What now for SNCM?
Following an investigation triggered by a complaint from SNCM's Italian rival Corsica Ferries, the European Commission ruled in May 2013 that part of the French state aid given to the company to operate ferry routes between Corsica and Marseille during peak periods was incompatible with EU competition rules.
The commission said it had taken into account the need for Corsica to have effective maritime links with the mainland and ruled that while some state compensation was warranted, other types of aid provided since 2007 gave SNCM an "unjustified advantage".
This aid, granted when the routes were already provided by the private sector, should have been recovered from SNCM within four months. By December, more than seven months later, France had yet to take any action.
In November the commission, which polices state aid in the 28-nation bloc, added a further €220 million (US$301 million) to the amount not yet recovered. This brought the total amount SNCM must repay to a staggering €440 million (US$603 million). In addition, France is being taken to the European Court of Justice for its failure to recover the unlawful grants.
In a statement, the commission said that SNCM could not be weaned off state aid under its restructuring plan, making the support illegal under EU rules. For its part, the French Finance Ministry said it had already lodged appeals in the case and France's Transport Minister Frédéric Cuvillier bullishly said in an interview with La Provence that the state is not seeking the reimbursement of aid from SNCM demanded by Brussels.
Whichever way this plays out, the future for SNCM looks set to end in receivership.
A November earnings statement warned that the ferry operator – partially owned by Veolia subsidiary Transdev, the French state and its own employees following privatisation in 2006 – "could be placed in receivership" at the request of management or a creditor because of "significant strain" on cash. The CGT union and politicians have also indicated that the ruling by the EU could result in the collapse of the operation. That would put 2,600 jobs on the line in a region where President Francois Hollande's Socialist Party risks heavy losses in 2014 municipal and EU parliament elections.
Condor keeping mum about new vessel
Condor Ferries has launched its 2014-15 sailing schedule, which features trips from Weymouth to Guernsey, Jersey and St Malo in France. There will also be fast ferry services from Poole commencing from April 2014.
The company returned to Weymouth with its 86-metre Incat vessels in 2013 after it took 17 months for the region's crumbling harbour wall to be rebuilt.
Condor has agreed to sign a 15-year contract to continue using Weymouth as its main route and will also be setting up a new vessel to and from the Channel Islands. The identity of this new vessel for the Weymouth link has yet to be revealed, but as I mentioned in October 2013, my money is on Austal's long-dormant 102-metre trimaran.
Sigh of relief for Interislander
At the time of writing, the chartered 'Stena Alegra' is expected to arrive in New Zealand from Poland in late-December, bringing a near return to capacity for Interislander following the withdrawal of the damaged 'Aratere'.
There will be regulatory issues to resolve, crew training, and some trial runs as a freight-only ship before the 'Stena Alegra' can enter service as a passenger vessel. Interislander anticipates that this will occur sometime in early January.
In the meantime, Interislander has reopened its reservation system for new vehicle bookings for both the 'Kaitaki' and 'Stena Alegra' for the period January 12 to March 31, 2014. From January 12, the RoRo newcomer will make two returns sailings per day.
Scandlines' new ships in jeopardy
German-Danish ferry operator Scandlines' order for two new ferries for the Rostock-Gedser route, for delivery in spring 2015, has taken a stumble. The double-ended LNG ferries have been hit by STX Finland's difficulty in securing funding to build the vessels.
Finland's Minister of Economic Affairs, Jan Vapaavuori, stressed that news of the problems STX faces should not be blown out of proportion. For its part, STX Finland has asserted that it continues to explore alternative solutions to allow it to deliver the two Scandlines ferries on time. The €500 million (US$685 million) project was estimated to create roughly 1,000 jobs at the Turku shipyard. Initially, the project was to be undertaken in co-operation with STX Finland's Rauma shipyard, but in September 2013 the shipbuilding company announced that it would concentrate its operations in Turku.
Meanwhile, International investor 3i Group is to become the majority shareholder in Scandlines after buying out former co-owner Allianz Capital Partners (ACP) in a €165 million (US$226 million) deal. Following the transaction, which is expected to take place before the end of 2013, 3i and its subsidiaries will gain ACP's 49 per cent stake. In 2011, Scandlines sold its long-distance freight routes to Stena Line to focus on improving its short sea ferry services, which operate between Denmark and Germany as well as Denmark and southern Sweden.
Justin Merrigan
