In January 2010 the Dover Harbour Board submitted a proposal under the Ports Act 1991 to government “leading to the voluntary privatisation of the Port of Dover.” Dover has operated as a trust for 400 years with no shareholders so all the revenue goes back into the business. Published accounts at the port from 2008 revealed that it made nearly £25 million in profits on revenues of around £61 million.

The application to the government to sell the port, estimated to be worth £300m, would end its 400-year-old status as a trust.

It would seem to be a plan to privatise the publicly owned port authority, with a new owner either being sought or else coming into being out of the current bureaucracy. The new owner would then be able to make a profit instead of ploughing all the revenue surplus back into investment in the port or remuneration for the bureaucracy. The Government would also receive a windfall cash lump sum from the sell off. So the trades unions representing the harbour staff and the ferry staff are against the sell off understandably, fearing for the jobs and working conditions and pay of all the port and related workers as the new owners try to drive up profits by reducing labour costs. The complication comes from differences within the big businesses and their representatives as to how the sell off should be conducted and portrayed. When the proposal was first suggested, by the management of the Dover Harbour Board themselves, there was a Labour MP for the constituency of Dover and Deal, Gwyn Prosser, and he asked questions in the house trying to get a proper debate over the issue, only to be reassured with platitudes by the the transport secretary. The three big Dover Calais Ferry companies, P & O, Norfolkline and Seafrance have also raised queries about the money they have already paid in increased berthing fees which they were led to believe would be earmarked for a new berth in the port and better facilities for the ferries. Now it seems that money may be used to plug the gap in the Harbour board pension fund, which the ferry companies are not happy about.

Then we have the new Tory MP for Dover,  Charlie Elphicke, calling for the privatisation to be turned into a community ownership scheme, with Dover becoming the “Peoples’ Port” rather than sold off to big business, which could see a French company owning the iconic port of Dover. The Murdoch press has then gone to town on this claiming that the White Cliffs will become French, and bringing Vera Lynne into the campaign.

RMT general secretary Bob Crow dismissed the “people’s port” suggestion as “nonsense,” pointing out that it was “being sold off to pay for the bankers’ bail-out.

“The Port of Dover is already owned by the British people as a national asset. Why would you want to buy something you already own?” he pointed out.

“RMT will continue to fight these plans.”

In a joint letter, the ferry companies said they had learned the second terminal was “no longer an immediate priority due to the privatisation process and there would be no obligation on the new owner to actually build it”.

We have a very, very poor relationship with the Dover Harbour Board in terms of confidence and trust

Robin Wilkins, SeaFrance

They also said they were always told excess dues paid over the past three years were to pre-fund new development.

They said they were led to believe cash was required because Dover’s “non-profit making trust port status meant it couldn’t borrow the money from other sources”.

Helen Deeble, chief executive of P&O Ferries, said: “It now seems that the £60m will simply land up as part of the privatisation assets of the port.

SeaFrance, P&O and Norfolkline claim £60m they provided to pay for a second terminal at Dover port is now earmarked to cover a pension fund deficit.

They have also protested at a proposed 35% rise in tariffs over the next three years and are threatening legal action

So the situation facing Dover Harbour Boad and the Dover Calais Ferry companies is complicated so I shall try to outline the positions of the main actors in the drama that is slowly unfolding.

1) The Dover Harbour Board is a non profit independent organisiation, a QANGO if you like, that owns and runs the Dover Harbour, one of the busiest pasenger and freight ferry terminals in the world. The board itself is appointed I think, well it certainly isn’t elected by the people of Dover and it’s not a puppet of the cross channel ferry companies either. So it kind of represents the interests of the government, supposed ly the nation as a whole, and not just the interests of local business and citizens. Being a non profit, and in a position of near total monopoly over the cross channel ferry market, the Dover Harbour Board has been set relatively high landing and berthing fees to the ferry companies, and then reinvest some of those “non profits” back into developing the facilities at the harbour. They can also pay themselves nice salaries for doing the management thing.

2) The Dover Calais Ferry companies have traditionally swung back and fore between being ultra competitive, and in a kind of unofficial collusion. Legally they are not allowed to stitch up the fare paying customers by setting a fixed rate because that would be a price fixing cartel, and the monoplies commission would in theory come down on them like a ton of bricks, but in practice the fare structures do work out remarkably similar during the years when the competition doesn’t seem to be working the way that markets are supposed to. Ferry companies also compete amongst themselves for the right to have a berth in the Dover Harbour, especially when a new one becomes available. The Harbour Board charges them a fee, which is set by the Harbour Board. The ferry companies can then take it or leave it, but if they decide to leave it , then they are no longer in the Dover Calais Ferry business.

Sometimes the ferry companies buy each other out, merging through aquistions. Thus Townsend Car Ferries Became Townsend Thorsen, who became European Ferries, who were taken over by P & O ferries, now the single largest Ferry Company. I’m not sure what happened to Sealink, the old nationalise Bristish Rail ferry operator who ran the train ferries, I think they may have ended up being owned by Sea France, who do still run Dover Calais Ferries. The there’s the Norfolk Line who managed to move into Dover via Ramsgate, but presumably originally from Felixtowe. There are no hovercraft running on the cross channel routes at present, but there are some fast catamaran craft, carrying passengers only no freight. So most of the freight is going via P& O and the Eurostunnel of course, which we won’t be going into at great length although it has to be said that it’s an agressive price cutting policy by Eurotunnel which has precipitated some of the present shake up.

The politicians have a role in all of this too. With the Con Dem coalition looking for ways to reduce the public deficit, any funds raised by selling off the Dover harbour Board would be gratefully sucked up into the black hole they wish to reduce, and there’s also the idealogical incentive which says that private ownership equals good, public ownership, however disjointed and even when run in the interests of big business = bad. As well as the national government polititians we also have the local politician in the form of new Tory MP for Dover and Deal, Charlie Elphicke who has a proposal of his own. He’s actually taking David Cameron’s rhetoric about “The Big Society” and trying to act as a popularist, offering to set up a new board of out of local residents who would elect a leadership in some kind of local referendum. A charitable body for such a venture has already been set up.

The Dover Harbour Board have put a proposal on the table by which they would privatise themselves, leaving themselves in control of what would now be a profit making company, able to seek loans on the financial markets and thus invest even more in better facilities and bigger salaries. The Ferry companies are not happy about this because they see the formation of a new body as a means to cancel the obligation to provide the facilities already promised when the fees to the Harbour were drastically increased recently. A profit making Dover Harbour would be in a position to simply leech off the ferry companies, setting ever increasing harbour fees without being under any obligation to provide an efficient service. It’s a dlilemma for the idealogues, how do you make sure the infrastructure for your precious free markets is maintained and developed? In the past free marketeers have been happy to acknowlege the role of the state in regulating and encouraging the development of infrastructure, but the present lot seem to have forgotten that.

The seafarer’s and officers unions are opposed to the sell off, fearing that increased financial pressure will be borne by the workers, as is always the case.

So we have two different versions of a sell off being proposed. The Dover Harbour board version, and the local MP version. And we have the ferry companies and the ferry workers expressing opposed to the deals. Have I left anybody out?

Oh yes, the fare paying passengers and drivers.

Technorati Tags: Charlie Elphicke, Dover, dover calais ferries, dover calais ferry, Norfolk, norfolkline, P&O Ferries, SeaFrance