So much for the Thanet Council Tory Group's one-day-old promise to promote open and transparent government and allow filming at Council meetings. The word hypocrites comes to mind. I therefore decided to film the meeting secretly, but was discovered. I was asked to leave the meeting but refused. The Chairman closed the meeting and postponed it to another time.
During the short time the meeting was in session a Council officer distributed a letter which we were told was written by the Ostend Port Harbour Master. The letter is not dated or signed but reference to the forced sale of the TransEuropa ferry Gardenia would put it about late September/ early October.
The letter says that Ostend Port has lost 3.5 million euros (£2,938,953) by deferring Transeuropa's fees and charges in the same way that Thanet did. The letter also sates that Ostend will be trying to sell the remaining Transeuropa Ferry, the Larkspur, to offset some of its losses. But just like the case of the of Gardenia which was sold for 750,000 euros in September, Thanet Council will not share in the proceeds of this sale because senior Council officers and Labour Cabinet members chose not secure Transeuropa's mounting debts against its assets.
This astoundingly foolish and incompetent decision has cost the taxpayers of Thanet a share of about 1.5 million euros which will have been realised by the sale of TransEuropa's assets. This money would have gone a long way to cushion the blow of a secret gamble with your money which went badly wrong!
But most surprising of all the letter from Ostend makes some extremely serious allegations about the owners of TransEuropa Ferries. These allegations are so serious that I have edited them from the letter so that I will not be sued. If these allegations are true then why on earth did the Council agree to defer debts which rose to an astronomic £3.5million in 3 years when there appears to have been some serious worries on the integrity front
One of the excuses given by the Council Chief Executive is that TransEuropa were in discussions with investors who promised to pay back all the company debts to the Council. However, the Chief Executive is on record as saying that the Council did not perform financial due-diligence on these investors. This is incomprehensible. Surely if someone who owes you several £million tells you they have an investor who will pay off the debt the first thing you would do is to check if the investor is good to cover the debt. But not Thanet council. Not good old incompetent, maladministered Thanet Council. They simply took the word of a company which Ostend is now describing in incredibly strong libellous terms. Sounds a bit like Pleasurama if you ask me
Some final comments on this appalling scandal of mismanagement and incompetence is that the Council has allegedly received independent legal advice which says that it has 2 hopes of recovering the £3.5 million debt - Bob Hope and No Hope. Word on the street is that this sad news will be announced before Xmas. Surely this should mean the political leaders (Clive Hart, Rick Everitt, Bob Bayford and Martin Wise) and the senior council offices who managed this scandal should do the honourable thing and resign. But not in Thanet. Things don't work that way here.
One thing is for sure Thanet Council's augean stables stink and need a Herculean cleaning out. In 20015 you help to do this.
Here is the edited letter enjoy
To Mr. Mark Seed
There are 4 seaports in
Belgium (Antwerp, Gent, Zeebrugge, Oostende) governed by a regional
decree (Flanders) setting
out in great detail structures, authorities, etc., including the possibilities for some government interventions of which the most important ones are the provision of base infrastructure (e.g. approach channels) and the maintenance thereof (dredging). The region of Flanders
owns all land and water but gives that in a 99 year lease to the Port Enterprise (see further). From there on the Region is not involved at all in any matters concerning the Port, save for controlling if everything is done legally,
on the basis of the Port Decree
mentioned earlier.
The legal structure
imposed by the Port Decree is that of an "Autonomous Municipal Harbour Enterprise". In essence it means that the port is an enterprise, a company governed by the laws on private enterprises, not under administrative law as for government or municipal agencies. This harbour
enterprise is fully owned by the city in which it is located. (You could say the City owns 100% of the shares although
there is in this case no issued shares as they are in
any case never transferable).
As
a result, the port decree states that the harbour
enterprise is to be governed
by a board of directors, 18 in total.
Of these 18, 11 are city councilors from all parties represented in the city council.
There is 6 parties in all, a coalition
of 3 form the majority.
The board of directors
of the Port is in a way a reflection of the city council with an additional 7 independent members
(from industry, academy, education, and myself). The
chairman is the
mayor of the
city (the mayor in our system is elected and combines your functions of leader of the council and mayor).
The
board meets in principal four times
a year and is given all relevant
information, including financial.
The fact that Transeuropa didn't pay its bills was mentioned with each financial report. Given the information available
the board decided
each time to give it a further chance.
If we would pull the plug so to say, it would have meant the immediate
end of the line with no - or very little - chance of ever starting
again. It was considered that the continuation of the line was to be given every chance, knowing the risk of failure but at the time not jeopardizing its chances of survival.
The accounts, as in any company, have to be approved at the AGM of shareholders. In our case, that is the city represented by the City Council. The City Council approved the accounts, unanimously (including opposition!) knowingly writing off old debts of TEF and was informed about the debts for 2011 an 2012, still in the accounts as receivable.
