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This issue continues to rumble on.

The last time I reported on it the position was as follows:-

  • Liverpool had been told by the Department for Transport how much UK govt money they should repay in order to get the prohibition against doing turnround cruises lifted;
  • they made an immediate repayment and started doing turnround cruises straight away;
  • Various other parties e.g. the MP for Southampton objected saying that doing so was premature given that there was still the issue of a sum of EU money that had been given to Liverpool, which might have been covered by the same restriction as the UK money;
  • Liverpool City Council’s view was that the EU money was not covered by the restriction;
  • and the Minister, Mike Penning, said that any issue over EU money would be for the EU to work out.

Since then there have been approaches to the EU Competition Commissioner, Joaquin Almunia. He has replied to MEP Marta Andreason (an MEP for UKIP) as follows:

The Commission has taken note of the press coverage on the City of Liverpool Cruise Terminal being used for turnaround cruises as of 29 May, 2012.

The Commission is in contact with the United Kingdom authorities and has reminded them of their obligation to comply with EU state aid rules.

As far as the ERDF funding is concerned, the Commission has written to the United Kingdom authorities requesting information to assess the change in use of the terminal in terms of its compliance with Article 30.4 of Council Regulation (EC) N° 1260/1999.

Should the conditions of the ERDF initial grant offer letter no longer be complied with, a recovery of the ERDF grant might be necessary.

There are a few interesting things in there. First, the EU Commissioner is clearly saying that it is up to the UK Govt to monitor the continued regulatory compliance for EU money as well as for UK money, so the Department for Transport can’t just pass the whole thing over to Brussels. Then secondly there’s the question of what does ‘Article 30.4 of Council Regulation (EC) N° 1260/1999′ involve? Readers, be thankful: I have taken it upon myself to investigate, thus sparing you all the trouble!

So here it is. This regulation lays down ‘general provisions on the Stuctural Funds’; i.e. how they should be administered. There are a lot of sections, and Article 30 is about eligibility. Sub-ection 4 of that Article says:

The Member States shall ensure that an operation retains the contribution from the Funds only if that operation does not, within five years of the date of the decision of the competent national authorities or the managing authority on the contribution of the Funds, undergo a substantial modification:

  1. (a)  affecting its nature or its implementation conditions or giving to a firm or a public body an undue advantage; and
  2. (b)  resulting either from a change in the nature of ownership in an item of infrastructure or a cessation or change of location in a productive activity.

The Member States shall inform the Commission of any such modification. Where such a modification occurs, Article 39 shall apply.

(Article 39 allows for recovery, in certain conditions, of moneys already paid out. For anyone interested, here’s a link to the text of the Regulation.)

So if ‘the operation’ that received the grant (Liverpool Cruise Terminal in this context) substantially modifies itself (e.g. to do turnround cruises) with five years in a way that gave it “an undue advantage”, it can be asked to repay the EU money. I don’t think there’s much doubt that what Liverpool have done isn’t a ‘substantial modification’: if it wasn’t, why have the UK govt recovered their money? The only remaining issue involves the five-year timescale. I know that the new terminal was built in 2007, which is indeed 5 years ago, but I haven’t (so far) been able to find out exactly win the EU grant was paid. That might turn out to be a critical date. And finally, it’s up to ‘the member states’ to ensure continued compliance; i.e. it’s the Department for Transport’s responsibility to consider the EU money as well as the UK Govt money.

As I said in an earlier post, I can see Southampton’s (and Newcastle’s etc) point; but does it matter? The facilities for turnrounds, e.g. baggage handling, immigration, security, car parking, etc, are quite limited at the new terminal: 1500 passengers maximum seems to be the limit. Of all the ships that use Southampton for turnrounds very few are this small – P&O’s Adonia, the Fred Olsen ships (and only one of them is currently using Southampton regularly), maybe the Saga ships. Everything else is too big for Liverpool. In any case, the hope is that having a vibrant turnround facility in Liverpool will increase the total number of cruise passengers in the UK, which is likely to turn to Southampton’s advantage as if those new passengers want to cruise on bigger ships they’ll pretty much have to go to Southampton to do so.

One Response to “Liverpool cruise terminal – what about the EU money?”

  1. Graham Stokes says:

    I can see the Liverpool Cruise Terminal from my Apartment and you are quite correct in that embarkation/disembarkation is small. The current ship that does turn around the Ocean Countess has about 800 passengers and 350 crew and the terminal is fine for that. I too don’t see how 3000 passengers could be processed within the current facilities. There are of course plans for a second terminal which might upset Southampton and others but this is years away and funds would need to be found. What a lot of people forget is that cruise ships have been “turning around” for many recent years; but from the not so glamorous Gladstone Dock.

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