Eurotunnel

 
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

Eurotunnel has made a preliminary submission to run the ports of Calais and Boulogne.

The submission is within the framework of a new 50-year public service concession to be awarded by the Nord Pas-de-Calais Regional Council, which owns the two Channel ports, a source familiar with the tender process has confirmed to Lloyd’s Loading List.com.

However, the source added that that the Côte d’Opale Chamber of Commerce, which currently runs Calais and Boulogne, had also officially declared its interest in operating the new concession.

“It’s not known at this stage whether the two candidates will be acting independently, in tandem or with other partners. Provision is made for the Council to designate the operator of the new Calais-Boulogne ports concession during the course of 2013 or early 2014,” the source said.

The Côte d’Opale Chamber of Commerce declined to comment while no one could be reached at the Regional Council.

In March last year, Lloyd’s Loading List.com reported that Eurotunnel chief Jacques Gounon had proposed to the Chamber and its president, Jean-Marc Puissesseau, that Eurotunnel be a minority partner in the bid for the new concession.

Gounon said: “It is my conviction that the three local structures - the ports of Boulogne and Calais and Eurotunnel, as a dry port - must have a coherent development policy. And why not include the state-owned port of Dunkirk too?”

A Eurotunnel spokesman said: “Our core business being the management of infrastructure, it’s quite natural that we are interested in running these ports.”

Full port management would represent even greater diversification for the Eurotunnel group.

Over the past few years, its rail freight subsidiary, Europorte, has won contracts to manage, operate and maintain rail infrastructure linking a number of French ports to the national network.

The ports include Paris, Bordeaux, Strasbourg, La Rochelle, Dunkirk, Nantes Saint-Nazaire and Le Havre.

Last June, Eurotunnel acquired three ex-SeaFrance ferries which it subsequently leased out to new Calais-Dover cross-Channel operator, My Ferry Link.

The operator of the new ports concession would oversee the Calais 2015 Port Project, piloted by the Regional Council and which is set to attract investment of between €400 million and €500 million.

The major upgrade will include a new 130ha dock within its first phase, in order for the port to be able to accomodate new-generation vessels. The first phase will also include the building an additional 90ha of parking space for trucks and vehicles operating the port.

Sponsored advertisement

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

P&O Ferries has slammed Eurotunnel’s bid to run the ports of Calais and Boulogne ports as “beggaring belief”.

Last week, Lloyd’s Loading List.com reported that Eurotunnel had made a preliminary submission to run the two Channel ports ­– owned by the Nord Pas-de-Calais Regional Council – within the framework of a new 50-year public service concession.

The Côte d’Opale Chamber of Commerce, which currently runs Calais and Boulogne, also declared its interest in operating the new concession.

P&O spokesman Brian Rees  told Lloyd’s Loading List.com that Eurotunnel taking the reins at Calais would represent “a very serious conflict of interests”, raising competition and regulation issues.

He said: “We’d have a situation where the group with the biggest share of cross-Channel trade [Eurotunnel] would be running a key port, where its own ferries are operating [as My Ferry Link] and where P&O Ferries, its biggest competitor, has the core of its business.

“It’s unimaginable. The [EC] competition authorities would be pricking up their ears. Eurotunnel diversifying is one thing but this would be a big step too far.”

A Eurotunnel spokesperson said: “Our candidacy is a logical step in the development of the group, as we already manage infrastructure in the form of the 50km Channel Tunnel. Calais is an important traffic hub and we would bring a new vision of port management from a private sector perspective and one focusing on development."

Conservative MP for Dover and Deal Charlie Elphicke told the BBC this week: “Eurotunnel effectively owns the [defunct] Seafrance ferry company. Now they want to own the French ports of Calais and Boulogne.

“I am deeply concerned that this is too much control of the cross-Channel freight market in the hands of one operator."

The situation should be investigated by the EC Competition Commission and Regulator, he added.

Eurotunnel is already the subject of a competition commission investigation, following a UK Office of Fair Trading referral in the autumn. This focuses on the acquisition of three ferries and other assets of the collapsed cross-Channel operator, SeaFrance,

The commission is expected to report by 14 April.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

&O Ferries has written to the UK Office of Fair Trading (OFT) with its “concerns” at Eurotunnel’s bid for control of the ports of Calais and Boulogne.

Last month, Lloyd’s Loading List.com reported that Eurotunnel had made a preliminary submission to run the two ports within the framework of a new 50-year public service concession to be awarded by the Nord Pas-de-Calais Regional Council.

P&O made a swift riposte, saying any move by Eurotunnel to take the reins at Calais would represent “a very serious conflict of interests”, raising competition and regulation issues.

Now, in a seven-page letter to the OFT, P&O Ferries CEO Helen Deeble sets out the company’s opposition in detail, claiming the award of the concession to Eurotunnel would “likely to result in a substantial lessening of competition in the provision of shortsea transport services between the
UK and France”.

She calls on the OFT to carry out an investigation.

P&O Ferries argues that the deal “will comprise a qualifying merger in the UK upon the basis that the ports of Calais and Boulogne would cease to be distinct from Eurotunnel; ?70 million of UK derived turnover is acquired; and/or more than 25% of France-based French shortsea transport services for ex-UK ferry traffic is or will be provided by a single entity [Eurotunnel]”.

The letter adds that control of the ports “will strengthen Eurotunnel’s position in the market for cross-Channel transport and have “anti-competitive effects”, such as raising rivals’ costs, a reduction in the appeal of ferry services and a reduction in the growth potential of ferry traffic.

Eurotunnel faces competition from incumbent, the C?te d’Opale Chamber of Commerce, in its bid to run Calais and Boulogne. The new concession could be awarded later this year or early 2014.

Eurotunnel is already the subject of a competition commission investigation, following a OFT referral in the autumn. This focuses on the acquisition of three ferries and other assets of collapsed cross-Channel operator SeaFrance. The commission is expected to report by 14 April.

