Gladys Posted August 21, 2008 Share Posted August 21, 2008 To be fair, a price rise a year ago is hardly likely to provide the cushion against increasing fuel costs of the past year. Like it or lump it, fuel has risen substantially and the recent drops in crude can't be expected to feed in to the retail market just yet. Apart from the price of crude being the price of the raw material before refinement, you also have to factor in how fuel has been bought forward which could keep the price to us at an artificially high level until the forward contracts have expired. I don't really understand the mechanics of it all, but it is probably a little simplistic to expect the reduction in the crude price to feed directly and immediately through to the petrol pump. You do have to wonder, though, at the fantastic profits that the oil companies are making. Link to comment Share on other sites More sharing options...
Tugger Posted August 21, 2008 Share Posted August 21, 2008 Who is this Mike Brew character and why is a civil servant constantly defending the Racket's practices? Link to comment Share on other sites More sharing options...
Gladys Posted August 21, 2008 Share Posted August 21, 2008 Mike Brew is/was the Douglas Harbour Master, although I think he now has a more elevated position. He has been around for donkey's years. Problem is that with only one real commercial user of Douglas harbour it is very difficult for a truly arm's length relationship with the governing authority. I wouldn't necessarily think it cosy, but the fact is that with only one client you do tend to become very that-client-focussed. Link to comment Share on other sites More sharing options...
matty Posted August 22, 2008 Share Posted August 22, 2008 Mike Brew is/was the Douglas Harbour Master, although I think he now has a more elevated position. He has been around for donkey's years. Problem is that with only one real commercial user of Douglas harbour it is very difficult for a truly arm's length relationship with the governing authority. I wouldn't necessarily think it cosy, but the fact is that with only one client you do tend to become very that-client-focussed. Maybe it's about time we scrap the 'user agreement' and allow some proper competition ??? Link to comment Share on other sites More sharing options...
Gladys Posted August 22, 2008 Share Posted August 22, 2008 Yes, but who is going to compete? Even when there were still scads of tourists, effective and sustained competition was just not viable, remember Manxline? The user agreement, IMHO, is the only mechanism that the government have of imposing articifial competition in a monopoly situation. I doubt that you will get competition in any other form. It depends on the terms of the agreement. Link to comment Share on other sites More sharing options...
Tugger Posted August 22, 2008 Share Posted August 22, 2008 Plus scrapping the user agreement would be a breach of contract, and the Racket would sue (it would, however, be fairly easy for the government to screw the racket: just add passenger shipping to banking and rent from IOM properties as an activity that attracts tax at 10% rather thsan 0%). What we need is for the person who negotiates the user agreement from the government side to be just as savvy as the Macquarie private equity crew on the other side. Those Macquarie guys are paid a fortune, because they make Macquarie a fortune. Our civil servants are only overpaid because nobody can quantify what value (if any) they provide to the taxpayer: every time the Macquarie boys walk into the negotiation meetings and they see what's facing them on the other side of the table, they must be desperately struggling not to laugh. Link to comment Share on other sites More sharing options...
bluemonday Posted August 22, 2008 Share Posted August 22, 2008 And with a creaking groan, the user agreement gently breaks surface once again on the forum. Incidentally, anyone see that press release the other week about Macquarie buying most of the CI ferry op? Link to comment Share on other sites More sharing options...
manshimajin Posted August 22, 2008 Share Posted August 22, 2008 And with a creaking groan, the user agreement gently breaks surface once again on the forum. Like an iceberg is most of it hidden below the surface? That maybe why bits of it keep appearing every now and then. To be fair, a price rise a year ago is hardly likely to provide the cushion against increasing fuel costs of the past year. Like it or lump it, fuel has risen substantially and the recent drops in crude can't be expected to feed in to the retail market just yet. Apart from the price of crude being the price of the raw material before refinement, you also have to factor in how fuel has been bought forward which could keep the price to us at an artificially high level until the forward contracts have expired. I don't really understand the mechanics of it all, but it is probably a little simplistic to expect the reduction in the crude price to feed directly and immediately through to the petrol pump. You do have to wonder, though, at the fantastic profits that the oil companies are making. You are not on your own in not understanding the mechanics of it all! When reducing vessel speeds to reduce fuel consumption (and cost to the consumer) has been raised in the past in the Forum the User Agreement has been quoted as preventing this. Mark Woodward has also promoted the attraction of fast crossing times as a rationale for not slowing down a bit to reduce fuel costs - unlike other Irish Sea operators. To me both arguments seem to say that 'there is no need to do anything as the Manx consumer can continue to pay more'. If travel prices rise significantly passenger numbers will probably drop further and prices will have to rise at a faster rate to cover the IOMSPC's fixed costs and on the increased capacity they are introducing when the INCAT replaces the Viking. My concern is that the Island is dependent on the IOMSPC for most goods brought over here and for a high proportion of our tourist visitors. We (and in fairness the Steam Packet Company) are therefore economically exposed to fuel price movements and we are exposed to the inflation they cause. It would be good to see whether there are things that could be done to minimise these impacts or whether we just have to live with them. Currently we seem to be being told we just have to live with them. The government are still projecting 6% growth but if we have 6% inflation then that is essentially zero growth. Link to comment Share on other sites More sharing options...
