DFDS 'lost ferry bid over profit guarantees'

The States of Guernsey and Government of Jersey paid DFDS for berthing trials as part of contingency planning

Danish ferry firm DFDS was disqualified from the process to run Channel Island ferry services as it wanted the rights to change the number of sailings it operated if its profits changed, according to the deputy overseeing the tender process for Guernsey.

Responding to questions in the States, Economic Development President Deputy Neil Inder told deputies "the bidder also introduced a number of commercial levers in the event that its profit requirements were not achieved".

Guernsey has selected Brittany Ferries as its preferred bidder to run ferry services for the next 15 years, and is expected to sign a contract later this week.

The BBC has contacted DFDS for comment.

The MV Arrow is among the vessels being used for contingency planning

DFDS was one of three bidders that sought to run ferry operations in the Channel Islands, alongside Brittany Ferries, the majority shareholder of Condor and Irish Ferries.

In the past year, the States of Guernsey and Government of Jersey paid DFDS to test some of its ships in Channel Island harbours as part of contingency planning.

In response to a BBC freedom of information request, the States confirmed it has been paying about €700,000 (£582,995) per month for boats, including the MV Arrow, to be kept on standby.

The States said it was not only ship that was being used for contingency planning, but would not disclose any further details.

'Worse contractual position'

Speaking in the States, Inder said the DFDS bid failed on legal grounds.

"The proposed contractual arrangements put forward for final evaluation provided a significantly worse contractual position," he said.

He said the "risk" would have been transferred to the governments of the Channel Islands.

"These risks included that the bidder significantly excluded and limited its liability prior to the commencement date in respect of risks under the bidder's control," he said.

Jersey-only service

Inder said DFDS introduced a number of "commercial levers in the event that its profit requirements were not achieved".

He said the levers included the ability to change freight and passenger pricing, adjust the sailing schedules and change the minimum service requirements.

The Government of Jersey said last week it would run a new tender process to find an operator for its ferry services.

DFDS has confirmed its interest in the new tender process for a Jersey-only service.

Inder told the States he would be willing to attend a full scrutiny hearing on the Channel Island ferry tender process.