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

PARIS (Reuters) - Channel tunnel operator Eurotunnel said it would challenge a U.K. watchdog's view that its takeover of three ships owned by failed ferry operator SeaFrance would hamper competition on cross-Channel services.

             The U.K. Competition Commission said earlier on Tuesday that passengers and freight customers could face higher prices with the arrival of MyFerryLink, a ferry service Eurotunnel launched using the three former SeaFrance vessels.

             The group last year branched out into sea transport with the 65 million euro ($87 million) purchase of three of the ships formerly operated by SeaFrance, a unit of French railway operator SNCF that went into liquidation in early 2012.

             France's antitrust watchdog cleared the deal in November.

             "Eurotunnel intends to continue to work with the Competition Commission to allay the concerns raised by existing ferry operators," Chief Executive Jacques Gounon said in a statement.

             Eurotunnel operates the vehicle shuttle services in the Channel tunnel between Britain and France and earns revenue on other freight and passenger trains that pass through the tunnel.

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed


Groupe Eurotunnel to challenge competition commission's provisional findings
21. February 2013  



The EU's competition commission has announced its provisional findings in relation to the acquisition by GET SA of assets previously owned by SeaFrance and the creation of a new competitor in the cross-Channel market, MyFerryLink. Eurotunnel is not surprised at the position of the competition commission, but will challenge the latter's provisional findings which conclude that the addition of the new operator, MyFerryLink, would be detrimental to competition and could lead to an increase in prices. The Groupe says it appears that the existing ferry operators in the short straits market have sought to use the process initiated by the British competition authorities to protect their own interests from new entrants and increased competition. (ben)

http://www.eurotunnelgroup.com



  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

The UK and France could be set for a legal wrangle over Eurotunnel’s acquisition of three ex-SeaFrance ferries last year.

The vessels are operated on the Calais-Dover crossing by Eurotunnel subsidiary MyFerryLink (MFL), which launched services last August.

This month, the UK Competition Commission (CC) announced provisional findings on the acquisition, concluding that it could result in cross-Channel freight customers facing higher prices.  

CC Deputy Chairman Alasdair Smith, who chaired the Eurotunnel/SeaFrance inquiry group, said: "Given that the company already holds a market share of over 40%, we’re concerned that customers could lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services."

It would appear unlikely that the UK CC’s position will change when it publishes its final report by 14 April, which could put it on a collision course with French counterpart Autorit? de la Concurrence, which in November gave its approval to Eurotunnel’s acquisition of the ferries – subject to certain conditions being met for freight traffic.

These focus on Eurotunnel undertaking to separate its rail freight rate offering from that relating to sea freight and for a period of five years not offer discounts on rail freight rates to customers who also use MFL.

Compare this with the tougher line taken by the CC which, in addition to its provisional findings, published a notice of possible remedies outlining ways of addressing the anti-competitive effects of the acquisition.

Foremost among them is the divestiture of the MFL business or its assets, including the three vessels, which in the CC’s view would be “likely to be effective in addressing a substantial lessening of competition”.

Eurotunnel is contesting the CC’s provisional findings.

A spokesperson told Lloyd’s Loading List.comConfused“Based on the expert analysis of its legal teams, the French regulator has rendered a definitive ruling and given the go-ahead for the launch of MFL after the acquisition of the vessels by Eurotunnel. There is no reason why this should be ignored.

"In our view, the entry of a new competitor on the cross-Channel trade, in the shape of MFL, strengthens competition and increases customer choice.

“If customers choose to use MyFerryLink, it’s because there is real demand for an alternative operator."

Eurotunnel also argues that it would not be legally possible to sell the ferries, as this is prohibited under the terms of the judgement of the Paris commercial court which approved the acquisition

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

Channel Tunnel operator Groupe Eurotunnel SA's plan to boost cargo revenue by running ferries alongside the 30-mile subsea rail route risks unraveling amid opposition from antitrust regulators and shipping companies.

Eurotunnel must decide next week whether to bid for the French ports of Calais and Boulogne to complement its ferry unit. Creating that business has been hampered by opposition from the UK Competition Commission, while Britain's P&O Ferries says the harbor purchase would hurt competition in one of the world's busiest cross-border freight markets.

Eurotunnel spent 65 million euros ($82 million) in 2012 buying three roll-on roll-off ferries from state railway SNCF's defunct SeaFrance arm in a bid to lift its 43 percent share of the 3.36 million trucks that cross between Britain and France at their closest point each year. The takeover of the French ports, mooted last month, would lay foundations for a wider business tapping all forms of transport across the Channel.

"If this were to develop into a full bid to operate the ports I'd imagine Eurotunnel would not have many friends at the Competition Commission, given what they had to said about the ferry business, because it does bring up some issues," said Andrew Jones, an analyst at RBC Capital Markets in London who rates the stock "outperform."

The Nord Pas-de-Calais Regional Council, which is auctioning a 50-year concession to run the harbors, located 20 miles apart on the Dover Strait, wants binding bids by March 9.

P&O wrote to the UK Office of Fair Trading on Jan. 8, saying a sale to Eurotunnel would result in a "substantial lessening of competition" by giving the tunnel owner control of two of the three French ports serving the so-called short-sea market with the UK, leaving Dunkirk as the sole independent.

Eurotunnel Chief Executive Officer Jacques Gounon said last week he'd contest the UK regulator's findings regarding last June's purchase of SeaFrance vessels Berlioz, Rodin and Nord- Pas-de-Calais, which operate under the MyFerryLink brand.

A shipping arm would complement Eurotunnel's rail shuttle, with trucks using ferries in the event of the tunnel being restricted, and vice versa, Gounon said when he bought the ships.

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed

Eurotunnel has written to the UK’s Competition Commission (CC) defending the threat to its ferry operation.

In its provisional findings last month, The CC suggested Eurotunnel’s ferry operation could lead to a reduction in competition across the Channel and concluded that it would be necessary for MyFerryLink to quit the market.

The CC said it believed cross-Channel freight customers could face higher prices following Eurotunnel’s acquisition of three ferries from collapsed ferry operator SeaFrance and the launch of MFL last year.

