Revealed: Why DFDS couldn't get the joint CI ferry contract

Wednesday 20 November 2024

Danish shipping giant DFDS's bid for the Channel Islands' key ferry contract received a "mandatory legal fail" because the operator apparently requested a unilateral right to adjust pricing and sailing schedules, it emerged this morning.

The key details were revealed in a meeting of Guernsey's States Assembly when the island's Economic Development Lead Neil Inder was asked an emergency question about why the bid failed to qualify.

It follows confirmation yesterday afternoon that DFDS was ruled out in both Guernsey and Jersey because of a “mandatory legal fail” – but one which Jersey’s Economic Development Minister Kirsten Morel has said he could not understand the reasoning for, and had been labelled before today as a technicality.

This is one of two major splits that have emerged in the different islands' thinking over who to award the contract to – the other relating to financial aspects.

With Guernsey now progressing with Brittany Ferries/Condor to service the island alone, Jersey has now launched a "rapid process" to confirm its own freight and passenger service provider, which should be complete by the first week of December. DFDS today confirmed that it would be throwing its hat in the ring – and said it would be capable of taking over operations "immediately" if required.

"A number of commercial levers..."

Just hours after that announcement, Deputy Inder moved to set the record straight over what contact there was between the islands after Guernsey had made its choice and and how the process unfolded, given strong suggestions from Jersey's Economic Development Minister Kirsten Morel last week that Guernsey had been difficult to work with when it came to scoring the bids.

“Legal evaluators in both islands worked together, as all of the evaluators did in the tender process,” he said.

Pictured: Deputy Neil Inder.

“The legal evaluators failed the DFDS bid in respect of the legal evaluation, because the proposed contractual arrangements put forward for the final evaluation provided a significantly worse contractual position and risk transfer to the Channel Islands governments than we specified within procurement documents," he continued.

“These risks included that the bidder significantly excluded and limited its liability prior to the commencement date In respect of risks under the bidders control.

“The bidder also introduced a number of commercial levers, in fact, derogations in the event that its profit requirements were not achieved. 

“These levers included introducing a unilateral right for the operator to i), adjust freight and passenger pricing. ii), adjust the sailing schedule, and iii) adjust the minimum service requirements.”

The island's former Chief Minister, Deputy Peter Ferbache, described the request as the bidder being able to “change all material terms on a whim and impose its own conditions".

DFDS’ derogations also included being able to postpone any investment in the fleet by 12 months and extend the contract term by a further 12 months, Guernsey States Members were told.

“And just so we're clear, the Brittany Ferries bid was contractualised,” said  Deputy Inder.

“So all the risk was in the Brittany Ferries contractualised bid, all the risk transfer from the DFDS bid was straight onto the people of what would have been the whole of the Channel Islands.”

He said, she said, continues...

Guernsey’s Chief Minister Lyndon Trott and External Relations Lead Jonathan Le Tocq and two key members of Jersey’s Council of Ministers, Chief Minister Deputy Lyndon Farnham and External Relations Minister Deputy Ian Gorst, met twice in the fortnight after Guernsey had made its decision and the announcement being made to discuss the situation.

Guernsey had expected Jersey to make its decision in line with the same timeframe they were operating under, having received an email from the civil servant in charge of the process in Jersey. This was previously Economy Department Chief Officer Richard Corrigan, who stepped out of the process after a social media blunder. 

"I genuinely don't know why Deputy Morel claims that Guernsey went first when we had clear information from Jersey that they were sitting effectively on the same day as us," said Deputy Inder.

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