ponderer Posted August 22, 2008 Share Posted August 22, 2008 Rotterdam is providing leadership by hosting an international conference on how to cut greenhouse gas emissions from shipping and ports. There might be some suggestions for the Island in the presentations. Not surprisingly, reducing shipping speeds features prominently as does ideas for Ports to reduce emissions when vessels berth... Link to comment Share on other sites More sharing options...
sarahc Posted August 22, 2008 Share Posted August 22, 2008 Mike Brew is/was the Douglas Harbour Master, although I think he now has a more elevated position. He has been around for donkey's years. Problem is that with only one real commercial user of Douglas harbour it is very difficult for a truly arm's length relationship with the governing authority. I wouldn't necessarily think it cosy, but the fact is that with only one client you do tend to become very that-client-focussed. Maybe it's about time we scrap the 'user agreement' and allow some proper competition ??? I'll whisper "Euromanx" softly in your ear... Link to comment Share on other sites More sharing options...
bluemonday Posted August 22, 2008 Share Posted August 22, 2008 I'll whisper "Euromanx" softly in your ear... Oooh Matron! Link to comment Share on other sites More sharing options...
manshimajin Posted August 22, 2008 Share Posted August 22, 2008 Rotterdam is providing leadership by hosting an international conference on how to cut greenhouse gas emissions from shipping and ports. There might be some suggestions for the Island in the presentations. Not surprisingly, reducing shipping speeds features prominently as does ideas for Ports to reduce emissions when vessels berth... Ponderer I attach Mark Woodwards comments on reducing speed to save fuel from another thread: Because the Steam Packet Company has an agreement with government, it is obliged to operate services that other operators on purely economic grounds would not. The Steam Packet Company continues to absorb the majority of the recent years price increases - only a small proportion is recovered by way of the fuel surcharges now applied. The agreement with government requires that a minimum speed for fastcraft is maintained. Fast craft services have been instrumental in growing visitor numbers to the Island and our own market research clearly indicates that passengers place a high priority on speed of sea travel. Many other operators are closing routes and slowing down their vessels. The agreement with government therefore ensures that we as Islanders continue to enjoy services that others are having taken away. I cannot see where the Agreement sets minimum speeds - and if it does surely the Government could change this to help the IOMSPC cut costs and help fight inflation on the Island. Mark seems to be taking a view that slowing down is for wimps - particularly as we can enjoy services that other have had taken away - "at our cost not the IOMSPC's"(my words). Could it be that other Irish Sea operators are more sensible and less macho because they operate in a much more competitive ferry and airline company environment? I wonder what he would say if Ryanair started operating from the Island....get that runway extended.... Link to comment Share on other sites More sharing options...
kevster Posted August 22, 2008 Share Posted August 22, 2008 I wonder what he would say if Ryanair started operating from the Island....get that runway extended.... There is nowhere near enough traffic for Ryanair to even be remotely interested Link to comment Share on other sites More sharing options...
manshimajin Posted August 22, 2008 Share Posted August 22, 2008 There is nowhere near enough traffic for Ryanair to even be remotely interested You're quite right. My too vaguely expressed point was that if the Steam Packet suddenly woke up to find it had to exist in an environment where it had competition such as Ryanair then MW might not be so lay back on exploring obvious ways of saving costs and holding fares down. The Irish Sea ferry companies have really picked up their game because of fierce airline competition. Of course we don't have that kind of competitive environment which is why Macquarie Bank invests in the IOM, Isle of Wight and (possibly) Channel Island ferry services rather than UK-Ireland ones or UK-France... Link to comment Share on other sites More sharing options...
Gladys Posted August 22, 2008 Share Posted August 22, 2008 Ditto for a sea competitor. For both means of travel what is needed is a very hard-nosed user agreement or licence arrangement. It must be very easy to determine what the likely demand for either service will be and then to put conditions on servicing that demand which will provide sufficient revenue to make the licence attractive while ensuring a level of service which is not detrimental to the island. That means to both residents trying to get off, as well as making it reasonably competitive for visitors. We cannot be unique in our requirements, despite our belief in the 'difference making the difference', and there must be other analogs which could be adapted to our requirements. But as someone observed above, we, or the government officials who negotiate these things, have to be hard-nosed. There is a profitable venture here as an uncompeted niche created with adequate safeguards. Why not use some meaningful key performance indicators which, if performance benefits the island, result in a reduced licence fee, but if they act against the island increase the fee? By no means am I an expert, but I am sure I could sit down and look at the various factors and come up with some 'break points' which will trigger corrective commercial consequences for the licenceholder to replicate serious competition. For example, require an audited cost forecast, acknowledging that certain costs are beyond control, and apply an accepted percentage profit margin to give the pricing structure. That percentage profit can move up or down depending on how many other benefits are given to the island, say, a cadet training scheme leading to local recruits achieving an industry recognised qualification (the steammie was our 'university' for many, many years), discounted carriage for people or goods that are essential to the island in either direction or day trips to or from the more unusual destinations in the Irish Sea as a facility for residents and a means of interesting others in a less apparent market. In order to do that, what is needed is a strategy from the IOM government on what it expects from its off island transport service providers and a commitment to work with the licenceholder as a true partner to the greater benefit of the island. What we do not need is a sea or air user agreement that basically provides for a bus service. Link to comment Share on other sites More sharing options...
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