An opportunity was missed to reset the relationship between government and the Steam Packet when the ferry operator was nationalised.
And the Department for Enterprise is best placed to come up with a new sea services framework deal.
These are among the conclusions of a Tynwald committee report on the regulation of the Steam Packet which will be presented to the January sitting of the island’s parliament.
The current sea services agreement, based on the previous linkspan agreement, came into effect at the beginning of 2020.
It is a contract between the Department of Infrastructure and the Steam Packet and enables the department to control aspects such as fares and scheduling, while giving the ferry operator preferential use of the King Edward Pier linkspan at Douglas harbour.
The Steam Packet was purchased by the Manx government in May 2018 with the aim of securing strategic control of the monopoly sea service provider.
But the Tynwald committee report notes: ‘When the company was brought into government ownership, there was no consideration of whether the sea services agreement was the best approach to deliver social and economic value from the service.
‘This was a missed opportunity to reset the relationship between the government and the Isle of Man Steam Packet Company and to ensure that sea services supported the socio-economic well-being of the island.
‘From our perspective, it seems that all the government’s efforts were put towards acquiring the company - steam had run out by the time it came to redesign the sea services agreement.’
The report says the DoI has a potential conflict of interest as both harbour operator and regulator of the sea services agreement.
It suggests that responsibility for developing a new agreement should be transferred from the DoI to the Department for Enterprise.
And it recommends the DfE should establish a working group to develop a new framework for sea services by the end of 2025.
It says the new framework should provide services that support the island’s socio-economic needs and hold the Steam Packet Company to the same ‘high standards expected of all public services’.
The committee agrees with the principle that there should be limited political and government interference in the day-to-day running of the ferry company but says it would benefit from greater direct political support.
‘We think that the Treasury’s interpretation of “arm’s length” is in conflict with its role as a responsible shareholder,’ say the report authors, who add that consideration should be given to moving to a statutory board structure.
Alternatively, they say, Treasury should look at how to enhance its oversight of the Steam Packet, and report back to Tynwald on both options by the end of 2025.