DFDS’s Ferry Bid Failed Over Profit Guarantee Requirements

The Danish ferry operator DFDS was excluded from the selection process for operating Channel Island ferry services because it sought the ability to modify the frequency of its sailings if its profitability fluctuated, as stated by the deputy responsible for the tender process in Guernsey. During a session in the States, Deputy Neil Inder, President of Economic Development, informed other deputies that “the bidder also introduced a number of commercial levers in the event that its profit requirements were not achieved.” Brittany Ferries has been chosen by Guernsey as the preferred candidate to operate ferry services for the upcoming 15-year period, with a contract anticipated to be signed before the end of this week. The BBC has reached out to DFDS for a statement. DFDS was among three companies that submitted bids to manage ferry operations in the Channel Islands, competing with Brittany Ferries, the primary shareholder of Condor, and Irish Ferries. Over the last year, the States of Guernsey and the Government of Jersey compensated DFDS for trials of some of its vessels in Channel Island ports, forming part of their contingency strategies. Following a freedom of information request from the BBC, the States verified that approximately €700,000 (£582,995) monthly has been allocated for vessels, such as the MV Arrow, to remain on standby. The States indicated that this was not the sole vessel utilized for contingency purposes, but declined to provide additional information. During his address to the States, Inder stated that the proposal from DFDS was rejected due to legal deficiencies. He commented, “The proposed contractual arrangements put forward for final evaluation provided a significantly worse contractual position.” He further explained that the “risk” would have been shifted onto the Channel Islands’ governments. He elaborated, “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.” Inder mentioned that DFDS incorporated several “commercial levers in the event that its profit requirements were not achieved.” He specified that these mechanisms encompassed the power to alter freight and passenger fares, modify sailing timetables, and revise minimum service standards. Last week, the Government of Jersey announced its intention to initiate a new tender process to secure an operator for its ferry routes. DFDS has verified its interest in participating in this new tender process, which is specifically for a Jersey-exclusive service. Inder informed the States that he is prepared to participate in a comprehensive scrutiny hearing concerning the Channel Island ferry tender procedure.