FULLERS RELUCTANTLY GIVES 90 DAYS' NOTICE ON ROUTES WITH EXPIRED CONTRACTS HALF MOON BAY AND BAYSWATER FERRY SERVICES
Media Release – October 16, 2008
Fullers today gave ARTA 90 days' notice of its intention to withdraw from the Half Moon Bay and Bayswater ferry services.
“It is with extreme reluctance we provide this notice, but for 15 months we have operated without a formal contract and at a considerable financial loss,” says Douglas Hudson, CEO Fullers Group.
Fullers' contract with ARTA for the Bayswater ferry expired in November 2006. The Half Moon Bay contract expired in September of 2006. Since that time, Fullers has worked with ARTA to agree a new contract under terms that would be acceptable to both parties.
“We agreed to roll both contracts over to July 2007 because of the potential for developing long-term contracts of five years' duration. We have continued to operate these services in good faith during this period of negotiation,” says Mr Hudson.
In March 2008, ARTA changed its mind. It advised its preference was no longer to negotiate a contract, but instead to tender Bayswater, Half Moon Bay and Birkenhead, with new contracts commencing in January 2010. At this time, ARTA provided Fullers with a short term offer of a 20 month contract for the Bayswater and Half Moon Bay services.
“In Fullers' view, this holdover period is untenable. It is not commercially viable,” says Mr Hudson. “Fullers, like most New Zealand businesses is operating in an environment of escalating costs,” says Mr Hudson. Fuel prices alone have increased by 60 percent since the last fare increase in 2006.
“The two year protraction of these negotiations have been particularly difficult and to the significant financial detriment of Fullers,” says Mr Hudson.
“We simply cannot continue to operate these services at a loss and after much discussion with ARTA have reluctantly advised them that we can no longer continue to operate the expired contracts,” says Mr Hudson. “However, we are providing 90 days' notice to give ARTA as much time as possible to make alternative arrangements for the 800 valued passengers who use these services every day.”
“Fullers welcome the opportunity to competitively re-tender, if invited, for these services on a commercially viable basis,” concludes Mr Hudson.
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