Member Info for Si_Derman

This from Baroness Vere to Stuart Reid, Chief Executive Officer,Isles of Scilly Steamship Group

17 March 2023

Dear Stuart,

Thank you for your proposal for taking forward the Isles of Scilly Ferry Replacement (Sea Links) project. Thank you also for our meeting with the Secretary of State on 11 January.

I have considered your new approach carefully with my officials and I am grateful for the time taken to rework the proposal. I accept the new approach could be workable in isolation, however the proposal does not avoid the need for public procurement in the specific context of the Levelling Up Fund. As the funding must flow through the Council of the Isles of Scilly, passing the funds from the Council to the Isles of Scilly Steamship Group (ISSG) for the delivery of a service, creates a requirement for public procurement.

Furthermore, as your proposal acknowledges, 51% of the funding would have to be obtained from elsewhere. In order to return the value to lenders and others, the ISSG could potentially have to raise passenger fares and freight charges significantly, increasing the disparity between the Islands and the mainland, therefore running counter to levelling up ambitions. Your proposal is also at odds with the position set out in the letter from the former Maritime Minister, Robert Courts, to the Council last summer. The approach set out in this letter remains our stance.

My officials are working with the Council to consider alternative delivery models for the project including what the ownership arrangements for the new vessels will be. Government is keen for ISSG to remain part of the project and recognises that pursuing the approach set out in Robert Courts’ letter would be a significant change for ISSG.

I have copied in your partners at Tresco Estates Partnership and the Duchy of Cornwall who supported your proposal, along with the Council as the accountable body for the project and local MP, Derek Thomas.

"They have already gone through a bidding process from three potential bidders (Harl among them) "

Have seen this posted before but not sure if you are just being repeating the coment from someone else posting it,

Even when asking for a reference none has been forthcoming. I know we are one of three for the Sea Rose, because I downloaded the document that says so. But I don't recall seing a shortlist for the Scilly vessels.

I beleive the funds have to go "through" the council. H&W can't "apply" for them in the same way neither can the Steamship company. AFAICT, anyway.

From the Agenda of the FULL COUNCIL meeting on Tuesday, 12th September, 2023 9.30 am

1. At the meeting of Full Council on 22 June 2003, members received an update on progress in delivering the Isles of Scilly Sea Links Project.

2. The report provides a further update on the progress since the Full Council meeting in June culminating in the Council preparing a Full Business Case.

3. Following the meeting, the Chairman of the Council wrote informing the Minister for Aviation, Maritime and Security, Baroness Vere, of the outcome of the outcome of Full Council and to seek the Department for Transport’s support for the Council’s to engage with potential shipyards and operators through a Prior Information Notice process. The Chairman met with Minister Vere on 3 July to discuss this approach and it was agreed that the Department for Transport would invite both the Council of the Isles of Scilly and Steamship Group to come together to have one final attempt at finding a way to deliver the project using the Levelling Up funding.

4. On 21 July, the Department for Transport facilitated a workshop session attended by representatives from both the Council and Steamship Group. The session provided the opportunity to review the plans and timescales for delivering the new vessels using the Levelling Up funding which was still available to the Council or the completely privately financed proposal being put forward by the Steamship group.

5. In order not to delay the programme the Steamship Group were working to deliver the new vessels into service using private finance by March 2026, it was agreed that the Council with support from both the Department and Steamship Group, would work on a parallel proposal to deliver the same vessels in the same timescale using the Levelling Up funding. Central to this approach was the preparation of a Full Business Case to enable the Levelling Up funding to be made available to the Council. If approved, this funding would then be made available to the Steamship Group via a Special Purpose Vehicle to deliver the vessels and avoid the need for private finance to be used.

6. Both the Department and Steamship Group have been working with the Council over the last six weeks to get the business completed. In case of the Department, this has seen a range of specialists from within the Department and external legal and financial advisors engaged. In the case of the Steamship Group, the focus has been on the provision of detailed information to the Council relating to their current operations and future proposals involving private finance. The provision of this information is covered under a Non-Disclosure Agreement (NDA) between the Council, the Department for Transport and Steamship Group.

7. In order to ensure that the Council continues to comply with the terms of the NDA, further details of the Full Business Case will be considered as a Part 3 report at this meeting.

There's more... but no mention of Harls late proposa

Not sure if this has been posted. Been away for a few days and just catching up.

Recall being challenged by a few on here about my comment, " I find it very odd that they hadn't consulted with the council before annoucing this proposal..." in reponse to part of the BBC article posted said, “news of the bid has dropped like a bomb”.

Well, I'm not sure what time they get their post down there, but I bet it was sometime after the 7am RNS that day.

"We can confirm that the Council received a letter from Harland & Wolff on 30 August 2023 (dated 29 August 2023), which made us aware of the company’s proposal for the first time."

https://www.scilly.gov.uk/news/statement-council-relation-harland-wolff-announcement-concerning-sea-links-between-scilly-and

So many questions regarding this "proposal". But mostly, why that day?

Why not today, as it might have kept the momentum going a bit longer.

Looks like the sp could do with a lift after the usual drift down after good news. :)

Evening. ;)

Owners of the Afon Wen are Holyhead Towing and they have a fleet of them. fwiw.

https://holyheadtowing.com/

LSE, curious why would think that they be putting any barges on the "Sun Shine" at all?

