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Brexit ferry contract worth £13.8 million ‘awarded to company with no ships’

Oh yeah, this should all be fine, I mean, the company hasn't really managed to achieve anything in 2 years but 3 months is plenty of time for them to perfect this scheme.....

https://www.itv.com/news/2018-12-30/brexit-ferry-contract-awarded-to-company-with-no-ships/

The EU has adopted a unilateral measure that would allow road transport to continue for 9 months after 30 March. It'll come into force if the UK reciprocates. 

What do you bet there will be a constituency to say 'f*ck 'em, if we're going we're going, let's not even take the 9 months' .

This actually makes sense. Seaborne Freight were already in the process of setting up a route from Ramsgate to Ostend and it obviously makes sense to push some traffic through a different route if Dover-Calais is going to be suffering delays. The CEO is ex Brittany Ferries and the company that came out of SeaFrance. It's not like they don't know how to run a ferry service. The contract for this service is pretty small anyway. The other 2 contracts were 4 times the size each.

Of course, the twitter goons are quick to parrot the headline without question.

yeah fair enough goose

except the last ferry operator in Ramsgate went bust crica 2013, berths are small and there are few spare ferries that can use them

and then this co has been planning to set up the route for 2 years but hasn't got it off the ground yet

of course, this company could be cover for HMG to activate its options over the Sea Lift ships it has on call if it needs military transport capacity and will just hand them over I suppose

Indeed, create a monumental clusterfvck and then take credit for using government money to pay British firms to mitigate it (albeit firms without the wherewithal to do so).   Nice.

They won't be paying money to firms without the wherewithal. The article clearly states that they only get paid if they deliver a service. 

The other 2 firms contracted were French and Danish.

You miss my point Goose, the whole point of this is emergency mitigation, as things stand the company who won the contract doesn't have any ships - yes if they don't acquire them they wont get paid but that is very far from the point.  They are relying on promises for an emergency back up for an event that could happen in less than 3 months time.   It is ridiculous. 

It isn't ridiculous though, is it.

The idea is to route transport through other ports than Dover-Calais. There are very few options and Ramsgate is one of the only ones. There are no other operators operating out of Ramsgate, so who should they be awarding it to instead? This contract is small compared to the 2 main contracts awarded to the other 2 firms. It isn't like everything is riding on this one firm. Does it really take long to lease ships anyway? How do you know where they are in those negotiations? 

From what I've gleaned talking to a ship broker I know there is a global glut of ships and especially older tankers and the like so really shouldn't be hard to charter a couple of ships capable of carrying lorries.  I'd say the bigger issue is likely to be finding that as the ramps and the like at Ramsgate haven't been used for a while they've seized up and need major repairs.

"There are no other operators operating out of Ramsgate, so who should they be awarding it to instead? "

I would suggest a company that owns some ferries or at least a company that has some track record of running ferries. 

"Out of the no other companies, which ones fulfil those criteria?"

 

sorry goose, I don't follow, there are presumably many companies that have a track record of running ferries and currently have access to them - what is your point?

 

 

Looks like a fair analysis, cookie. Shows that a lot of the arguments above are spurious (e.g. They've got no ships! This entity has no track record!).

His scepticism re dd with Grayling at the helm is also fair, though.

As well as Ramsgate not having the port infrastructure for a sudden large influx of ferries/goods/lorries, I am not familiar with the local area, but what are the roads like?  Shite for lorries, I bet.

Not to mention that the M26 will be closed for use as a lorry park (with no facilities for drivers or vehicles). 

To say that these arrangements are suitable contingency plans is a joke.

The point, Guy, is that Ramsgate is not a fully operating port and this one company are the only ones who have made any moves to get it off the ground (e.g. dredging starts this week). If any other company wants the work, they would have to start from scratch, which given the time constraints is unrealistic.

Kimmy, you are writing as if the idea is for this contract to be the sole contingency on which everything rests. It clearly isn't. It is just a small amount of additional capacity.

"The point, Guy, is that Ramsgate is not a fully operating port and this one company are the only ones who have made any moves to get it off the ground (e.g. dredging starts this week). "

 

So this gets better and better, now not only does the company not have any ferries and no track record of operating, the proposed port is not operational and hasn't even been dredged yet and you are continuing to advocate a no deal withdrawal in less than three months if necessary?  Unfvckingbelievable.

A small point but does anyone know if there's an actual existing ferry operator with spare ships?  As far as I'm aware it's years since any of the cross-Channel operators built or launched a new ferry and assume that they've been simply not replacing ferries that have reached the end of their lives and don't have a couple of spare ones tied up waiting to be brought into use.  On that basis they'll also need to go out and charter something if they bid for the contract.

