GBA response to Guernsey Ports 2024 proposed increases in dues & charges

Further to the Consultation paper sent on 29th.August 2023, as requested I am responding on behalf of the Guernsey Boat Owners Association after lengthy discussions with many of our members, including two retired Guernsey Harbourmasters with a wealth of experience in local maritime matters.

Generally we are of the view that these proposed increases in leisure boating mooring fees are extortionate , 50-90% above RPI ( 7.3% in 2024)over 3 years and will decimate our current buoyant marine industry. An industry which contributes annually over £25 million pounds to our local economy and which has seen massive expansion over the last 50 years.

This is why Guernsey has invested in constructing marinas which have proved to be very successful and generated millions of pounds in income to the Island’s economy.

Let’s examine the facts involved.

The Old Harbour, renamed the Victoria Marina, was the first in 1973. This was converted to meet the demand of local boaters who were waiting for a mooring ( 200+) and subsequently taken over by visiting vessels.

This was followed by the Albert Marina in 1978 for the same reasons, at a time when inflation was over 18%! Then came the QE2 in 1989 and the St.Sampsons marina in 2005.

All of these capital projects were financed initially by the States of Guernsey but the deal was that they should not be considered as a commercial project. They were to be self-funding and all revenue and running costs ring-fenced.

These marinas have continued to be very profitable.

In the 2022 Ports Accounts, leisure boating fees showed a revenue stream of £3.3 million and allocated expenses of £2.3 million, resulting in a surplus in excess of £1 million pounds. This has been the case for the past 50 years.

 The income from local berthing fees represents 30% of Harbours revenue.

And the taxpayers’ investment over that same period has been repaid 4 times over.

So, what happened to all this cash?

It was used to cover other harbour costs until the Harbour Holding a/c and the Airport a/c were merged some years ago to pay for the airport rebuild. At that time there was a very healthy balance in the Harbours a/c of many millions of pounds.

These reserves are now empty.

Harbours has never recovered their reserves which historically they used for capital expenditure on maintaining the existing infrastructure around the port and for investment in future projects.

Hence the St.Peter Port harbour is now in a state of disrepair. The Ro-Ro ramps are due to be replaced in the near future , the bridge on the Castle Emplacement is falling down, the New Jetty is weakening and the No.6 Berth at the harbour entrance is crumbling and not fit for purpose.

This is isn’t the fault of the harbour management who have consistently reported the need for major capital repairs but there hasn’t been the political will to get on with the job in hand.

Remember, the R0-Ro ramps carry 95% of our imported goods and if one of these fails, all of us will fell the effects. i.e. Every taxpayer in Guernsey.

If  Gsy. Harbours stops subsidising the Airport then the current marina and other profits could be re-invested into the harbours to cover infrastructure replacement.

It is worth remembering that unlike the Airport, during Covid the harbour continued to receive revenue for harbour operations with the exception of passenger dues and visiting yachtsmen fees. Meanwhile throughout the pandemic the leisure boating owners still paid their mooring fees even though we weren’t allowed to use our boats.

The 2022 a/cs show that last year harbour revenue was up 9% on 2021 with £10.6M. The total revenue including the airport was £21 million.

Combined Expenses were also up by 9% on 2021 at a total of £13.2M. including increases of £0.3M on marina expenses and £0.6M in harbour payroll costs.

Passenger movements increased from c.300,000+ in 2021 to c.880,000+ in 2022 (across both ports). Harbours alone was c.73000+ to c.225000+.

Meanwhile the Airport showed a loss of £5 million pounds.

Effectively the leisure mooring fees have been subsidising the losses at the Airport for a long time now.

One could argue that whilst we appreciate that our fees should be used for the upkeep of our marinas, why should the leisure boating owners be paying for the debts of the Airport? It’s grossly unfair that leisure boat users, are being used ( or frankly abused) to cover these debts.

Surely this should be covered by all of us the taxpayer, not a small minority group of 1350+ boat owners! The Airport is an island-wide facility available to all islanders and operating losses should be covered by general revenue and not a small number of berth holders. The same principle should be applied to any investment or expenses for running the commercial interests of our harbours. Every person in Guernsey benefits from the Ro-Ro ramps, the cranes lifting containers, ferry terminal use, etc. 95% of all our food, clothes, cars etc comes ashore on these ramps.

The effects of these new proposals to find more funds will cause many local boat owners to seriously consider their position . Contrary to common belief, the MAJORITY of boat owners struggle to afford their boats but are passionate about enjoying their boats and the local waters with family and friends.  The increases may not impact the wealthy but it WILL IMPACT the middle and lower income earners.

40% of the marina berths are occupied by boats of 20’ and under. These vessels represent the interests of mariners who mainly use their little craft for potting or fishing or simply for day cruising to Herm. These owners do not spend their hard-earned cash on fancy cars, motor homes, or holidays abroad. This is their main hobby and their way of maintaining a sense of wellbeing.   An increase of £500+ per annum on some of these folk, who maybe on fixed incomes or pensions , will cause them to give up their main pastime after probably 40+ years of boating.

25% of boats are between 21-35’ and the berthing fee increases in this section will rise by 70% if these proposals are passed by our States Deputies.

Not everyone who owns a boat in the marinas is a millionaire! They are local boating enthusiasts who have usually progressed from smaller boats to larger vessels with accommodation and cooking facilities for family holidays within our Bailiwick or abroad. And this section is where we have seen most demand for larger berths since the pandemic.

