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March 15 2016.

Last week The Argus reported that the Newhaven to Dieppe ferry service run by DFDS would 'cease operations' this summer, after its contract was 'torn up'. 

The background to this, in simple terms, is that Eurotunnel took the ferry route owner, Conseil Generale de Seine Maritime, to court, claiming that the contact with DFDS to operate the route was unfair. Rod Main of the Transmanche User Group gives the full ins and outs below.

The Argus included a quote from Newhaven Deputy Mayor Paul Boswell: Deputy mayor of Newhaven, Paul Boswell, said there were concerns, especially given the possibility of Britain leaving the European Union.

He said: "If we vote to leave they could take away the subsidies which would leave us in trouble.

The Argus finished its story claiming that local MP Maria Caulfield, 'played down the ruling, stating it was a mere legal technicality.' and 'She said: "Eurotunnel felt the point was not clear enough so it has to be changed.

"I don't think the future of the ferry is in doubt. There's always been interest from other operators."

Haven News asked Newhaven Mayor Steve Saunders and Transmanche User Group member Rod Main for their views of the situation:

Steve Saunders. Newhaven Mayor:
I have been made aware of the technical legal issue surrounding the existing contract with Transmanche Ferries. I have been assured by the Président du Syndicat Mixte de Promotion de l’Activité Transmanche (SMPAT), Pascal Martin, that the commitment made to the route is not endangered by this legal point.

Newhaven Town Council remains fully supportive of the ferry service that continues to benefit both ports and I have recently visited Rouen to look at ways in which we can help promote the ferry service in the local and wider area. 

Both the ferry and the port rely on European subsidies to support their operations and it is important that we continue to do what we can to work together for the good of our local economies. Without the ferry service I believe that our port would find it difficult to remain financially viable and the success of Newhaven is inextricably linked to our working harbour.

The Argus decided to go with a sensationalist headline, suggesting the ferry will stop in the Summer, but I have been assured by NPP and Seine Maritime, that this is totally untrue.

Rod Main Transmanche Users Group (TUG):
Much as it pains me to agree with Ms. Caulfield, in this case she is, more or less, correct. It is perhaps more than just a "technicality", but in essence, it shouldn't change anything too much.

OK, that said, what is going on?  We know that the DFDS contract ran out at the end of 2014 and it was extended for a year to try to find a solution that would satisfy everybody. In principle, the EU regs are that public bodies can't put money into private companies - which is why you dont see ESCC putting up any cash.  However, there is an exception which the Conseil Generale de Seine Maritime  (CGSM - now Conseil Departmental) has been exploiting, which is that it CAN if there is likely to be significant social damage (loss of employment etc. etc.) and there is no private company willing to buy it off them.  

EuroTunnel, for its part, is feeling a bit aggrieved at being told they couldn't have a major shareholding in (what was left of) SeaFrance and were forced to sell it off. (Competition laws!)The result is that (I think it was called) MyFerryLink had to go into receivership. So Eurotunnel has been banging its drum about what it sees as anti-competitive - ie the fact that CGSM is effectively the owner of a private company - Transmanche Ferries - and putting public money into it. Eurotunnel may well have some justification.

So EuroTunnel has forced CGSM to re-evaluate how it deals with the ferry.  To that end it is trying to build a wider, part public, part private syndicate to run the company which would be spun off to stand on its own two feet. That company would then be free to form contracts other companies (like DFDS) to run the service. 

In my opinion, that didn't quite come off and it looks rather like CGSM wound up not far away from square one, but having told DFDS they could continue to run it for the next two years. However, square one (or maybe square one and half) isn't good enough and the court has ruled that the set-up it now has is illegal. The court also said it needs to be a proper private company which can ask for tenders from interested parties to run the line. It has to go through a proper tendering process. I suspect that CGSM could argue that it has already done that, and in fact, only DFDS seemed prepared to run with it. However, there is the small matter of how much public subsidy is going into the line. That was part of the problem all parties were trying to sort last year.

I suspect they will have to come up with some plan that has a reducing, (or at least reduced), public subsidy and SMPAT (the Syndicate) will have to be freestanding.  

So while there is some uncertainty about how this "back office" organisation is going to get set up, I think DFDS will be able to carry on running the service for at least the next 21 months.       

Cllr. Boswell does raise an interesting point about EU funding - particularly what's known as "Interreg". Several projects along the south have benefitted from Interreg funding and I guess if we leave the EU those would no longer be available. Some might say: "Ah. but the government could make up the difference because they will have all that money they dont have to pay into the EU every year". Well, they could ...but going by the way this government is being run, I rather imagine it will go to fund more tax cuts for the rich. Political? Moi?