CC Deputy Chairman Alasdair Smith, said: "It would seem that Eurotunnel moved into the ferry business because it was concerned at the increased competition it would face if another operator bought the assets.

“Given that the company already holds a market share of over 40%, we’re concerned that customers could lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services.

Now Eurotunnel has written to the CC contesting this analysis. Its letter states:?“Groupe Eurotunnel is surprised to find that, in order to maintain competition, it is first necessary that one operator disappear from the market.

“Following the liquidation of SeaFrance, Groupe Eurotunnel took part in an open and transparent tender process for the assets of the defunct company, organised by the Paris Commercial Court.

“Following an in depth analysis by the French competition authorities, the acquisition was approved with certain restrictions.”

Eurotunnel says it believes the launch of MFL had, in fact, “increased competition in the ferry market”, adding that rival operator DFDS had recently stated that it had multiplied its activity in the short straits by a factor of six and had confirmed its long-term commitment to the market.

“MyFerryLink currently represents 4% of the Dover-Continent truck market, compared with 32% for P&O and 22.4% for DFDS,” Eurotunnel says in its letter.

“Maintaining MyFerryLink, which is targeting a market share of just 8%, can only be positive for customers who have, in research conducted by the Competition Commission itself, declared their satisfaction with the arrival of a new competitor.”

The CC also published a notice of possible remedies to the “anti-competitive effects of the acquisition”, including the divestiture of the MFL business or its assets, including the three vessels.

But Eurotunnel says:?“The Paris Commercial Court included, in the sale agreement for the SeaFrance assets, a prohibition on the sale or any form of alienation of the ships in order to protect the jobs created by the establishment of the new company in both France and the UK.

“Groupe Eurotunnel is confident that the Competition Commission will not prescribe restrictions which would be disproportionate or legally inapplicable.”

The CC is expected to publish its final report by 14 April.

  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Eurotunnel will not be bidding to run the ports of Calais and Boulogne-sur-Mer leaving the incumbent operator, the Côte d’Opale Chamber of Commerce, as the sole candidate.
The deadline to tender for the new 50-year management concession, issued by the Nord Pas-de-Calais Regional Council, which owns the two French Channel ports, passed on 19 March without Eurotunnel making a bid.

Contacted by Lloyd’s Loading List.com, a Eurotunnel spokesperson said: "We expressed a strong interest (in running the ports) and remain committed to working with the Regional Council, the port of Calais and perhaps public and private sector investors too, in order to better co-ordinate efforts to develop Calais.and Boulogne."

In January, Lloyd’s Loading List.com reported that Eurotunnel had made a preliminary submission to run Calais and Boulogne.

A Eurotunnel spokesperson said at the time: “Our candidacy is a logical step in the development of the group as we already manage infrastructure in the form of the 50km Channel Tunnel. Calais is an important traffic hub and we would bring a new vision of port management from a private sector perspective and one focusing on development."

Speaking in the Voix du Nord newspaper, the president of the Régional Council, Daniel Percheron, played down suggestions that Eurotunnel’s decision not to submit a bid to run Calais and Boulogne reflected an unwillingness to work with the Côte d’Opale Chamber of Commerce.

"Eurotunnel has a winning strategy and it’s possible it feared that in the event of being awarded the concession would raise questions of a cross-Channel monopoly position. Who knows? But there’s a strong chance that Eurotunnel and the Chamber will end up co-operating."

Eurotunnel’s interest in running the two ports had drawn a swift riposte from P&O Ferries. It warned that Eurotunnel taking the reins at Calais would represent a very serious conflict of interest, raising competition and regulation issues.

Last month, P&O Ferries CEO, Helen Deeble, penned a seven-page letter to the UK’s Office of Fair Trading claiming the award of the concession to Eurotunnel would “likely result in a substantial lessening of competition in the provision of shortsea transport services between the UK and France.”

She called on the OFT to carry out an investigation.

Commenting on the latest development, P&O Ferries’ spokesman, Chris Laming said: "We’re pleased to hear that Eurotunnel appears to have had a change of heart and it’ll be interesting to find out what the rationale is for its decision."
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
decided not pursue its interest in running the ports of Calais and Boulogne because of lack of support and also hostility to the move, group chairman and CEO Jacques Gounon (pictured) has revealed.
Gounon told a French newspaper: “I came to recognise the strong bond between the Côte d’Opale Chamber of Commerce [the incumbent operator] and its staff and that clearly there was no support for a change. I concluded that the conditions just weren’t there for the move to succeed.”

But this was not the only reason, he said, alluding to what he called “the great hostility from the maritime sector towards Eurotunnel, which I’m made aware of every day, that would like us to remain below ground and stick to running the Channel Tunnel. But this is not how we see the way forward for the group”.

In the light of such hostility, Gounon said he had thought it best to abandon plans for the bid.

While Gounon has given up on the idea of Eurotunnel running the ports at Calais and Boulogne, he remains interested in the group being a minority stakeholder in the new operating company whose constitution makes provision for the inclusion of private sector partners.

“I intend to propose that we participate in the company because I have ideas and a vision for the development of the ports," he said.

“To give one example, MyFerryLink [Eurotunnel’s ferry operation] recently took part in a meeting in Dunkirk on the theme of maritime pollution and lent strong support to the move to liquified natural gas (LNG) to power ferries and consequently the need to set up dedicated [LNG] facilities at Calais. On this issue and on others, Eurotunnel has proposals to put forward.”

Another issue Gounon would put on the agenda is redressing the imbalance between competitively-priced Calais and chronic loss-maker Boulogne.

He suggested this could partly be remedied by increasing the port duties at Calais, which he claimed were relatively low.

“This would relieve Boulogne and take off some the financial pressure on [owner] the Regional Council.

“Evidently, in making such a proposal I’m not favouring my own camp, as in all likelihood MyFerryLink would not benefit from it.”