There is a real risk of boats being sold, removed or left to ruin and become unseaworthy as people struggle to manage with increased costs. There will be a mass movement to try to sell boats, thus devaluing them on the local market. This in turn will result in the 200+ waiting list reducing or even not being required which destroys most of the arguments for the Pool Marina Project to provide 200+ new deep water moorings for local boats and 150 for visiting yachts.

The other risk is that poorly maintained vessels will potentially cause extra problems for our emergency services.

Why target this small group of leisure boatowners?

Simple. Where else can we moor this number of craft in a safe haven locally?

We are a captive market. We represent a major chunk of their revenue stream.

Our economic wizards have employed the services of another independent body who design marinas worldwide and they have reported that the current harbour berthing fees are less than the competing marinas scattered along the South Coast of England, and Jersey.

They use various benchmarks for comparisons between these cited marinas and they actually state that “ St.Peter Port is currently undervalued within the benchmark set but it is acknowledged that the berthing infrastructure & associated facilities and marine trade services are lacking somewhat and prevent Guernsey Ports from increasing existing tariff rates”.

French marinas like Carteret, St. Quay and St.Malo are cheaper than Guernsey. In fact it has been reported that to permanently moor a 50’ vessel in Carteret is 42% cheaper than St.Peter Port. Yes they might be subsidised by EU money but they offer better facilities and value for cash.

The S. Coast marinas stated in this report are mainly privately owned and not run by the local council. These charge higher fees but they are all non-tidal. In other words, they are accessible 24/7 regardless of the height of tide. They offer security, toilets and private parking too.

The Jersey rates include VAT. They also have La Collette marina which is non-tidal.

All of our marinas including Jersey are tidal and mainly accessible 3hours either side of high tide. That’s why the plan to develop the Pool area into a 350+ deep water berth marina, accessible at any state of tide, is so attractive and potentially a huge extra source of revenue for Guernsey.

Local berth holders aren’t complaining about the current state of our marinas. Having spent 8 years as President of the GBA. I can honestly say that the number of security incidents with pilferage or malicious damage to moored boats is minimal. Maybe 5 times in 8 years!

Toilets are available if required around our marinas except for the North sides of the Bridge and the QE2.

Public Parking is not chargeable, available for 10 hours and reasonably close to the gangways. Our GBA members can elect to pay for special parking permits which we rent off the Harbour Authority.

The main area for current concern is that the QE2 marina gates urgently require replacing and we are worried that any future development around the harbours must allow for continued access for off-loading and marine traders use. Just try carrying a boat battery or an anchor up one of the gangways.

 

What is the best solution for all?

We appreciate that the States is searching for more income to carry out these long overdue repairs to St.Peter Port harbour and that these proposals have been produced as a consultation paper.

If the leisure boating berthing fees remain with only increases for RPI, that’s predicted as 7.3% for 2024, and according to many financiers, probably reducing to around 5% for 2025 and 2026, the increase in revenue from our fees alone will be a safe £650,000+ .

Guernsey Ports proposals of RPI + 20-30% p.a. hopes for a £1.2 million by their calculations.

However, we conservatively predict that if these proposed increases are approved by our elected Deputies next January there will be at least a 30% reduction in berth holders.

On current mooring rates that equates to a massive drop in actual revenue of approx.£1,000,000 pounds in 2026 alone against an RPI increase revenue of £600,000+ over the 3 year period.

These figures are based on the majority of boatowners ranging from 0-44’ constituting the main drop in berth holders.( see the table below ).

You don’t need to be a rocket scientist to see that this extra revenue of £600,000 is more reasonable than a disastrous £1,000,000 reduction in income. And that reduction figure is even larger if this drop in berth holders reduces from 2024.

Especially when you consider that the 2022 Ports A/C showed a revenue of £3.3M. and £2.3M expenses. On that basis, Harbours would be working for nothing.

If our prediction is accurate, and believe me I’m not alone in my calculations, the States will end up with an even larger deficit over the next 3 years.

Not only will they destroy the achievements of our predecessors and 50 years of investment in the local marine industry but also marine traders will lay off workers, youngsters will not be encouraged to enter the industry as apprentices, and there will be 300-400 very disgruntled mariners when it comes to our next general election in 18 months time.

And what if the States decide in their wisdom to introduce GST during the next 3 years?

Please apply some good old Guernsey common sense and stick to RPI without disrupting a system that is already proven, working and expanding. As the original planners said 50 years ago, keep the berthing fees affordable.

Be pro-active instead of reactive, borrow the necessary funds and get on with developing the Pool Marina Project which will not only dramatically increase harbour revenues by £8-10 million pounds p.a. but also place Guernsey back on the map as the premier destination for visiting yachtsmen which is where we were 40 years ago.

 

Nick Guillemette.

President of the Guernsey Boatowners Association.

TABLE OF CALCULATIONS.

Increased income from RPI.only.

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2023 rates + 7.3% RPI =   £ 240,900    total income £3,300,000 + 240900  = £3,540,900

2025    “     + 5.0%   “    =  £ 177,000         “           “       3,540,900 + 177045  =   3,717,945

2026    “     + 5.0%   “    =  £ 185,897         “           “       3,717,945 + 185,897 =   3,903,,842

That’s an increase on revenue over 3 years (£3.3M)= £603,842.

With no drop in berth holders.

 

If 30% of boats 0-45’ for sale.

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20’ and under   535 boats   x  30% drop x  £1491 (proposed 2026 fees) = £239,305

21-27’                 384   “              “                x  £2662           “                           =  £306662

28-44’                 323   “              “                x  £4548           “                           =  £440701

Total drop in revenue in 2026 alone   =  £986,668.

If one calculates for 2024 and 2025 reduction in number of berth holders, the above drop in revenue is much greater.