Re: £100 million needed for deep water berth

by Dave Jones Sat 28 Feb 2009, 11:26 am

The decision on the fuel tankers was the right one, 17 million euros for two ships less than two years old was a bargain and we now have full control over our own fuel supplies. The decision had to be taken quickly for several reasons first of all the company that owned them went into liquidation overnight, I was called to a policy council meeting together with all other ministers at 8.30 the following day which was a Saturday morning, to be told that both these tankers were now subject to the control of company administrators and our next fuel delivery to the island was uncertain. We decided very quickly to put in a bid to buy them in order to stop them being sold elsewhere and possibly being taken out of European waters for good, considering they were two of only 7 ships capable of serving these islands with the others on contracts that would have prevented them from serving our needs, I think that decision was eminently sensible.

The Chief Minister and Treasury Minister were given leave to negotiate the best deal they could for the two vessels which they did. The whole thing was kept under wraps for very good reasons .the first being that we did not want the owners to know that it was a government who were trying to purchase them for fear of the price being hiked up, which is why they were bought through an agent, secondly we did not want to cause any panic buying at the pumps because people felt our fuel supplies were at risk, which for a very short time they were.

On the other points we are investing in wave generation technology and the trials in Ireland are going well by all accounts. On reducing our oil demands I think we are, the power station uses mostly French nuclear power (whatever you think of that) and people are I think where possible cutting down their dependency on oil. The prioritization debate will now take place after T&R’s billet to the states on possible funding mechanisms i.e. borrowing or not for essential projects. Which is much more sensible than having the prioritization debate saying what projects should take preference before we have discussed how we might fund them.

by Dave Jones Sat 28 Feb 2009, 11:28 am

PS The money was spent to secure supplies and for no other reason.

by Bouzat Sat 28 Feb 2009, 11:50 am

Thank you for the reply. Although the Eur17mn was spent to secure supplies, you say that the price was a bargain, which implies a good deal for an investment. How are the ships being treated in the States' accounts - as assets or just as a very large "running cost"? Even if they are assets, I suspect that there will be significant annual depreciation charges, again a large cost, unless the residual value ( probably scrap) is a factor.
I am glad to hear we are largely dependent on French nuclear power ( I think!) but if so why the big panic about spending so much on oil supplies? Presumably the only other usage is for heating, but you mention that people are cutting down on dependency on oil. That only leaves vehicle fuel - and we all know that usage of that should be reduced!

by Spirit Sat 28 Feb 2009, 12:10 pm

I would assume that these ships are now being chartered, both to our fuel importers and to other suitable users, therefore they should be earning a profit if used correctly.

The panic to buy these ships would have been that without them we would have had no transport (public or private) food in the shops, followed by no gas and even electricity failures. Who knows from there?

IMHO buying these ships was one of the few sensible decisions made by this States.

by Bouzat Sat 28 Feb 2009, 12:27 pm

I agree as a short term measure if it was that extreme, but it underlines that we should be looking at other energy sources so that we are not reliant on oil and having to spend multi millions on tankers, berths etc. And what if the oil starts running out or the price gets prohibitively high again?

by Spirit Sat 28 Feb 2009, 1:12 pm

That is why I believe that developing energy sources to replace oil is more important than the risks of global warming. Our reliance on oil has become so great that should the supply fail we would be in serious world-wide trouble.

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