Civil Contingencies Authority deliberations.
'I can confirm that the CCA was convened on Thursday 23 March and Monday 27 March in order to consider a critical matter that was time-sensitive, and therefore required the use of the CCA's powers to ensure appropriate action was taken promptly to secure the purchase of the additional vessel recently announced by Condor, in order to mitigate potential critical risks to our supply chain.
'This is a commercially sensitive situation and we must respect that for all parties involved. However, the CCA's interest is in safeguarding critical supply lines for the long term benefit of the Bailiwick. We concluded that the purchase of this vessel at this time is essential and, after taking legal advice, satisfies the need to act to prevent a potential emergency occurring.
'The Authority therefore resolved to issue a direction to the Policy & Resources Committee to take the steps necessary to secure the vessel, working with Condor to do so.'
Deputy Mark Helyar, Vice President of the Policy & Resources Committee, said:
'As a result of the direction from the CCA, the committee decided to proceed urgently with a joint venture arrangement with Condor which will be self-financing, producing an investment return which will benefit Guernsey's public finances. The committee believes that the arrangements will help to enhance services and secure the Bailiwick's vital sea links for at least the next decade.'
The vessel, which is currently sailing in New Zealand, will position to Europe over the summer, enter dry dock and then undertake berthing trials in Guernsey and Jersey later this year prior to her entry into regular service in the Autumn.'
Mr Napton added:
'Islander is similar to Clipper so we plan to use her on the important supply route from Portsmouth, assist with inter-Island frequency and with the increase of fleet size, continue to develop freight services from France, which are showing growth and potential.'
Deputy Ferbrache added:
'The objective for the States of Guernsey remains to conclude a new operating agreement with Condor and the government of Jersey, and this has been the subject of numerous recent discussions with Jersey Ministers. The benefits in resilience brought by the purchase of the vessel will also be of benefit to our friends in Jersey, who we remain committed to working with on the enhancement of our long-term lifeline sea links.'
