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Steam Packet increase Freight Rates

18th November, 2008

THE Steam Packet had a choppy ride in Tynwald as MHKs criticised 'very high' profits, larger than necessary freight charges, confusion over discounted fares and lack of scrutiny of the user agreement.

As debate got under way today Alex Downie MLC accused the ferry operator of 'filling its boots' and alleged its Australian owner Macquarie had paid 'far, far too much' for the company and was now 'obviously trying to maximise their profits and get as much as they possibly can out of the system'.

Peter Karran (LibVan, Onchan) accused the Steam Packet of 'abusing its position' and freight charges were 'crucifying' Manx businesses.

Tynwald is debating a select committee report into Steam Packet fares and charges, standards of services and adherence to the user agreement with the government.

The report outlines a series of hard-hitting recommendations including a call to renegotiate the fuel surcharge agreement to ensure surcharges better reflect fuel prices.

Mr Rodan said the committee was recommending that the fuel surcharge agreement be renegotiated to 'clarify uncertainty and reflect current market prices'. And he said the committee's inquiries showed that the level of profit when compared to other European ferry operators was 'very high' and justified further examination.

The report shows that the company's profits quadrupled from £4.1 million in 2000 to £17.5 million in 2006.

Mr Rodan said that freight charges could be reduced significantly for the benefit of the Manx economy while still retaining an adequate return for the company.

There was also criticism for the Department of Transport which Mr Rodan accused of being 'somewhat lax in its scrutiny of the user agreement'.

The department had been 'happy' to approve fare increases without questioning the freight rate element in the calculation.

Regular meetings with the Steam Packet over the user agreement appeared to be quite informal, even to the extent that they weren't minuted, the Speaker said.

He said the DoT had a role as regulator of the user agreement.

'What it is not is their passive partner or defender of the company,' he told Tynwald.

He said the committee's recommendations would ensure the travelling public and freight users benefited from agreed standards of service at the most economical cost while allowing the company to function profitably for the benefit of its customers and shareholders.

The committee is recommending a Steam Packet liaison group is set up to monitor compliance with the user agreement and that the DoT checks comparable Irish Sea freight rates when considering planned fares and charges increases. The Office of Fair Trading should also be involved in talks over fare rises.

The fuel surcharge agreement should be renegotiated and a consultative body be set up to deal with complaints from the travelling public, the committee recommends.

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