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Department sets out Strategic Sea Services Policy

Friday, 2 December 2016

The Department of Infrastructure is seeking Tynwald support for the next step in its bid to secure the long-term delivery of a high quality, safe, reliable and affordable ferry service.

Members will be called on to endorse the Strategic Sea Services Policy. The key policy proposal is that ‘The Department will intervene in the ferry services market to the extent that is necessary to provide for the social and economic requirements of the Isle of Man.’

A level of Government intervention is currently provided through the Linkspan User Agreement, which gives the ferry operator preferential use of the King Edward Pier linkspan in exchange for a guaranteed minimum level of service.

First approved by Tynwald in 1995, the commercial contract enables the Government to control aspects of fares and schedules to provide long-term stability for passengers and businesses. The current User Agreement runs until 2020, with a six-year extension option that can be triggered by either party.

The Strategic Sea Services Policy, which is based on the eight principles agreed by Members in July, will pave the way for the Department to return to Tynwald next year with options for the future provision of passenger and freight services.

In addition to the considerable amount of work already carried out, including feedback from a public consultation on customer priorities and research into the Island’s leisure and business requirements, the debate will be informed by the findings of two new reports.

At the December sitting, Members will be asked to receive an independent economic appraisal by Oxera Consulting LLP, requested by Tynwald in July, and a strategic options review by Park Partners Ltd.

The reports investigate a range of potential operating models, such as full or partial state ownership, franchising, and extending or renegotiating the User Agreement. They also provide a comprehensive analysis of current and future requirements, including port facilities and vessels, routes, seasonal demands, additional capacity for the TT period and financial issues.

Infrastructure Minister Ray Harmer MHK said:

‘Robust sea links with our neighbours are fundamental to the future of the Isle of Man. Certainty about services and costs is important to leisure passengers and absolutely essential to our business community. The delivery of a reliable, resilient and good value ferry service for the next 25 years will require some level of Government intervention in the market to protect the social and economic wellbeing of the Isle of Man. Without any Government control ferry services would be operated on a purely commercial basis, which could lead to the removal of uneconomic routes, a reduction in the number of sailings and a focus on freight rather than passengers.’

He added:

‘We believe the best way to support our people, our economy and our standard of living is to secure our sea links to adjacent jurisdictions. The Strategic Sea Services Policy will guide our work to ensure the Island’s ferry services meet our future needs while protecting the taxpayer.’

Subject to approval of the policy, the Department intends to return to Tynwald in April 2017 with proposals for the long-term delivery of strategic sea services.

The Strategic Sea Services Policy report, the Oxera appraisal, the Park Partners review, a copy of the Linkspan User Agreement and a guide to the Linkspan User Agreement are available on the Government website at www.gov.im/about-the-government/departments/infrastructure/strategic-sea-services/

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