During this month’s sitting, Tynwald will discuss the heads of terms for the new Sea Services Agreement following the government’s acquisition of the ferry company last year.
The agreement will be a formal contract between the Isle of Man Steam Packet Company and the Department of Infrastructure which will see the Company invest in new vessels and continue operating well above the set minimum service levels, in return for ongoing use of the linkspans at both the King Edward and Victoria piers in Douglas.
It also incorporates conditions on fares, routes and sailing frequency.
Once approved, the Sea Services Agreement will replace the current User Agreement with effect from January 2020, remaining in place until 2044 with a formal review by the Department every five years.
Chief Executive Mark Woodward believes it will be positive for both the Isle of Man economy and the Isle of Man Steam Packet Company.
He explained: ‘As a company which has an integral role in the Manx community, our interests are fully vested in what is best for our island and I firmly believe the new Sea Services Agreement will deliver significant value in the years to come and stabilise the long-term future of sea services for the island and its people.
‘Since the start of the User Agreement there has been major private investment in vessels, a reduction in fares (halved in real terms) with enhanced offers and availability, and an ongoing commitment to continue promoting the Isle of Man as a destination of choice in the UK and Ireland.
‘This agreement shows confidence in the future and will allow us to further explore investment plans which feature securing a new purpose-built vessel by the end of December 2021 (subject to availability) to replace the services currently provided by Ben-my-Chree.’
In the meantime, Manannan will have some of its passenger facilities refurbished by March 2021, while the agreement also contains provision for a new vessel to replace the fast craft by December 2026.
It’s estimated the investment to replace both ships will cost a minimum of £70 million.
Mr Woodward added: ‘This is a significant investment by the Company and we are committed to maintaining a third back-up vessel (intended to be the Ben-my-Chree when the replacement vessel arrives) from 2022 to enhance security of both passenger and freight links and also help increase capacity during the TT and Festival of Motorcycling.
‘As part of the new agreement, we will also commit to further increasing low fare initiatives where possible and providing a platform for further investment and improvements.
‘Although the Government is the sole shareholder in the Isle of Man Steam Packet Company, we continue to be run by an independent Board of Directors and a local Executive management team.’