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The 15-year agreement between Guernsey and Brittany Ferries will allow the island's government to pull the plug five years early if certain conditions are not being met.
The break clause came to light during a scrutiny meeting in Guernsey this week, which saw politicians and civil servants dig through the process of the tender.
During the meeting it also emerged that this break clause, which Economic Development described as “in favour of Guernsey”, would allow the island to cut the tether eight years into the contract, with two years to wind down.
Pictured (from left to right): Deputy Simon Fairclough, States Principal Scrutiny Officer Suzanne Le Ray, Deputy Yvonne Burford and Deputy Gavin St Pier.
President of the Scrutiny Management Committee, Deputy Yvonne Burford directly asked the panel: “Can you tell me, are there any break clauses or termination clauses in the contract, and if so, could you describe them?”
Sarah Hutchinson, a Senior Commercial Lawyer at the States of Guernsey provided the panels answer, stating: “The Contract is a fifteen year term. There is a break clause in favor of the States at year eight, on giving two years notice, and that's to enable, if discussions about commercial investment aren’t satisfactory to the States, the States to make an early exit from the contract if it needs to.”
It was then clarified after a question from Deputy Gavin St Pier, that the commercial investments in question involve just the fleet, and not the mandatory refurbishing investments that have to be made during the contracts length.
Scrutiny set their sights on any potential extensions of the current contract, to which Ms Hutchinson stated: “There's a provision at the States' discretion absolutely, to extend for a five year period and a further five year period.”
Simon Steele, the Director of Procurement at the States, then laid out the details for any possible extension.
“There's a detailed KPI [Key Performance Indicators] schedule within the contract, so the states at that point in time would make a determination based on the performance of the operator, investments that have been made at that point in time as to whether or not it's in the best interest of the states to take the decision to extend," he said.
These KPIs are the targets that Brittany Ferries will need to match to warrant any contractual increase.
It was clarified by Steve Wakelin, the Chief Strategy & Policy Officer at States of Guernsey, that the intention is to publish these metrics annually.
Inter-island ferry arrangement expected by end of January
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