P&O Ferries faces a “sky high” insurance bill after sinking to the riskiest safety rating as measured by global maritime standards.
The company’s safety performance is expected to be deemed “very low”, according to analysis of an official international database of inspections.
P&O was previously a “medium” rating – as measured by the Paris Memorandum of Understanding (MOU) – before it sacked 800 seafarers without consultation and replaced them with cheaper overseas agency crews.
P&O said in March that safety is “our foremost priority”. Suggestions that safety is being compromised are “categorically false”, the operator added.
The Paris MOU is an alliance of 27 national shipping authorities including the UK. It has collated tens of thousands of reports into every type of maritime vessel over the past three years, from fishing boats to oil tankers to passenger ferries.
Grant Shapps, the Transport Secretary, ordered officials from the Maritime and Coastguard Agency (MCA) to conduct safety inspections on all of P&O’s vessels before they were allowed to sail again.
Just two of the operator’s eight ferries have been released in the weeks that have followed. It has been reported that P&O, whose ultimate owner is the government of Dubai, had expected to restart passenger ferry services within five days.
Detentions have been imposed on four occasions after the newly staffed vessels failed to pass inspections.
Since 2019 there have been more than 1,200 inspections. Ferries have been detained on just 30 occasions.
P&O’s Pride of Kent has been put under “port arrest” twice having failed two inspections. The latest failure was last week, which came just 24 hours after the Spirit of Dover, another cross-Channel ferry, was also deemed unseaworthy.
The European Causeway failed its first inspection before being released by officials on April 8. The Northern Ireland-to-Scotland vessel initially racked up 31 flaws, the highest number on record according to the Paris MOU database.
Experts warned that the fall in P&O’s safety rating is likely to lead to a sharp increase in insurance costs.
One Lloyd’s of London maritime broker said: “It’s very rare for a vessel to be in ‘port arrest’. [It] makes them virtually uninsurable until they are passed as safe again.
“Even then, the costs will be sky high. P&O [Ferries] has gone from a very safe risk to virtually junk. Secondly, because it’s so exposed publicly, the third party liability risk is ramped up because of the scrutiny.”
It is unclear when P&O will be fully operational with the new crews, who are being paid nearly half the UK minimum wage. Mr Shapps has vowed to impose the minimum wage on any ferry companies operating in British waters.
P&O had hoped to restart Channel services before Easter. This was deemed to be ambitious by government sources, which previously said it was unlikely they would be operational before May.
The cost of keeping P&O’s ferries moored up, alongside increased insurance costs and the redundancy bill remains lower than the estimated bill to consult with militant trade unions.
The Financial Times reported that P&O had estimated it would cost £309m to comply with UK law when reviewing its options ahead of the sackings.
The UK business is estimated to have racked up costs of £80m since March 17, according to analysis of Companies House filings. Compensation for failing to consult with staff ahead of the redundancies cost £36.5m.
P&O declined to comment.
Last month it accused coast guard officials of an “unprecedented level of rigour”.
