Ferries eye Dover bid

RIVAL ferry operators P&O and Stena Sealink are preparing to join forces to bid for the Port of Dover to defuse a tense stand-off over the harbour's forced privatisation. The sale could fetch around pounds 70m.

Neither company really wants to own the port, but each is threatening to bid in order to stop its competitor from gaining the upper hand.

"If it must be privatised, the main thing I'd seek is fair treatment thereafter," said Rudolph Agnew, the chairman of Sealink. "We've had no approach from P&O, but there's no reason why we can't work together."

Sources close to P&O said it would consider a joint venture, but both companies denied talking to each other on the subject. However, David Shaw, Conservative MP for Dover, is conducting shuttle diplomacy between them and the Dover Harbour Board to promote the idea.

"It would be very helpful if we could get a consortium bid together using the ferry companies, the management and employees of the port, with maybe the people of Dover being able to buy shares," he said. "P&O and Sealink could take a blocking minority stake to stop take-overs." Any bid by the ferry operators, either singly or in concert, would be likely to spark a referral to the Monopolies and Mergers Commission. The companies already have experience as port operators elsewhere in Britain, but expressed confidence in the existing management. "Ideally we'd prefer the status quo to continue," said Mr Agnew.

A joint venture would not necessarily lead to a merger of the two firms. Proposals that they form a single company were shelved last year and are unlikely to be revived, as both seem to be enjoying the spur of increased competition.

Other privatised dock companies are not expected to bid for Dover as it has less potential for growth than bulk cargo and container terminals. Sir Keith Stuart, the chairman of Associated British Ports, the country's most successful privatisation ever, categorically ruled out a bid last week. "ABP will not be taking any interest in the Port of Dover," he said.

The port, which is owned by a trust, did not volunteer for privatisation when new legislation was introduced in 1992 because it faced uncertain competition from the Channel Tunnel. Last month, Dr Brian Mawhinney, then Secretary of State for Transport, sent a letter to the port to start a consultation process on privatisation, the first step in exercising the Government's power to force a sale. His successor, Sir George Young, is expected to continue the pressure.

The harbour board reacted negatively to the proposal last week, pointing out that the full effect of the Chunnel has not been evaluated yet, and that new safety regulations for roll-on-roll-off ferries could raise fares and dampen demand. "Such a major asset should not, the board feels, be sold off hastily or at a knock-down price," it said. The port made pre- tax profits of almost pounds 5.1m last year.

The Government moves come amid rising optimism in the ferry business. A combination of the tunnel's teething problems and fare cuts by ferry operators has stimulated demand for the sea route to Calais this summer. Both ferry companies are expected to turn in healthy profits for the full year.

Sealink said last month it had a 27 per cent share of the short sea crossing tourist vehicle market, behind P&O at 43 per cent but still ahead of Eurotunnel at 24 per cent. Hoverspeed, the upmarket carrier, had just under six per cent.

One debt agency suggested last week that Eurotunnel would have to swap pounds 3bn of its pounds 8bn in debt for equity this autumn. Its turnover in the second quarter was just pounds 60m, well below the level needed to meet its full-year projection of pounds 525m.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there