As to whether, Eurotunnel would be welcomed as a minority stakeholder in the new ports management company, Gounon said: “I’ve made it very clear that we are ready to make a constructive contribution and are certainly not looking to generate conflict.

“I can’t see how a major economic player such as Eurotunnel wouldn’t be welcome. The offer is on the table and must be seized.”
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
The UK Competition Commission (CC) has extended the deadline for publication of its final report on Eurotunnel’s acquisition of three SeaFrance ferries last year, admitting the process is complicated.
It has extended the deadline from 14 April to 9 June and published a supplementary remedies notice.

The ferries are currently operated on the Calais-Dover crossing by Eurotunnel subsidiary MyFerryLink (MFL), which launched services last August.

In provisional findings, the CC said the acquisition “could result in a substantial lessening of competition”, and put forward the sale of the MFL business or its assets, including the three vessels, as a possible remedy.

The supplementary remedies notice sets out some of the “complications” of the case – chief among them, a spokesman for the regulator said was that a ‘sell order’ would fly in the face of a French Commercial Court Order which prohibits the sale of the ships for five years.

He added: “It seems likely that a divestiture order would need approval from that court."

The court order took into account “the low price offered and the financial consequences of a possible change of flag”, and aimed to “to avoid any speculative transaction to the detriment of the creditors”.

The CC stressed that it had considered the arguments raised by Eurotunnel and the co-operative of ex-SeaFrance staff (SCOP) working on the MFL service, on the possibility of a sell order.

It said: “The CC’s current understanding is that a request to the court is only likely to be successful if it takes into account the employment prospects of the SCOP members and avoids any speculative transaction to the detriment of the creditors of SeaFrance.

“For these reasons, the CC considers that a purchaser may need to be identified before a request is made to the court. The CC has received no evidence to suggest that the consequences of changing the flag of the vessels remain an issue."
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Eurotunnel is said to be ready to separate the group’s cross-Channel ferry arm, MyFerryLink (MFL), from its core business in a bid to satisfy the UK Competition Commission (CC) which argues that the acquisition of three SeaFrance ferries last June raised competition issues.  
Last month, the CC extended the deadline for publication of the conclusions of its investigation into the purchase of the ships until 9 June, but issued a supplementary remedies notice.

In provisional findings, the CC said the acquisition “could result in a substantial lessening of competition”, and put forward the sale of the MFL business or its assets, including the three vessels, as a possible remedy.

The supplementary remedies notice sets out some of the “complications” of the case – chief among them being that a sell order would appear to fly in the face of a French commercial court order prohibiting the sale of the ships for five years.

But the CC has raised the possibility of the vessels being sold in 2017.

Contacted by Lloyd’s Loading List.com, a Eurortunnel spokesperson said the group would not be making any comment ahead of the CC’s decision.

But in a letter to the CC, Eurotunnel proposes to transfer MFL’s commercial teams to the co-operative of ex-SeaFrance workers operating the vessels, as well as the total separation of Eurotunnel’s business and that of MFL, according to a recent report in the French media.

In the letter, Eurotunnel says "relinquishing the vessels after June 2017 would be unrealistic, disproportionate and contrary to the opinion of the French competition regulator”, and lead to “a reduction in consumer choice and without doubt an increase in ferry rates”.

The letter also reveals that Eurotunnel continues to contest the CC’s view that the acquistion of the ferries prejudices fair market competition, claiming this has not been proven.

It goes on to dismiss the idea of price controls, "which to an extent run contrary to the economic principles on which the tunnel concession is founded. Eurotunnel is against any proposal to control prices".

It also argues that there would be little or no prospect of a buyer for the ex-SeaFrance ferries or MFL and that, in the event of a change of ownership, the 400 staff employed by the workers co-operative would very likely lose their job guarantees.

Eurotunnel could appeal the CC’s decision before the Competition Appeal Tribunal.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
P&O Ferries and DFDS Seaways have both called on the UK Competition Commission to ban Eurotunnel from operating a rival cross-Channel ferry service and each wants the opportunity to purchase at least one of the MyFerryLink vessels.
In their submissions to the commission, each of the two rival operators claim the other should not be allowed to purchase one of the former SeaFrance ferries.

The commission is investigating Eurotunnel’s acquisition of three ex-SeaFrance ferries last June and the subsequent setting up of MFL to operate them, raising competition issues on the shortsea route. It is due to render its conclusions by 9 June.

“Eurotunnel should not be allowed to engage in any ferry activities, directly or indirectly, on the Dover-Calais route for 10 years," DFDS demands in its submission.

It adds that the divestment of at least one vessel, as well as the cessation of MFL’s operations must take place before 1 July.

For its part, P&O Ferries says prohibiting MFL from operating on the shortsea would be its “preferred option".

The commission also favours divestiture of the vessels, but has highlighted that this may not be possible until 2017 due to a French Commercial Court Order which prohibits the sale of the ships for five years.

However each of the operators say they would be in the market to acquire at least one of the ferries and has told the commission the other should not be allowed to.

In its submission, DFDS says: “P&O’s strong market position and market power on the Dover-Calais route makes it an unsuitable purchaser. Consequently, we believe that a divestment to DFDS would allow for the most effective and comprehensive alternative in addressing the adverse effects of the merger."

P&O takes the opposite view, underlining that legal advice it has sought indicates that it could purchase/charter at least one of the MFL vessels, "particularly given the  recent decrease in P&O market shares and increase in DFDS market shares.”

But it adds: "However, the process of going through the French courts (particularly if the potential purchaser was a non-French company) is likely to be a slow one and one fraught with uncertainty and difficulty."

Short of the sale of assets before 2017, P&O recommends "behavioural remedies" in the interim period including "capping market share for the joint MFL/Eurotunnel business."

In its submission to the commission, as reported on Tuesday by [i]Lloyd’s Loading List.com[/i], Eurotunnel is reported to have proposed "the strict separation of the commercial teams of Eurotunnel and the maritime activities."

