Island Ferries Teo announced that it will cease the operation of the winter ferry service to Inis Mór, citing lack of profitability of the service and calling for changes to landing charges imposed by Galway County Council. This is the second year in a row that the beleaguered island has faced the threat of the loss of their ferry service and also follows threats to the regular air service.
Niall Ó Tuathail, recent general election candidate for the Social Democrats, claims that the core of the problem is the lack of state control over a natural monopoly. He said: “At the heart of this, we have a government policy that expects multiple ferry companies to compete to improve the service and drive down prices. The reality is that it would be foolish for another company to match the millions of euros that Island Ferries has invested in boats and so there is a natural monopoly where there is effectively only one company who can provide the service.”
“Islanders are being used as pawns between the ferry company and government over the level of government support for the service. I am not claiming that Island Ferries are making a fortune from this service, but they do have all the control and therefore they can make these demands and government must open the chequebook or allow closure of the service over Winter.”.
In Denmark, many island ferry services have state or co-op ownership of boats and then tender out the operation of the ferry to private companies. According to Mr Ó Tuathail, this would “allow for real competition where any competent company could bid to run the service and this would result in a better service and lower prices. A study comparing different ferry models in Denmark and Germany showed that where the state owned the boats the unsubsidised ticket prices were up to 50 per cent lower than other models where boats were privately owned. This makes sense since government can borrow money cheaper than companies and tendering out just the operation of the service makes the tender more competitive.”
Mr Ó Tuathail has contacted the Minister of the Gaeltacht and Natural Resources to recommend this solution saying that “even the credible threat of doing this would be enough to bring Island Ferries to the negotiating table. If we go down the route of another quick fix without a long-term solution would mean we the state be back at the negotiating table in another year without any more power. It is time that we resolved the island transport issue once and for all so that the leaders on the islands can put their energy into planning for the future rather than putting out fire after fire.”