Shareholder role needs explaining
Wednesday 23rd October 2013, 4:00PM BST.
NOW that Treasury and Resources has effectively scared off competition on the Gatwick route, attention will inevitably turn to how well Aurigny serves the island given its virtual monopoly and how it avoids the temptation to improve its finances at the expense of passengers.
That task falls to Treasury and Resources, which is responsible for shareholder governance and oversight of the Aurigny board of directors.
How successful that will be, however, relies not just on T&R holding the right levers to enable it to engage effectively as an active and intelligent shareholder and holding the board and management team to account for delivery of its objectives. It also requires the department having the willingness to do so.
For islanders, Treasury looks conflicted. Its overwhelming objective is to balance the States books. A loss-making Aurigny makes that harder while one making handsome profits by flexing its solus London position is rather attractive – other than to customers.
T&R recognises this and is proposing to take steps to ensure that Aurigny remains what it calls an honest partner via something called a shareholder sub-committee.
Unfortunately, it fails to say in its Billet d’Etat report who will exercise that crucial role.
Deputies are being asked to sign away normal, basic competition without knowing who or how ‘virtual competition’ is to be assured after they have done so.
Will Aurigny be scrutinised by T&R members? Or by its civil servants? Whichever, it does not seem to have been particularly effective to date and States scrutiny through its own political committees has yet to strike fear in any area of government.
This lack of detail is particularly puzzling since T&R says that its sub-committee will also oversee Guernsey Post, Guernsey Electricity and Jamesco 750, the slightly opaque company operating the island’s fuel ships.
Since the involvement with the utilities implies at least some overlap with the Channel Islands Competition and Regulatory Authorities, the lack of explanation is troubling.
Allowing the island’s air transport licensing regime to take account of competition for Gatwick is the right way forward – but islanders have to be convinced they will not be ripped off as a result.