SeaFrance

Deal could be heading for court

Ferry giants P&O has threatened to report Eurotunnel to the European Commission if its plan to buy the ships of the insolvent SeaFrance breaches European competition rules.

P&O Ferries, which accounts for around 30 per cent of traffic on the Dover to Calais route between England and France, gave the warning after Eurotunnel, the Channel tunnel operator, revealed it might buy SeaFrance’s three ships from the company’s administrator.

Jacques Gounon, executive chairman, said his company Eurotunnel would lease the ships – all built in the last five years – to a new operator, possibly formed from a co-operative of SeaFrance’s staff.

France’s Tribunal de Commerce ordered SeaFrance’s liquidation on Monday after it ruled out accepting any of the bids that had been made for the company, owned by SNCF, France’s state-owned train operator.

The company had long been making a loss on the highly competitive route, where its main competitors are P&O, a British registered company but with the government of Dubai as its sole shareholder, Denmark’s DFDS and Eurotunnel, which in recent years has carried around 40 per cent of the traffic on its shuttle trains.

The closure of the company would lead to 127 job losses in Dover and up to 900 more across the Channel.

A lack of investment, rising fuel prices and industrial unrest have all hit the French company hard.

Regular strikes have taken place during Bank Holiday weekends by a militant unionised workforce while freight traffic has decreased due to the economic downturn and Eurozone crisis.

SeaFrance’s vessels have been tied up out of use since the court placed the company in administration in November.

Nicolas Sarkozy, France’s president, has strongly backed efforts to find a way of saving the 1,100 jobs at SeaFrance, whose fate has become a significant issue ahead of April’s presidential election.

He said on Monday: “I believe it is possible to say there will be a credible solution.”

Chris Laming, P&O’s communications director, said it appeared to be a “never-ending battle” to persuade the French authorities that there should be a level playing field between different operators.

“If we felt that competition rules were being breached by our major cross-Channel competitor – Eurotunnel, with 40 per cent of the market – we would complain vigorously to the competition authorities in a bid to protect our own position,” he said.

“But the ball is very much in their (Eurotunnel’s) court.”

Under the Eurotunnel plan, the tunnel operator would purchase the ships as an investment. It would lease them to a new market entrant on a commercial basis.

M Gounon told Liberation, the French daily newspaper which has a leftist editorial stance: “We cannot let the only French company in the port of Calais disappear.”

M Gounon said a co-operative of SeaFrance’s workers was the “most credible” proposition for Seafrance and “the most socially acceptable”. The court, however, ruled out accepting the workers’ bid.

Nathalie Kosciusko-Morizet, France’s ecology and transport minister, said on Monday that France’s Louis Dreyfus Armateurs, which had an earlier joint bid for SeaFrance with DFDS rejected by the court, had proposed adding two of its own ships onto the Dover-Calais route manned by 300 of SeaFrance’s crew.

She said she would discuss the LDA proposal, the Eurotunnel offer and the workers’ cooperative plan – which requires a €50m investment to be viable – with SeaFrance employees.