This would include the transfer of commercial teams from MFL to the workers’ co-operative which operates the service.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
The UK Competition Commission (CC) today issued a judgement prohibiting Eurotunnel from engaging in cross-Channel ferry activities. The operator said it would appeal.
Eurotunnel described the CC’s decision as “incomprehensible”, “seriously disproportionate” and “not based on any concrete facts", adding that it ignored the ruling of the Paris Commercial Court linking the sale of the assets of SeaFrance with a requirement not to re-sell them for a period of five years, and is in contradiction with the decision of the French Competition Authority.

In its final report, the CC has concluded that, by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to over half and prices would rise. This confirms the CC’s provisional findings which were published in February, the regulator said.

The regulator said: “Before the prohibition at Dover takes effect, Eurotunnel will be given a limited period (six months) to sell its two largest ferries to one or more purchasers approved by the CC as a means of solving the competition problem that the CC has found. This will ensure that all Dover-Calais ferry services are run by companies which are independent from the competing rail link.”

Chairman of the Eurotunnel/SeaFrance Inquiry Group and CC Deputy Chairman, Alasdair Smith, said: ‘It cannot be good for competition when Eurotunnel, which already holds a market share of over 40%, moves into the ferry business – particularly when it did so to stop a competitor from buying the ferries.

“Customers would lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services.”

Eurotunnel acquired three ferries and other assets from the collapsed SNCF-owned SeaFrance in June last year and set up its own ferry arm, My FerryLink, and launched a Dover-Calais service in late August. The vessels are run by a workers co-operative of ex-SeaFrance workers.

Groupe Eurotunnel Chairman and CEO Jacques Gounon said the CC’s decision “will reduce the choice of services across the Straits of Dover to the detriment of the consumer. It will inevitably lead to an increase in the price of a crossing”.

Quizzed on the “conflict” over the issue between the CC and its French counterpart, which gave Eurotunnel’s purchase of the SeaFrance assets the green light, subject to certain conditions, a CC spokesman told Lloyd’s Loading List.com: "We’ve come to different decisions than other authorities before, including one when we cleared a merger and the French ordered a sale.

“You respect each other’s right to come to a different view.  It doesn’t stop us taking action in relation to the UK market.”

Eurotunnel’s appeal will be to the UK Competition Appeal Tribunal, not to the EU, which hasn’t examined the merger.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
LONDON (Reuters) - The Competition Commission has barred France's Groupe Eurotunnel from docking its ferries at Dover for at least two years due to concerns its purchase of three ferries would allow it to dominate over half of the market.

The channel tunnel operator branched out into sea transport last year with its 65 million euro (55 million pounds) purchase of three ferries formerly operated by SeaFrance, a unit of French railway operator SNCF that went into liquidation in early 2012.

The Competition Commission said that Eurotunnel's move was motivated by concerns that Danish ferry operator DFDS Seaways would buy the vessels cheaply and drive down prices for customers. The other operator on the Dover-Calais crossing is P&O Ferries.

"It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 percent, moves into the ferry business-particularly when it did so to stop a competitor from buying the ferries," said Alasdair Smith, the Commission's deputy chairman.

"Customers would lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services," he said.

France's antitrust watchdog cleared the deal in November.

The Dover-Calais ferry crossing cuts across the Dover Strait, one of the world's busiest international seaways which is used by over 400 commercial vessels daily. It competes for passengers and freight customers against the Channel Tunnel rail link which Eurotunnel operates.

The watchdog has now given the channel tunnel operator a limited period to sell its two largest ferries to one or more approved purchasers before the ban takes effect. It decided against ordering Eurotunnel to sell the three ferries as the French Commercial Court had prohibited a sale until 2017.

A spokesman for the Commission said that given the French ban on a sale, Eurotunnel would need to appeal to the French court in order to sell the two ferries. The two vessels will be barred from Dover for ten years if Eurotunnel does not sell them.

It also said it was likely that one of the ferry operators would exit the Dover-Calais route should the Commission not take action due to excess capacity.

Eurotunnel said it would appeal the decision.

"This decision by the Competition Commission will reduce the choice of services across the Straits of Dover to the detriment of the consumer. It will inevitably lead to an increase in the price of a crossing," said the company's Chief Executive Officer Jacques Gounon.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Channel tunnel operator Eurotunnel is being banned from operating ferry services from Dover amid fears it could use its dominance of cross-Channel transport to hike prices.

The Competition Commission said Eurotunnel's MyFerryLink venture saw it control more than half of the cross-Channel market and said it needed to take action to protect consumers.



Eurotunnel launched MyFerryLink last August with services between Dover and Calais after it snapped up three boats from collapsed operator SeaFrance.

But the commission said it believed Eurotunnel only bought the boats to prevent ferry group DFDS/LD from buying them at a cut price and driving down prices for passengers.
It also said it feared one of the current ferry operators was likely to quit in the short tem, which could hand Eurotunnel an even bigger share of the market.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Groupe Eurotunnel will next week be in court to present its appeal against a UK Competition Commission (CC) decision earlier this month banning it from engaging in cross-Channel ferry activities.  
Confirming its provisional findings published in February, the CC concluded that, by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to over half and prices would rise.

The regulator said: “Before the prohibition at Dover takes effect, Eurotunnel will be given a limited period (six months) to sell its two largest ferries to one or more purchasers approved by the CC, as a means of solving the competition problem that the CC has found. This will ensure that all Dover-Calais ferry services are run by companies which are independent from the competing rail link.”

Eurotunnel launched a Dover-Calais ferry service last August, operated by subsidiary, My FerryLink, using three ex-SeaFrance vessels.

The group will submit its case before the Competition Appeal Tribunal in London on 24 June.

In its Summary of Application (SoA) to the Tribunal, Eurotunnel said the Commission had "acted unfairly" in not providing important parts of its provisional findings and key evidence it relied upon, "thereby materially prejudicing the group’s ability to defend itself."

The "failures" concerned critical issues including "whether a supplier of ferry services was likely to exit from the Dover-Calais route and, if so, whether DFDS would exit and when it would exit, and whether an indicative price rise (IPR) analysis and an upward price pressure analysis (GUPPI) provided an indication that any lessening of competition caused by the Transaction was expected to be “substantial.”

