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  1. ITV Report

IoM Government agrees to buy Steam Packet Company for £124m

Photo: Steam Packet Company, Facebook

The Isle of Man Government has made a deal to purchase the Steam Packet Company and bring stability to the island’s lifeline ferry operations.

Tynwald Members are being presented with a ‘once-in-a-generation opportunity’ to take strategic control of sea services in next week's sitting.

Treasury Minister Alfred Cannan MHK has tabled a motion for 15th May, which seeks approval for the Government to commit £124 million to purchase MIOM Ltd, the parent company of the IoM Steam Packet Company.

The proposal follows extensive assessment of potential operating models and analysis of the Isle of Man’s current and future requirements, including port facilities and vessels, routes, seasonal demands, additional capacity for the TT period and financial issues.

IoM Treasury Minister Alf Cannan MHK will bring forward the proposals next week Credit: ITV

We believe it is in the best interests of our people and our economy to take a controlling stake in the national ferry operation rather than commit the Island to another long-term agreement with an external provider. The Government has not been in a position to explain its intentions to the public before now because of the commercial confidentiality of the negotiations. However, we believe we are paying a fair price to secure a profitable, cash generative national asset and gain strategic control of our sea services.

– Treasury Minister Alf Cannan MHK

IOM Government has been considering its options since Tynwald voted in July last year to reject the Steam Packet’s revised offer of a new strategic sea services agreement to replace the existing Linkspan User Agreement.

Terms and conditions and the acquisition will be progressed if Tynwald Members approve the Treasury motion.

While the move would immediately bring ferry operations into public ownership, the Government has stated that it would not take charge of the day-to-day running of services.

IOM Government say the business would be run 'at arm’s length', with options for either a partner or other investors to be considered in due course after completion and finances would be restructured to minimise the outlay from Reserves.

The current Steam Packet management and staff would continue to run the passenger and freight operations.

If the Tynwald motion succeeds, the Government would seek to put in place a new strategic sea services agreement within the next 12 months.

Our focus throughout this process has been on ensuring safe, reliable and high quality ferry operations. Acquiring this national asset represents a once-in-a-generation opportunity to provide long-term stability for our people and businesses.

– IoM Chief Minister Howard Quayle MHK