If the people running the company are suitably experienced, the need is there and the alternative options are lacking and if sufficient diligence is done and payment is not made up front. Errr, yeah, absolutely. 

Ray as per my post above I doubt Stena are any more capable of running it as they have no spare crews or ships.  If they thought it was viable they would probably have done something about it as they have a much better balance sheet and negotiating position with charterers and ship builders than a start up but they haven't.

From what I've ready the company is question is run by a group who all have experience of senior management within ferry companies running similar routes so it's not like we've just given it to a company that Stobart has set up on the basis that they've used a few ferries in their time.

"and you are continuing to advocate a no deal withdrawal in less than three months if necessary?"

Am I? Where did I do that then?

What I am doing is saying that, if a no deal happens, the options for additional shipping outside of Dover-Calais are limited and, in that context, a contract opening a new route from Ramsgate is not that unreasonable, despite the difficulties, and superficial complaints that a company owns no ships and has no track record are not necessarily the deal-killers that the twitter crowd think (ironically, it is the twitter link that cookie posted that backs up my point there).

Your alternative is what? "Cancel Brexit!!". Yeah, we know that already but it is not very practical to keep shouting that up until 29 March without doing anything else. "Give it to a well established company". I've described what the limitations are there. Clearly the plan is for most of the additional shipping to come from Brittany Ferries and DFDS through Portsmouth and Plymouth but I would have thought it was obvious why it would be worth taking a punt on Ramsgate in the circumstances, given its greater proximity to the Continent.

Ray, I am not a procurement lawyer or a Tory, so you can raise your jaw and cease your astonishment.

Guy, I am not advocating any particular course of action. I genuinely don't know which option I prefer from where we are right now. A second referendum has much to recommend it (as long as it contains all three options of Remain, No Deal and May's Deal in a fair format). The follow up question of which option I would vote for is not clear either. Personally, I would have advocated putting no deal planning on a stronger footing from delivery of the Art 50 Notice. It's no use trying to cobble it together at the last minute. Unfortunately Hammond seems to have prevented that from being possible.

Ray turning to your questions:

1. They are in a more favourable position and so obviously so far have not considered the route from Ramsgate to be viable even with their advantages.  However, there may also be internal reasons why they don't think they can do it such as lack of cashflow or the like so they may be totally unable to provide the proposed service.

2. Well they've had plenty of years to talk to the port of Ramsgate and set up a route if they thought they could make it work.  I was talking more generally rather than in relation to the specific circumstances of increasing cross-Channel capacity in an emergency.

3.  The challenges in running any kind of ferry company are going to be similar in terms of logistics of having ships and crews in the right location, etc. so yes they'll certainly have relevant transferable experience and skills.  We're not talking about the former logistics manage from Stena deciding to buy a 15 foot boat and set up tourist ferry across the Hamble which is clearly a different market and sector.

I know nothing about procurement law and would not object to Corbyn doing something similar in a similar emergency.  I would simply object to him just deciding under normal circumstances to fully subsidise a random new ferry route for which there had been no apparent demand.

We all know that all governments are terrible at obtaining the necessary specialist advice about the value of contracts so no reason why this should be any different.  The main issue with PFI was government departments agreeing rents and returns on investment that would never be agreed to by any other property occupying business.

Ray are you a lawyer as you seem to struggle with some basic business concepts?  Merely being offered £12m may not be enough for a competitor to start a route as there will be an upfront cost before you get any revenue and Stena for example maybe already be totally leveraged and unable to find funds for the initial costs.  Different businesses have different funding costs and target returns so what makes sense to one may not make sense to another.  Quite possible that even if it had been advertised there might have been no other takers for all manner of reasons that we wouldn't be privy to.

Market forces are generally good for ensuring an efficient allocation of resources but not in an emergency.  You are familiar with the concept of public goods that will not be provided by the market and how lots of us accept that that is entirely justifiable and correct?

Yes the Times this morning reports that the contract was awarded on the basis that the company is already involved in negotiations with ship owners and with the ports and with potential crews which means they have a head start over any other entity wanting to set up a service from scratch in the available time.

Just looking at the T&Cs on Seaborne's website, now, I accept that I am not a nautical lawyer, but these read as very "copied from justeat" to me

 

It is the responsibility of the customer to ensure delivery address details are correct and detailed enough for the delivery driver to locate the address in adequate time. You must always provide a valid contact number and email when ordering online. Please provide additional delivery instructions in the relevant section on our checkout page. In the event that your address cannot be found, undelivered orders will be chargeable.  

