Co-operative officially formed to restore Swansea-Cork ferry
By Jackie Keogh - Southern Star - Saturday April 11th, 2009
After considering the advantages and disadvantages of a new deal for the Cork Swansea ferry service, three hundred shareholders voted to officially form a new co-operative at a meeting in the West Cork Hotel in Skibbereen on Tuesday night.
Mr. Conor Buckley, chairman of West Cork Tourism, the company that has spearheaded the campaign to re-instate the ferry, began by giving the shareholders an update of the events that have taken place since the last meeting in Skibbereen on Tuesday, February 17.
He said: "Some things have changed; some things are better; and some are not as attractive."
The business plan that was prepared by Strategic Transport Solutions International on behalf of the Port of Cork Company initially showed a €3 million shortfall - a figure that was based on the ship, The Julia, costing €10 million.
The breakdown of that figure included €2 million in private equity, €3 million to be raised by three hundred shareholders investing €10,000 each, €2 million from a business expansion scheme (BES), and a loan from a Bank in Finland that has a vested interest in the ship.
Mr. Buckley said: "We can be proud of the fact that we have raised €2.9 million and are 98% of the way to achieving our target." However, he said they had not met the private equity target, and that the €2 million BES target would have to be split because they are only allowed to raise €1.5 million per calendar year.
The good news, according to Mr. Buckley is that after extensive haggling the people representing the shareholders managed to get the €10 million price tag for the ship down to €7.8 million - a figure that represents a saving of 22%.
The money saved is expected to be off-set against any shortfall in funding. It will also be used to cover bridging towards BES and operational costs, especially as the service is expected to operate at a loss in 2009, break even in 2010, and not become viable until 2011.
The Mayor of Cork County Council Mr. Noel Harrington did, however, confirm that the local authorities in Cork and Kerry, in conjunction with Failte Ireland, would come up with a grant package worth €500,000 towards the cost of marketing the new service.
Mr. Ciaran Desmond, who is a partner with McGuire Desmond, the legal firm representing the co-op, explained that the co-operative would take the controlling stake in a new private, limited company; and he said that the new company, which is likely to be called The Fastnet Line Company, would be set up in such a way that it could also attract direct investment.
Describing The Julia as "a fine vessel," Mr. Buckley said the public areas on board such as the bars and restaurants are "fantastic," but the soft furnishings in the cabins could do with some updating.
Over the last two years, he said, €3 million has been invested in the ship and the only reason it is no longer in service is because of political unrest in the country where it was operating.
He informed the shareholders that there is "an issue around the door of the car deck" but he and Captain Michael McCarthy, who is the commercial manager at the Port of Cork Company, said a new door had already been sourced and could be fitted - at an estimated cost of €80,000 - when the ship goes into dry dock.
The shareholders were told that the vessel would be bought "subject to survey" and would have to pass the criteria set out by the Marine Survey Office, which is responsible for the implementation of all national and international legislation in relation to the safety of shipping and the prevention of pollution of the marine environment from ship-based sources.
Although this has been identified as "a timing issue," Mr. McCarthy said the Marine Survey Office did indicate that they would be "willing to get involved at a very early stage."
Another disadvantage, according to Mr. Buckley, is that the shareholders will not - as was originally stated - have "first charge" on the vessel. He said it was his understanding that in marine matters the loan to the bank in Finland would have to be discharged first.
The shareholders were, however, told that their liability would not exceed the amount they have already pledged and he confirmed that their €3 million investment would make the new co-operative the majority shareholder.
Another potential stumbling block was identified: Mr. Buckley said the bank in Finland is expected to go through a court process to formalise the deal for its creditors and that could take thirty days to finalise.
Summing up, Mr. Buckley said: "We think there is a good deal to be done... there is a qualified risk, but to get any return there has to be risk." After a question and answer session it was Mr. Bob Murnane of Bantry who formally proposed the vote saying: "It's a fantastic idea and it will - if it gets going - be here for years."
The co-operative's legal advisor, Mr. Desmond was in charge of calling the vote. He said the decision could be made by a show of hands or, in the event of there being ten investors who wanted to have a formal vote, it could be conducted by secret ballot.
When the vote was put to the floor it seemed as if everyone had their hand in the air. With the vote carried, the new co-operative then set about the business of voting in a new management committee.
Mr. Desmond said various people had been asked if they would take on certain tasks, including representatives from six distinct regions throughout Cork and Kerry, and they had agreed to allow their names to be put forward.
Each proposal - including the proposal to make Mr. Buckley chairman of the new co-operative - was met with a similarly enthusiastic show of hands and a round of applause.
Only one question remained: when? Mr. Buckley said he hoped the new ferry service between Cork and Swansea would be up and running by early June, but he admitted: "There is a risk that the date could slip."