It highlighted that the Commission found that DFDS would exit from the market in the short term, "relying significantly upon evidence from DFDS that prima facie was self-serving and innately questionable whilst, at the same time, the Commission failed to inquire into or consider evidence (including evidence on the file of the French Competition Authority) that would have cast doubt upon its finding [that DFDS would exit]."

The Commission imposed a remedy (including an onerous non-compete restriction) which went beyond that which was needed to address the substantial lessening of competition based upon its own fact finding and reasoning and, as such, was "disproportionate," the SoA added.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Eurotunnel has declined an offer to take a minority stake in the new concessionary company operating the ports of Calais and Boulogne-sur-Mer.  
The Channel ports are owned by the Nord Pas de Calais Regional Council.

Earlier this year, Lloyd’s Loading List.com reported how Eurotunnel had finally ruled itself out of bidding to run the ports, leaving incumbent operator, the Côte d’Opale Chamber of Commerce, as the sole candidate to tender for the new 50-year management concession.

However, Eurotunnel chief Jacques Gounon had indicated that the group remained interested in being a minority stakeholder in the new company, saying he had “ideas and a vision for the development of the ports”.

The Chamber has officially invited Eurotunnel to take a 5% stake in the operating company, but a group spokesman has told Lloyd’s Loading List.com the offer had been turned down.

He explained: "Eurotunnel had reservations on the stake for three main reasons:

  • the steep rise in investment costs relating to the Calais Port 2015 development project from €500 million to €700 million (to be financed by stakeholders), with no guarantee that they would not rise further;
  • the totally unrealistic traffic forecasts put forward by the Chamber on which the project is gauged;
  • and thirdly, the dual structure of the operating company, with the separation of management and investment responsibilities, which Eurotunnel considered to be a source of potential contention and conflict.”

The Nord Pas de Calais Regional Council is expected to officially announce the operator of the new concession, which will take effect at the beginning of 2014, on 4 July.

Separately, the Competition Appeal Tribunal will convene on 10-11 September 2013 to hear Eurotunnel’s appeal against a UK Competition Commission decision earlier this month banning it from engaging in cross-Channel ferry activities.

In its Summary of Application submitted to the tribunal this month, Eurotunnel said the commission had "acted unfairly" in not providing important parts of its provisional findings and key evidence it relied upon, "thereby materially prejudicing the group’s ability to defend itself".
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Almost 16,000 passenger vehicles carried on Eurotunnel Passenger Shuttles in one day


 20.08.2013   [img]http://www.transportweekly.com/visual/mailto.gif[/img] [img]http://www.transportweekly.com/visual/printto.gif[/img]


Eurotunnel’s Le Shuttle saw record traffic last weekend. On Saturday 17 August, 15,982 vehiclesi, including 168 coaches travelled in both directions between Folkestone, in Kent, and Coquelles, in the Nord Pas?de?Calais, breaking the existing record for the heaviest traffic ever seen in one day since Le Shuttle opened for commercial service in 1994.
To cope with this unprecedented volume of traffic, 151 Shuttle departures were organized, sometimes at a rate of up to one every 12 minutes. Meanwhile, thanks to the efficiency of the French and British border administration, passengers passed rapidly through the frontier controls, and were able to board their departure in plenty of time.
This is the third time this year that the 15,000 vehicle ceiling has been broken, a clear sign that customers value Le Shuttle’s 35 minute journey across the Channel and that our British customers have an ever increasing desire for travel.
Jacques Gounon, Chairman and Chief Executive of Groupe Eurotunnel, stated: “This considerable volume of cross?Channel traffic, a first in the history of our company, was achieved through the long term collaboration established with the staff at the border and frontier security control points.”
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Teams of lawyers representing Eurotunnel and its subsidiary MyFerryLink (MFL) will over the next two days try to convince the UK’s Competition Appeal Tribunal in London to overturn the Competition Commission’s (CC) decision prohibiting their clients from operating cross-Channel ferry services.

MFL launched a Dover-Calais ferry service in August 2012 using three ex-SeaFrance vessels.

In June this year, the CC concluded that, by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to over half and prices would rise, prejudicing fair market competition.

The UK regulator said: “Before the prohibition at Dover takes effect, Eurotunnel will be given a limited period (six months) to sell its two largest ferries to one or more purchasers approved by the CC, as a means of solving the competition problem that the CC has found. This will ensure that all Dover-Calais ferry services are run by companies which are independent from the competing rail link.”

MFL’s argument will focus largely on claims that it is a distinct entity from Eurotunnel both operationally and commercially.

It will also highlight that the CC’s decision ignored the ruling of the Paris Commercial Court linking the sale of the assets of SeaFrance with a requirement not to re-sell them for a period of five years and also contradicts the decision of the French Competition Authority in November 2012.

The Tribunal’s verdict is expected at the end of October.

Earlier this summer, Eurotunnel chairman and CEO, Jacques Gounon, warned that if MFL was banned from sailing, the price of a (Channel) crossing by ferry would increase significantly.

He added that he "could not believe" the Tribunal would validate the CC’s verdict.

Just over one year on from its maiden voyage, MFL has captured 10% of the freight market on the Calais-Dover crossing behind P&O Ferries and DFDS.

It employs 500 staff in France and 100 in the UK.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
The UK’s Competition Appeal Tribunal (CAT) has announced that judgement will be handed down on 4 December on Eurotunnel/My Ferry Link’s (MFL) appeal against the Competition Commission’s decision banning it from operating ferry services on the Dover strait.
MFL launched services between Dover and Calais in August 2012 using three ex-SeaFrance ferries.

In June this year the CC concluded that, by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to over half and prices would rise, prejudicing fair market competition.

The UK regulator said that a solution to the competition problem was for Eurotunnel to sell its two largest ferries to one or more purchasers approved by the CC.

It would be given a limited period (six months) to do so before the prohibition at Dover took effect.