Please make sure the email address you provide is correct and your mailbox is in proper working order, as all correspondence regarding your order is sent to this address.  

Users are prohibited from making false orders through our website. The use of cookies are used to monitor I.P. addresses as stated in our privacy policy in order to blacklist any computers which Seaborne Freight (UK) Limited suspects of being used to commit false delivery requests. Seaborne Freight (UK) Limited reserves the right to seek compensation through legal action for any losses incurred as the result of hoax delivery requests and will prosecute to the full extent of the law. Seaborne Freight (UK) Limited  accepts no liability for damages or losses incurred by the use or inability to use this or any affiliated website

https://seabornefreight.com/terms

So yeah, I'm sure everything will be fine, I mean, Chris Grayling is in charge of it..... 

Sumo those terms would make sense if they were offering a service whereby you gave them your trailer to ship and they'd arrange for it to be offloaded and taken to a destination at the other end.  Something similar happens with supermarket deliveries to the Isle of Wight where the tractor units are taken off before they are loaded onto the ferry and don't make the journey on the ferry.

Interesting point about the start up aspect is that even big operators like Brittany only have ten ferries and these guys are planning to run four so the business won't actually be that much smaller in terms of staffing, etc. than the big ferry companies the founders have come from.

So pointing out there may be genuine business reasons why an existing operator may not be interested = trolling.  In that case I must be trolling my clients when I point out reasons why they might not want to do something.

And as I've pointed out it's also quite simple that because of the circumstances there could have been no other bids due barriers to entry, etc. even if there was time for a full tender process.

I assume that at least the other companies who have been awarded contracts would have asked in their initial meetings what other possible contracts were available and will have considered it.  It's also a small industry so no doubt there would have been rumours circulating that others could have acted on.

but then sails

what you're saying really is that nobody else could have wanted to run a route Ramsgate to wherever the fook in franc/belgium 

which kinda suggests it's not commercially viable 

It suggests it's not commercially viable for other existing companies due to numerous possible factors which could be anything from perceived lack of demand to lack of finance to spend time and money on the upfront investment that's needed before you have paying customers.

Certainly here I'd say it would be impossible for anyone else to set up a competing service in the time available given the need to find and lease ships, recruit and train crew, negotiate use of the relevant berths, etc.  It's not something you can just set up overnight and Seaborne have clearly invested time and effort already which leaves them way ahead of any competition.  Are we suggesting that if one company which is new can show it has nearly concluded agreements with the ports and ship owners and is underway recruiting staff we should ignore them and give the contract to someone else who has experience but none of the groundwork in place just because they have agreed a lower price?

it has nearly concluded agreements with the ports and ship owners and is underway recruiting staff 

_____________________________________________________

is "nearly concluded" the same as "hasn't" here?

I'm not saying don't give Uber4ships a crack of the whip

I'm more saying its a bit of a risky strategy to base who gets fed and who starves (although let's be honest none of the fat fooks in Kent are going to starve any time soon) on a shell co that might be able to produce a non binding letter of comfort from Ramsgate port authority and a read reciept from an email to Sumo's Ship and Burger Van leasing limited as evidence of it's soundness to get 14 M GBP of taxpayer cash

I've got no idea if they've got a fully signed and sealed lease of the birth in Ramsgate but they're certainly a damn sight closer to that than anyone else out there seems to be.  They only get the cash if they provide the service so if they can't get things sorted they can't get nothing.  Seems less risky than giving it to a company that has nothing in place and is starting from scratch today.

If I needed to get my car repaired in the back end of beyond and the only choice was between the garage that's part of the way through fitting out and has employed staff and expects to be open next week and the garage company that's just started looking for premises I know who I'd choose.

If there is no other garage in the area I'd clearly pay the extra rather than waiting a year with a broken car while Kwik Fit find a site, get planning, build and staff their garage.  You're still missing my point which is that if you need your car to be running soon then you'll take it to the nearly finished garage rather than waiting.  If for some reason they haven't started work on it by the time Kwik Fit is finished you can move it without having to pay the original garage anything.

Ray that just ignores reality as you can't make the planning system go faster just because you're a big company with more resources.  Same way that if someone has already paid a deposit to charter a ferry you can't come along and then just give the charterer more money to induce them to breach their contract with the first company.

My contract with the garage is to repair my car with payment on completion of the repairs.  If they haven't started the work within a reasonable period then they have failed to perform their part of the contract and I can take my car away and will not be liable to pay them for work that hasn't been done. 

