Tuesday, February 12, 2019

RoRo Ferry Deal Hits the Rocks as Shipping Company Backers Pull Out and Government Backpedals

Transport Secretary Under Fire After Brexit Debacle - That Arklow Shipping Letter in Full
Shipping News Feature
UK – With ever louder calls for Transport Secretary Chris Grayling to fall on his sword after yet another debacle it seems the government is trying to explain its position over the Seaborne Freight affair when it promised to grant a company with no ships and no experience of running a ferry company a figure just shy of £14 million. Reports in the press say that the deal to provide a RoRo ferry service between Ramsgate and Ostend has fallen through, but not for the plethora of reasons which have already been mooted.

These included: water too shallow in the Kent port (dredging under way); Ostend bosses saying just last week the Belgian port had no room in its schedule to accommodate extra trade; a lack of suitable ferries for long term charter; Ramsgate being unsuitable without major landing facility upgrades etc. This time it seems Mr Grayling’s office has pronounced the withdrawal of Arklow Shipping, until now a silent partner in the venture, or so says the government.

Arklow, an Irish registered company had, according to the government, agreed to back Seaborne (what happened to that ‘backing a British start-up company’). The Wicklow based firm, which does indeed have interests in ocean transport but apparently no ferry portfolio, has now said it had no contractual arrangement with Seaborne but has yet to make a formal statement.

Arklow, controlled by the Tyrell family, has however seen the Irish press publish conversations with ‘sources close to the firm’ which state that it was neither a backer nor contract partner. The government however has published today a letter from Arklow which seems to indicate it was fully supporting the bid to open the ferry service, saying discussions had been going on for a year. The letter, dated January 18, would have certainly been relevant if published previously. One can only conclude that Mr Grayling wished to avoid mentioning the Irish connection. The letter in full below:

Dear Mr Grayling, Seaborne Freight (UK) Limited ("Seaborne")

1. Arklow Shipping is an Irish family owned company, based in Arklow, Ireland. The company owns and operates a fleet of 55 dry bulk vessels trading primarily in North Western European waters. While Arklow Shipping was founded in 1966 by James S Tyrrell, the Tyrrell family has a long seagoing and shipowning tradition, dating back two centuries. The company has two operating bases, Arklow in Ireland, and Rotterdam in the Netherlands. In both locations the company operates as integrated shipowning entities with chartering, operations, technical, crewing and finance departments. For further information please refers to our website: www.asl.ie.

2. Arklow Shipping has been working with Seaborne for twelve months in connection with Seaborne's proposals to develop new freight services between the UK and continental Europe. Arklow Shipping is therefore familiar with Seaborne's agreement with Her Majesty's Government to provide additional freight capacity in the event of the UK's departure from the European Union on a no deal basis.

3. In support of the current proposals to develop the shipping route between Ramsgate and Ostend, Arklow Shipping intends to provide equity finance for the purchase of both vessels and an equity stake within Seaborne which will be the operating entity of this project.

4. Seaborne is a firm that brings together experienced and capable shipping professionals. I consider that Seaborne's plans to deliver a new service to facilitate trade following from the UK's departure from the EU are both viable and deliverable. I will be working closely with the team at Seaborne to ensure that they have appropriate support from Arklow Shipping to deliver on their commitments to Her Majesty's Government.

5. I would be happy to discuss any of the above matters with you in greater detail, if that would be helpful.

Needless to say Mr Grayling is now under attack from all sides, he has already been heavily criticised over the train timetable affair and now he has been called ‘incompetent’ publicly by other MP’s. Industry critics include the Road Haulage Association (RHA) whose chief executive, Richard Burnett, pointed out that the RHA (and virtually everyone else in the industry) had said that three months to source the vessels, and recruit and train staff was tall order. He concluded that the government’s no-deal contingency planning is too little, too late and won’t instil much confidence in businesses trying to plan for a post-Brexit future.