Eurotunnel appealed, describing the CC’s decision as “incomprehensible," "seriously disproportionate” and “not based on any concrete facts," adding that it ignored the ruling of the Paris Commercial Court linking the sale of the assets of SeaFrance with a requirement not to re-sell them for a period of five years, and also contradicting the decision of the French Competition Authority.

Reports in the local media in northern France point to meetings held between the French and UK governments to resolve the matter raising hopes that the judgment may recommend a compromise agreement which will allow MFL to continue on the Dover-Calais crossing while clarifying the terms of Eurotunnel’s financial support to its subsidiary.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
LONDON (Reuters) - French transport firm Groupe Eurotunnel, which operates the undersea rail link between Britain and France, has successfully appealed against an antitrust ruling stopping it from also running ferries between Calais and Dover.



Britain's Competition Commission in June issued the two-year ban on Eurotunnel docking its ferries at Dover, citing concerns the company would dominate the Channel crossing with over half the market.
The 50.5 km (31-mile) rail link, which opened in 1994, alone has a market share of over 40 percent.
Eurotunnel appealed against the ban and Britain's Competition Appeal Tribunal ruled in its favour on Wednesday, meaning it can continue to run its three ferries on the Dover-Calais crossing, one of the busiest international seaways.
The case will now go back to the Competition Commission, which will reconsider the case and, as directed by the tribunal judgment, assess whether it has the jurisdiction to review the matter at all. It is not clear when a final ruling will happen, and a commission spokesman declined to comment.
As well as Eurotunnel, which operates its vessels under the MyFerryLink brand, Danish ferry operator DFDS Seaways and P&O Ferries also run boats on the Dover-Calais crossing, competing against the rail link for freight and passengers.
"We are delighted by the Competition Appeal Tribunal's decision which recognises the benefits and practicalities of our presence in the maritime cross-Channel market," Eurotunnel Chief Executive Jacques Gounon said.
Shares in the company were down 0.1 percent at 1355 GMT, outperforming the French bluechip index which was down 0.8 percent.
In publishing its decision in June, the Competition Commission said Eurotunnel's purchase of the three ferries in 2012 was motivated by concerns that rival DFDS would otherwise buy the vessels and drive down prices for customers.
The French antitrust watchdog last year cleared Eurotunnel's 65 million euro $88 million (53.8 million pounds) acquisition of the three ferries from SeaFrance, a unit of French railway operator SNCF that went into liquidation.
France's Transport Minister Frederic Cuvillier welcomed the British tribunal's decision, saying having three ferry operators on the seaway was itself a guarantee for effective competition.
Shares in DFDS were down 5.1 percent at 1347 GMT, against a 1.3 fall in Denmark's bluechip index.
"It's bad for us ... but it does not change our view of the case. We remain very confident in Competition Commission will make the same decision as earlier," DFDS Chief Executive Nils Smedegaard said.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Groupe Eurotunnel (Paris:GET), the world leader in piggy back transport, has appointed Nicolas Brossier as Director of Rolling Stock, the department responsible for the real time and preventative maintenance of its fleet of Shuttles and for research and development. He will report to Concession Chief Operating Officer, Michel Boudoussier.
Rolling stock is one of the key elements of Eurotunnel’s transport system, employing 400 technicians, working in the longest maintenance buildings in Europe and looking after the 24 Shuttles to ensure their availability in the intense operating environment 365 days a year.
Each Shuttle is four times the length of a standard high speed train and carries up to 190 cars. The Rolling Stock department is developing in line with the increase and concentration in cross-Channel traffic over the coming years.
Nicolas Brossier, 42, will take up his role on 2 January 2014. He is a graduate of Supélec and holds an Executive MBA from HEC. He began his career in 1993 with Technip, where he was responsible for elements of gas and petrochemicals projects until 1999. He then moved to Cegelec Systèmes as procurement manager. In 2001 he joined Alstom Transport where he was successively Project Leader for the Lyon Tramway, Director of Maintenance for the Dublin Tramway, between 2003 and 2007 and then Director of Railway Infrastructure Maintenance before being promoted to the role of Commercial Director for Railway Infrastructure, France, in January 2013.
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
The Competition Commission (CC) said it is to reconsider the issue of jurisdiction in its inquiry into Groupe Eurotunnel’s (GET’s) acquisition of three ferries and other assets from collapsed operator, SeaFrance.

It will be looking at whether GET, together with a workers’ cooperative of ex-SeaFrance employees (SCOP), acquired an ‘enterprise’ falling within UK merger control, after the issue was remitted back to the CC by the Competition Appeal Tribunal (CAT) last month.

In its decision published in June last year, the CC deemed that by adding ferry services to its existing Channel Tunnel business, GET would increase its market share to over half and prices would rise for cross-Channel passengers and freight customers.

Following a legal challenge to the CC’s decision by GET and SCOP, the CAT issued a judgement in December in which it asked the CC to look again at whether the acquisition involved a merger.

The CC yesterday published the approach it will be taking on this remittal and is aiming to make a decision by the end of April.

The remittal document is available at the following link: http://www.competition-commission.org.uk/our-work/directory-of-all-inquiries/eurotunnel-seafrance along with all other information on the inquiry.

The CC is inviting responses by 22 January 2014.

It underlines that its decision was "only quashed and remitted to it to the extent required to enable it to reconsider the jurisdictional question. Therefore, the CC is not proposing to reconsider the competitive assessment in the decision as part of the remittal process."
  wanderer53 Sir Nigel Gresley

Location: front left seat EE set now departed
Battle for Dover to Calais ferry market intensifies as Eurotunnel fears Competition Commission will rule against its ownership of MyFerryLink
Comments [color=#000000]0[/color]
by Chris Price



As the Competition Commission looks again at Eurotunnel’s ownership of MyFerryLink, the battle for a slice of the cross-Channel market is about to give someone a sinking feeling.
It could have signalled the emergence of a new superpower in the English Channel.
With MyFerryLink reporting an increase in revenues of more than 1,000% last year, owners Eurotunnel looked to be on to a winner.