To be fair Guy their business is also delivering stuff from A to B and suspect that some trainee at a big firm law firm probably grabbed a precedent and forgot to delete the bit about delivery addresses.

do hope they paid a lot of money to a very expensive law firm for the copied over takeaway delivery co. t&c - someone will be very cross and someone very embarrassed. maybe whoever put them together was too busy roffing to do the job properly. 

summersails your astonishing complacency about brexit generally, and especially about the impact of a no deal brexit (including your frankly insane idea that a no deal brexit provides more business certainty than delaying brexit to get a deal/changing our mind) is symptomatic of total idiocy gripping a large minority in this country that could see us economically decimated in very short order.

Well it's true that any delay simply continues the current uncertainty which means companies hold off on investment decisions,etc.  I've acknowledged that no deal is a crap idea but at least we'd finally know what we're dealing with and people could plan accordingly rather than constantly trying to kick the can down the road but at the same time trying to avoid being taken by surprise by the option you least hoped would happen.  Anything is survivable if you know what you are dealing with.

As for the ferry deal it's definitely looking sketchier this morning now it turns out one of them has done the classic wind the business up when HMRC come knocking for their money.

Sails, no deal means we DONT know what we are dealing with - it is by its very nature chaotic and will require a vast patchwork of side agreement that are unknown and currently unknowable it will take years to reach an equilibrium.  

Your idea that no deal is somehow a determined outcome and everyone can just get on with their lives is bonkers - no deal will mean Brexit dominates the headlines for years to come and the brexit crisis and all the uncertainty that goes with it will become in built part of british life for years if not decades

Yes just like the global financial crisis led to chaos for several years and not knowing what we were dealing with and a few false dawns before things finally got back under control.  With an interim deal we still have to negotiate a final deal which also means several years of still not being able to plan for the long term while we wait to find the new post final deal equilibrium assuming we ever get round to a final deal and don't just acquiesce in an interim arrangement.  There is no solution that leads to a magical overnight situation where we can all carry on as normal but there are options that just prolong the current situation which I think we can also agree is far from ideal. 

The best option is getting May's deal sorted this month and cracking on and with the next stage of the discussion and I'm hoping that enough MP's will be brought back into the fold to achieve that but if that doesn't happen I'd be hard pressed to choose between no deal and an alternative where we have no idea what will actually happen and that might still result in no deal.

There is no solution that leads to a magical overnight situation where we can all carry on as normal

Deciding not to carry on with the insanity that is leaving the EU would be a good start.

My biggest fear is a second referendum that results in leave again followed by the same chaos and a hard brexit in two years' time with a self-induced recession as a result of companies leaving and postponing investment because of the ongoing uncertainty.

Summersails  - no deal IS the chaos and uncertainty you and business fear, any steps we can take to avert it we should.  Simply letting it happen is to lock chaos and uncertainty for many years to come in.   A six month or even two year delay in brexit is a picnic in the greater scheme ot things compared to the locked in chaos no deal.   You can be certain by the way that if Brexit is delayed no deal wont happen.

How can you be certain no deal won't happen?  We'd be offered the same deal that's on the table now with MP's still arguing about the backstop plus you've assumed that the EU all agree to extend the Art. 50 deadline and that we haven't had a hard Brexit by default whilst organising the referendum.  It's unlikely the latter bit would happen but always a possibility.

Well whatever, your position is to say you would rather take the certainty of the downside of a risk now then delay the risk and possibly avoid it.  That is utterly irrational.

As I've said before I'd like a deal but if that doesn't happen I'm hard pressed to choose between no deal or another referendum in the hope it might come up with something different as both of the other two options possibly end up with the same result.

Sails, the point you keep missing is that no deal IS uncertainty and chaos - for example in your line the property market will go through the floor -  there is no advantage in cementing it in early and by delaying it we may avoid it.

You might have noticed that I'm also an optimist who has been convinced for a while that TM's deal will some how scrape through.

Actually although there'd be an initial dip the reduction in values so far plus a sudden dip in sterling would normally lead to an influx of overseas money that would revitalise the moribund top of the market and give me more better value work to do rather than the current diet of the odd big transaction and lots of faffing with smaller deals where I struggle to look like good value.  So weirdly in my personal position that chaos could be beneficial.  Would be a different story if I'd gone with a previous plan of setting up on my own and dealing with stuff in the £500k to £2m market.

summersails maybe maybe not - one of the reason top end foreign purchasers buy in London is because it is seen as a safe stable option, while I agree devaluation following Brexit will make property cheaper it may be that demand falls even further as purchasers are put off by the no deal chaos.

I think there'd be an initial further slump but within six months those taking a longer term view would start to invest again.  Trouble at the moment is that they are all worried that if they buy now they'll lose money come March which means there's very little going on.  Lucky I've just got instructions on a sale for well under £100k to keep me going!

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