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Issue 4 2012


///NEWS Eurotunnel to buy SeaFrance ships


The Paris Commercial Court has accepted Channel Tunnel operator Eurotunnel’s offer for three ships belonging to SeaFrance, which went into administration in January. Eurotunnel, along with a DFDS-LD


Lines consortium had been potential runners for the SeaFrance ships. Groupe Eurotunnel offered €65 million to acquire the Berlioz, Rodin and the freighter, Nord-Pas- de-Calais, along with their related assets. The acquisition will be made via Eurotransmanche, an ad-hoc financial vehicle owned by the group. This will then lease the ferries to an as yet unnamed operating company (a local paper said the provisional title was ‘Eurofunnel’) to be set up by former SeaFrance workers and managed by former Brittany Ferries director, Jean-Michel Giguet. The group said the company would be independent of Eurotunnel and would create 100 jobs in the UK and 500 in the Calais region. The ferries will need


overhauling before being brought into commercial service, as


SeaFrance was unable to complete maintenance work before it went into administration. They will also have the latest available emissions control systems added. Chairman and chief executive


officer of Groupe Eurotunnel, Jacques Gounon, said: “This will aid economic development and will further support the transport of people and goods between the continent and Great Britain”. Eurotunnel spokesman


John Keefe told FBJ that the two multipurpose ferries, the Rodin and Berlioz would be returned to service first, probably in August, followed by the freight-only Nord Pas de Calais in the autumn, when the freight market traditionally revives after the summer holidays. The Nord Pas De Calais is one of the few freight-only ferries operating on the Dover Strait. There are no plans to add further ships to the fleet at this stage, though this could happen later as the new company develops. In earlier interviews, Jacques Gounon had said that he believed


that ferries could cater for sectors of the freight market that could not be accommodated on its shuttle services, including larger trucks and dangerous goods. John Keefe added that there were other niche markets that the ferries could cater for, including dangerous goods, slower traffic or returning empty trailers that customers did not necessarily want to pay premium rates for. There could also be a niche for trailers that were too tall to use the Tunnel shuttles in their present canopied form, although they are to be rebuilt as open platforms. The initial aim was to grow the


new company’s market share – freight and passenger – to around 9%, compared with SeaFrance’s 18%. It is possible, though, that the


existing ferry operators could mount a challenge to Eurotunnel’s purchase, on competition grounds. Mr Keefe argued though that Eurotunnel’s purchase of the ferries should be seen as an alternative to adding more shuttle trains – which, since the shutting down of the specialist


production lines by the rail industry, would now a very expensive option. The news was greeted


unenthusiastically by P&O European Ferries, however. A spokesman said: “Bear in mind that SeaFrance was propped up by a huge injection of subsidies. When the


competition he authority ruled said


enough is enough, the inevitable happened and the company folded.” However,


out


any immediate action in the competition courts: “The market adjusted to the demise of SeaFrance last year so we’re interested to see how Eurotunnel, through a co- operative of former SeaFrance staff, proposes to operate in a way that does not distort fair competition. If we develop cause for concern on competition grounds we can raise them but at this early stage we watch how it unfolds and reserve our position.” Although more train paths are


available through the tunnel, there were times when available shuttle trains were operating at or near capacity, oſten for several hours at a stretch, and it was this that should


be borne in mind by the competition authorities, Eurotunnel’s John Keefe argued. “We could have gone out and bought new shuttles – recession or not, this is a growing market.” And while Eurotunnel may have a large market share specifically on the short-sea segment, its share of the wider Dover Straits market was much smaller, he added. A challenge to Eurotunnel’s purchase of the ferries would be no more valid than arguing that P&O ferries should not have been allowed to increase its capacity with its new superferries, he said. Eurotunnel itself might also


face competition from other rail- based operators. While it would be difficult, if not impossible for another operator to set up a second shuttle service between the existing terminals – as well as the cost of new shuttles, the terms of Eurotunnel’s operating concession gives it effective control of the shuttle terminals - it might be possible for another operator to set up a ‘piggyback’ service for unaccompanied trailers over somewhat longer distances –


although the first-movers in this segment appears to be Eurotunnel’s own ‘Europorte’ through rail subsidiary. (See page 8) Meanwhile, writing in the Dover


Express on 14 June, Dover MP Charlie Elphicke warned that the workers’


cooperative that would


operate the ships could come unstuck. If the cooperative went out of business, Eurotunnel would end up owning and operating the ships directly, Charlie Elphicke said, putting more than 50% of the total cross-channel market in the hands of one operator. That could lead to other operators being pushed out of business and, ultimately, increased prices to customers, he suggested.


Groupe Eurotunnel became the


first company to be admitted to trading on NYSE Euronext London on 19 July, transferring from the London Stock Exchange. The company said that the move would give it


“improved liquidity and


direct, convenient access to a broad investor base across Europe, thanks to the strength and visibility of NYSE Euronext’s European markets.”


Blue Belt ready for next phase


Several EU member states said they were ready to enshrine the Blue Belt short sea facilitation pilot project into permanent legislation at


the Transport Council in


Luxembourg in early June. A total of 255 ships took part in the pilot phase of the Blue Belt project, which aims to simplify administrative procedures, using the SafeSeaNet


community system for exchanging maritime information to transmit information to customs authorities. Transport Commissioner Siim


Kallas said: “It is essential that the Blue Belt pilot service becomes permanent and expands gradually to all vessels that move between EU ports.” UK Transport Secretary Justine Greening however


called for a true simplification of administrative formalities - and one not limited to technological solutions. Simplification of the customs code would be needed before the UK took a position on the integration of Blue Belt into its legislation. France also called for further technical work on the reliability of data.


New deal to promote short sea


The European Shippers Council and other stakeholders have signed a Shortsea Promotion Cooperation Agreement. ESC will look to promote


to shippers the virtues and best ways of utilising this mode of transport, supporting the work of the existing European Shortsea Network. ESC


hopes to make more shippers aware of the opportunities, benefits and advantages of using short sea services within their logistics and supply chains.


Europe signs up to tough sulphur limits


The European Council, Commission and European Parliament have signed a controversial agreement setting drastically reduced sulphur content in marine fuels, in line with new International Maritime Organisation (IMO) standards. It lowers maximum sulphur content in sulphur emission control areas (SECAs) including the North Sea, English Channel and Baltic Sea from 1.5% to 0.1% from 1 January 2015. In other areas, authorised sulphur content will be reduced from 4.5% to


0.5% from 1 January 2020. While the IMO has stated that it would consider postponing the new standard until 2025 if necessary, subject to the availability of suitable fuel, the EU insisted on a firm date of 2020 and ruled out any extension. Shipping and ferry operators have


warned that the new standard could lead to a severe fuel shortage and might lead to freight being diverted from sea to road transport. The Committee of Permanent Representatives (Coreper) still needs


to endorse the agreement. The European Shippers Council


points out, however that, although the measure will be tough, the outcome could have been worse. ESC welcomed the fact that the EU


chose not to follow the Parliament’s wish for a 0.1% sulphur emission limit in Southern European waters. While the English Channel, North and Baltic sea will be under the 0.1% regime, other European waters will only have a 0.5% sulphur emission limit, by 2020.


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