When TEF finally failed,
the board was informed
(again) of an outstanding debt of about 2,5 million
euro for 2011 and 2012. We had sent, but not booked,
invoices for 2013. These are therefore obviously
a loss of income but not to be written
off as a bad debt. Through a question officially
filed on the meeting
of the City Council in June by an opposition member, the Mayor confirmed to the City Council
the debt of 2,5 million
to be
written off (which the councilors -
board members already knew). Obviously it was then picked up by the press but caused not further commotion
other than the community expecting the council and
the port to try its best to attract another ferry line. After all, this was a break in a tradition that had started in 1846 and is understandably an emotional event.
I hope the above sheds some light on how the Port of Oostende dealt with the failure by TEF. An additional problem now is that the ships are abandoned in our port and there is no provision under Belgian law about who should take care of an abandoned ship. As they are in our port, and a threat to safety in our port, we had to take charge. They cost us about 25 000 euro per month with no guarantee we will be able to recuperate that money.
The Gardenia has now been sold (two weeks ago), the Larkspur
will hopefully be sold towards
the end of the year.
All
in all very
unsavory story with the Dias family appearing
-------------- rather than the image of distinguished gentlemen they succeeded in making us believe.
If the Ostend port management made the statement to which you refer, namely - If these allegations are true then why on earth did the Council agree to defer debts - would it not be right to state that Ostend made exactly the same faux pas when dealing with this company as TDC did? Doesn't this simply illustrate that Ostend, Ramsgate and apparently the company supplying the fuel for the ferries have all suffered in exactly the same way with the sad demise of this company?
ReplyDeleteThis would seem to be a very pertinent sentence - If we would pull the plug so to say, it would have meant the immediate end of the line with no - or very little - chance of ever starting again. It was considered that the continuation of the line was to be given every chance, knowing the risk of failure but at the time not jeopardizing its chances of survival. Is that not exactly what was done at Ramsgate?
On a pro rata basis, if as reported, the fuel company is owed some £20 million, Ostend and Ramsgate £3.4 million each, then if ferries sold for £1.5 million together, that would mean, pro rata that Ramsgate would only receive some £175,000 towards the loss, doesn't really make a dent. If Ramsgate management had impounded the vessels in UK, the money released from any sale would have been virtually all swallowed up by the £25,000 per month to maintain the vessels as stated by Ostend management. As for "due diligence" what outcome would one have expected when an investigation was carried out into a company that had already admitted in was in trouble?
(please read £ or € as appropriate)
You misunderstood. TransEuropa informed the Council in November 2012 that it had an Italian investor lined up who would pay off all the company debt to Thanet Council. The Chief Executive has said on several occasions that financial due diligence was not conducted into the investors. This means that the Council accepted what they had been told at face value and allowed TransEuropa to build up more an more debt until it went under in April 2013 owing £3.4. In my book this is financial mismanagement of the first order and is probably contrary to the Council's financial regulations.
DeleteI take your point Ian, however, am I not right in thinking that up to November 2012, TDC had received some payments from TransEuropa towards it's accured debt, a new ferry had arrived (or was arriving, not sure of the exact timescale on that point), and the amount of debt accrued between November and April was surely a fraction of the total debt?
DeleteAs TransEuropa had it would seem secured the lease of the larger ferry, which indeed made a brief appearance and Ostend's same approach to TransEuropa as Ramsgate's isn't it fair to conclude that the fuel company, Ostend, P&O - who i believe leased the larger ferry - and Ramsgate were all taking exactly the same action. Is there any evidence to suppose that the backer wasn't in fact ready to come in and support TransEuropa, would "due diligence" have shown otherwise?
Didn't all 3 entities all carry on down the same path, If circa £3million was owed in November, with payments being received, and a new ferry having turned up, wouldn't you say it was a fair approach to offset the potential loss of income of some £400,000 against the amount owing of £3 million, the other 2 entities thought it was the best appraoch, why do you think, without the benefit of hindsight of course, that Ramsgate's approach should have been any different?
Correct 3 payments of £80k were made between July and September 2012. But after this date no more payments were ever made. The Council chased TransEuropa via e-mail and phone and they chased the so-called investors who had promised to pay the debt but to no avail. In the 6 month period between October 2012 - April 2013 no payments were made to Thanet and TransEuropa had increased its debt by approximately £600,000.
DeleteNo payments were paid to any of the parties involved, they were taking the same route as Ramsgate, it would seem. So you would agree that the rest of my comments are accurate, given the situation at the time Ian?
DeleteAnd more substantially what about the 15 months April 2011 to June 2012 when the Council allowed nothing to be paid by Transeuropa, in return for jack shit, i.e. no guarantee, no asset backed security, no collateral. Just because those in Belgium were prepared to negligently allow themselves to be ripped off for whatever reason doesn't mean the executives at Thanet Council should have blindly followed them like wethers, and allowed tax payers money to be wasted. The whole point of having a S151 Officer is to protect public money from such shambles. Thanet Council's clearly failed dismally and continually..
DeleteDon't forget the fuel company owed some £20million, hindsight is a great thing.
Delete