States and Condor Ferries are jointly buying new vessel

The purchase of the conventional ferry, which is still in New Zealand but has already been painted up in Condor livery, was originally going to be bought jointly between Condor and the Guernsey Investment Fund – a locally-managed fund where the States is an investor.

But in a change of direction, Condor and the States have concluded a 50/50 joint venture agreement for the purchase of the vessel. The move came after the Policy & Resources Committee said it became aware of ‘challenges’ that meant the deal was unlikely to be completed as originally planned.

Both parties are investing £3m. of equity in what they are calling a ‘joint venture’ and the States expects to receive a commercial return from the ferry operator. The States has also made a £26m. loan from its bond to the joint venture, which will be repayable at a fixed interest rate over 10 years.

The Civil Contingencies Authority directed Policy & Resources to secure the vessel, due to what it said were risks to the island’s supply chain.

CCA chairman Peter Ferbrache said the CCA met last Thursday and again on Monday to consider the matter. He said due to time pressures, it was appropriate to use the CCA’s powers for prompt action.

‘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,’ he said.

‘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.’

Back in September, Deputy Ferbrache said the vessel would not be owned by the States.

‘Deputy Roffey and I wouldn’t be Captain Roffey and First Mate Ferbrache,’ he said then.

Condor’s CEO John Napton said the latest move was good news for the islands, supporting freight, tourism and connectivity.

It intends to operate the ship on the route between Portsmouth and the islands, and to enable the company to continue to develop freight services from France and inter-island frequency.

‘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.’

Policy & Resources as confirmed it expects an investment return from this self-financing deal, and would secure, and enhance, sea link services for the next decade.