It's been in for repairs. I'm not sure if Pan Ocean Group are going to be okay with that, tbh.

Unless they don't mind dropping one off on the way back to Rotterdam. lol

Best not to make predictions in the first place, tbh.

Ignore those that do or offer little else besides cherry picked nuggets, repeatedly,to backup theirs.

And just do your own thang based on what you have learnt along the way.

Oh, and try not to be too smug about afterwards when you were right. They don't ike that.

Also don't expect things to change next time.

Beginning too think the company or JW has some form of ADHD. All for expansion from the "five markets six services" or whatever it is but FFS just focus on one thing until you can do that effectively. So far, whilst being behind schedule on the the barges, they have suggested building our own barges and then going into the haulage business, our own range of fishing boats, work boats for the wind industry and now build and operate a ferry business.

BTW, some of that leveling up money is also for the upgrades to the ports. Both on the IoS and Penzance.

Harl is Infrasrata. It was just a name change. Fwiw.

What "resources" exactly.?

You also have to factor in c4000% in dilution since those lofty targets.

Some really do need to Dyor. :)

Very interesting, Juyamah. Funny looking back at some of the topics we were discussing at the time and just how long they have taken to get sorted. Almost.

Also interesting and refreshing that there was not a single green box on that whole page.

Although, looking closer it would seem someone, who now resides in one, may have changed their moniker. imho

And added a couple of years. imho !!:)

I hope you realise the prices on the LSE are in pence, not pounds. ;)

Work to Date

A number of meetings have taken place with the Department for Transport to discuss how the assets are held and the future role and responsibilities of the Council. The model currently proposed has the potential to ensure the Council’s is not exposed to an unacceptable level of risk or ongoing liabilities both in the build and operation of the new services, whilst at the same time being able to represent the needs of all users.

Draft Special Purpose Vehicle Model

A model proposed is to establish a Special Purpose Vehicle. This is a limited company setup with a special purpose and has defined regulations for the company’s operations within the company’s articles of association. All members and company officers (directors and secretaries) must comply with the articles.

The SPV limited company which will the owns the vessels. The Council will hold a minority shareholding which is below the threshold to appear on the Council’s financial reports. The majority of the shares will be held by the SPV partner procured through competition. The limited company’s articles of association would differ from a standard limited company giving the Council, as minority shareholder, control over reserved matters to influence aspects of the company decisions towards service delivery and fares and freight charges.

The Council would be able to complete agreements to transfer the levelling up fund to the SPV. The SPV partner is also likely to be the operator of the new vessels and their expertise would be used to produce the vessel designs. The SPV would then be able to procure the new vessels following public procurement regulations and finally put the vessels into service.

The SPV would not operate the vessels but contract with the SPV partner’s ferry operations company as a private sector partner for a contract period. The SPV charges the ferry operator a flexible annual lease charge to ensure that the operator remains viable irrespective of economic conditions whilst retaining a proportion of the profits into an Isles of Scilly transport fund. This fund would be used for future transport costs including major refits, but it is recognised that the fund will not be sufficient for the full costs of future vessel replacements. Future Government capital contributions will be required to sustain the model.

This financial model provides a way to discount fare and freight charges by using the capital investment.

Https://www.msn.com/en-gb/travel/news/isles-of-scilly-steamship-company-profiting-off-bad-weather/ar-AA1fEw7s

TBH, due to local links I've been following this for quite some time and have done a fair bit of research. So, have a reasonably good understanding of what has been going on. More than I've actually share here so far. That includes all the various council meetings.

You might want to check out the documents like Appendix K: Overview of proposed Special Purpose Vehicle from the last full council meeting.

The commercial model which is required for the Sea Links project must: -

• Control the use of the vessels which are bought through public funding.

• Provide a regular and affordable lifeline service.

• Be lawful.

• Achieve Value for Money.

• Structure a commercial arrangement that mitigates risks and does not cause accounting difficulties for the Council.

o Financial size of CIoS means it cannot own vessels due to financial risks.

• Protect against the risk of insolvency of the operator.

o Maintain proportionate subsidies.

o Hold vessel ownership in a way that should the operator go bankrupt, the vessels are not tied up during liquidation.

If H&W are joing them as partner for this SPV that's why I was surprised by the reaction.

“news of the bid has dropped like a bomb”

I find it very odd that they hadn't consulted with the council before annoucing this proposal. Afterall it's them that hold the purse strings.

Same blurb on yahoo, but has some pictures of the vessles I hadn't see elsewhere.

https://s.yimg.com/ny/api/res/1.2/h7l_BE5NlodK3VK.jWx44g--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTYzOTtjZj13ZWJw/https://media.zenfs.com/en/belfast_news_letter_106/4f325e51003f9514176885f05d4df9e1

Bit pushed atm, but will share some research on the matter later.

Sorry, I will try and be a bit more positive. ;)

Https://www.islandmageeenergy.com/project-overview/key-financial-data/

Https://invst.ly/118drf

Thanks. Think I've done that and have a blank screen with " Audio + Presentation Mode.

Is that right? :)

Thanks, but what should I be seeing at this point?