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Corsica to extend ferry concession

Date: 19 Dec 2006 00:00 Source: Lloyds List

THE bitterly contested award of the public service concession for ferry services between the French mainland and the island of Corsica is likely be delayed for at least four months following last week’s decision by the French Council of State to annul the award procedure.

The Corsican transport office said yesterday it would be proposing that the existing concession, which had been due to expire at the end of this month, be extended for four months to allow time for interested parties to submit new bids.

The final decision concerning the timetable for the new round of bidding for the concession will be taken on Friday by the Corsican Assembly but the transport office said it considered that the new concession could come into force from May 1 next year.

The office said it would not be changing the terms of the tender call or the concession specifications, given that they had not been criticised in last Friday’s decision by the Council of State, but would confine itself to inviting fresh bids.

Since the council found that none of the bids submitted under the initial procedure was acceptable, the question now is to know how the three companies in competition for the concession are going to react. SNCM, which needs to win the concession to retain its new principal shareholders Butler Capital Partners and Veolia Transport, indicated that it would be making a new offer and appeared to be ready to consider a joint bid with CMN.

The two traditional allies found themselves in competition after CMN opted not to bid with SNCM for the new seven-year concession. Instead, it submitted a bid for part of the concession on its own account and a second bid jointly with SNCM’s arch-rival Corsica Ferries for the whole concession.

SNCM management board chairman Gerard Couturier said: “If, by necessity, we are obliged to go it alone, we will go it alone. But, if we find an alliance, we will have an alliance.”

Asked if the company was ready to go into an alliance with CMN, he said: “Our hand has always been held out towards CMN.”

CMN, which claimed with Corsica Ferries that the Corsican authorities had been showing favouritism towards SNCM, was more non- committal, however, saying that the alliance question would need “analysis and reflection” once the Corsican Assembly had made known its intentions with regard to the new round of tenders. The company was nevertheless jubilant at having escaped coming under SNCM control after the Paris court of appeal overturned a lower court ruling that existing majority shareholder STEF-TFE should give up control of the company to SNCM under the terms of a shareholder pact signed in 1992.

The appeal court, which also gave its judgement on Friday, said Stef-TFE had been within its rights in withdrawing from the pact unilaterally earlier this year.

Corsica Ferries, which has dethroned SNCM as the leading passenger carrier between the French mainland and Corsica, also hailed the Council of State’s decision, saying it had taken three judicial decisions to “bring down the Great Wall of China built to prevent the arrival of competitors” in the Corsican ferry market.

Chief executive Pierre Mattei argued that the concession specifications should be revised, however, to ensure that the award procedure was carried out with maximum transparency.

He argued, in particular, that the concession should be open to bids on a service-by-service basis so as to ensure that the Corsican authorities are able to choose the “best combination”.

For more information, please visit our Ferries to Corsica page.

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