Are there stormy seas ahead for MyFerryLink and its owners Eurotunnel?

The Channel Tunnel operator saw its turnover surpassing €1bn (£893m) for the first time in 2013, a rise of 12%, thanks in part to its new cross-Channel operations on the water, rather than under it.
MyFerryLink earned €74m (£60.5m) last year, a dramatic increase from €7m (£5.7m) in 2012, even considering it only launched the service in August of that year.
The new venture was made possible after it bought three ferries from SeaFrance after the company went into administration in April 2012.
“With an interest in ferries as well, it puts Eurotunnel in a very powerful position indeed and that worries the Competition Commission...” - P&O's Brian Rees


With Eurotunnel already owning a concession to operate the cross-Channel fixed-link rail service until 2086, one might have thought things were looking rosy.
Unfortunately for them, nothing is ever that simple.
Eurotunnel’s operation of MyFerryLink has been the subject of a rambling investigation by the Competition Commission, which took another turn last month.
It said it will reconsider the decision it made last June, when it told Eurotunnel it could no longer run ferries from Dover, as the rise in its overall market share to over half would lead to price hikes.
The Channel Tunnel operator made a legal challenge to the ruling, with the Competition Appeal Tribunal saying in December that the commission should look again at its decision.
That delay has left rivals P&O Ferries and DFDS unhappy. Both companies originally made the complaint to the Office of Fair Trading and its French counterpart.
“Now we’ve got MyFerryLink, it feels like SeaFrance Mk II,” said P&O spokesman Brian Rees.
“It’s the same staff, same MD, same offices, same ships, but instead of SNCF behind the scenes it is Eurotunnel.


P&O Ferries

“With an interest in ferries as well, it puts Eurotunnel in a very powerful position indeed and that worries the Competition Commission.”
In its ruling in June, the commission’s deputy chairman Alasdair Smith was very clear on what he thought about Eurotunnel’s acquisition of the former SeaFrance ferries.
He said: “It cannot be good for competition when Eurotunnel, which already holds a market share of over 40%, moves into the ferry business.”
Yet to many experts, it is a wonder that Eurotunnel wanted to enter the ferry market at all.
SeaFrance was kept afloat for many years by France’s national state-owned railway SNCF, which poured millions into the company in a desire to save jobs.
In the end, SeaFrance went under with debts of €240m, despite operating just one ferry route, at a cost of 880 jobs in France and about 130 in Dover.
Yet when it closed, the ferry market appeared to cope.
“There were no queues or disruptions following the demise of SeaFrance,” said Mr Rees.
“Between the tunnel and other ferry companies there was still significant overcapacity to take up any slack, and DFDS moved into Calais.”
Nevertheless, Eurotunnel came in with a €65m bid and was awarded the three vessels by a French court in June 2012, restoring 560 SeaFrance workers’ jobs.
As its latest turnover figures suggest, it was an inspired move.


Eurotunnel passenger train

Yet with the Competition Commission investigation hanging over it, the service is yet to turn a profit. In the ferry market, money is made through haulage firms but none will commit to MyFerryLink until they know it will still be in operation in a year’s time.
The commission aims to make a decision in April, leaving three options.
If it overturns its ruling in June, then MyFerryLink continues to expand, having already captured 10% of the ferry market, much to the displeasure of P&O and DFDS.
If it stands by its decision last summer, then Eurotunnel could appeal again, if it feels its concerns about the commission’s jurisdiction in the case have not been clearly addressed.
The other option is Eurotunnel accepts the ruling and MyFerryLink ceases operating within six months.
That would leave it with three ferries it cannot sell or use in Dover
and 560 ex-SeaFrance workers out of a job.
Some experts believe that option is most likely, with the Competition Commission setting a dangerous legal precedent if it does overturn its original ruling.
Only one thing is certain: something is about to change in the cross-Channel ferry market.



Eurotunnel says ships bought as an asset not enterprise
The crux of Eurotunnel’s legal argument is that it did not take over SeaFrance but bought the ferries and then leased them to another company.
MyFerryLink is run by workers’ cooperative SCOP, which employs the former SeaFrance staff.
Eurotunnel argues that the small print shows it bought the SeaFrance ships as an asset rather than an enterprise.
P&O’s Mr Rees said: “To the lawyers, that’s significant as it has bearing on whether the Competition Commission should even be involved.
“To lesser mortals than the legal eagles, it feels like semantics given the Competition Commission’s fundamental concerns.”





DFDS Seaways ferry

'Three competitors mean prices will fall'
The issue of whether Eurotunnel’s ownership of MyFerryLink creates a competition issue has two sides.

P&O and DFDS – the latter of which only joined the Dover to Calais market in February 2012 – say it will own more than half of the cross-Channel market if MyFerryLink is allowed to continue.
Eurotunnel says having three ferry services running from Dover to Calais has to be better for consumers.
Eurotunnel spokesman John Keefe said: “If there are three competitors in the ferry market then prices will fall.
“Each will be seeking the best market share they can get and they will compete in price.
“That has got to be good news for everyone.
“If MyFerryLink ceases then you have a dualopoly between P&O and DFDS.”
He added: “We are not competing with ferries. Speed is our USP.
“We beat ferries in that respect but if people want more of an experience, with a meal, then they opt for ferries.”



Company fears ferries will be left high and dry
When selling SeaFrance’s assets, the French courts added the condition that Eurotunnel is not allowed to sell the three ferries it bought in 2012 for five years.
This was to prevent the company renovating the ships and then selling them on for a profit.
However, if it is ordered to close MyFerryLink, Eurotunnel will be left with three ships it can do nothing with.
Mr Keefe said: “We will be forced to hold onto assets we can’t make money out of.
“We are a French company, buying French assets and running out of a French port.
“When the Competition Commission stepped in we were surprised because we thought everything about it was French.
“It sounds like a French authority should have jurisdiction.”

Sponsored advertisement

Subscribers: wurx

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.