The Pillings Marina débâcle

MUCH as been written, by many people about the Pillings Marina débâcle, so here is the story from the 'horses mouth'—its Managing Director, Paul Lillie:

ONLY one of the 20 British Waterways Marinas Ltd (BWML) marinas were on the same Network Access Agreement (NAA)  as QMP Ltd [Pillings Lock Marina] and many pay little or nothing. 13 sites pay a 'Market Rent' but get the NAA fee included. Now how much is that Market Rent?

And if so why do they then not pay 9% of GMC at PAC per annum too? Is this to support the high salaries of its managers? Or to increase the dividend? Someone tell me please as I am dying to know! (Photo by permission of Leicester Mercury.)

[GMC = Gross Moorings Capacity—the total number of metres of moorings in a marina (ours is 4,072m total) and CaRT usually divide this up into 12m lengths as that is the average length of boats on the system. PAC = Published Annual Charge. If you have a price list (as all marinas do) then CaRT take this as the gospel rate you are getting for all of your moorings at PAC.]

Not contested High Court action

QMP Ltd told CaRT in November 2013 that it would not contest their High Court action—we did not even submit a defence. There was no point as the NAA contract was so watertight that trying to defend it would have just escalated everyone's legal costs by another £100k and CaRT had already won the minute they got me to sign it in March 2007. But it was a case of sign it or there is no marina.

Then came the onslaught of new marinas being constructed—thousands of new berths.

5,600 new berths were constructed and put on-line in 2007 to 2012. Yet only 2,341 new boats to fill them. Get the gist now? There simply is not income coming into the marina industry to support high rents and service charges as issued by CaRT and thought up by CaRT in 2006. CaRT/BW claim that the NAA was given 'Approval' by the British Marine Federation (BMF)—ask anyone at the BMF if they saw it and approved it? No one will admit to this, because no one did approve it. I have the word of ex BMF staff that the BMF did not see this as a reasonable charge or system as it was far too different from existing agreements.

Providing a 'free ride'

A conservative guess is also that there are 6,000 Continuous Cruisers, although we all know what that term means in most cases. A well publicised article in September 2013 said 67 boats per month were registering as Continuous Cruisers—that means at a conservative £2k per boat in mooring fees, £1.6m per year was leaving the marina industry and going onto the towpath. Where is the compromise from CaRT for providing a free ride for our formerly paying clients?

I have lost £4,837 in annual mooring fees in 2014 alone to three boats that were for many years moored with me, but now being sold and going directly onto the London towpaths as homes for working professionals in the City.

Unprofitable Waterway Network

How long can this carry on? Why should we pay £38,329 plus VAT per year to be connected to an Unprofitable Waterway Network?

And as a compromise, in a year we made £7k profit—I paid CaRT £6k. In a year we made £22k profit I paid CaRT over £11k. Plimsol state that the average profit margin in UK Marinas is currently under 5%—so why do CaRT feel it is appropriate to take twice the UK profit margin (9%) from a small business? And bear in mind with average marina occupancy at 80% this 9% then becomes 11.25% of the actual mooring fees in most marinas on the new NAA.

We are not running Pilling's as a hobby—it is a business that must stand on it's own two feet. Current investment stands at £3.97m. CaRT have invested zero yet take £150k a year plus in boat licence fees from the moorers here—some of these boats don't even have engines! CaRT make more profit from this marina than the owners do via the boat licence, yet they want another £38,329 Plus VAT that we more often than not have not had to give them.

Not kept moorers' money

There has been no foul play here either. We have not 'kept' moorers money that should have been passed on to CaRT—we have only ever managed to generate revenues that are barely sufficient to keep the main bills paid. We have had to be more competitive on pricing and we have had to cut our running costs to a bare minimum to survive a recession and a national trend that shows a drop in the numbers of licenced boats. More boats on the towpath than ever before too.

So is it fair my clients pay a boat licence and 9% of their mooring fees to CaRT? Whilst a Continuous Cruiser just pays for a boat licence and uses the waterways every day of the year? How can that be fair? Because it ultimately is the client that is paying and this whole débâcle—that was well publicised by Phil Spencer [of Cart] to all my clients—has shown what raw deal a guy in a marina now gets from a financial perspective.

Ignored letters

Phil Spencer at CaRT has had 12 letters over five years from us explaining where we are, how these factors have affected us and how the trends have affected our business here specifically. He ignored almost all of them. CaRT had the power to do a deal and review it annually to see when we could pay more. CaRT chose to go down the legal route, not us, and consequently it is many thousands of pounds worse off because of a bad decision to my mind. There have been dozens of emails exchanged between me and Phil Spencer too—he usually only answers half of what I send him and usually with a 'not our fault' type response.

I recall emailing Phil Spencer to say that one boat left us to Continually Cruise in 2009 and went 200 yards in the first six weeks. Seeing that it was so easy, three more boats followed and all now sail up and down 10 miles of canal nearby. That was £1,000 a month we lost at that time—Phil Spencer's retort was "Why are you telling me that these boats have clearly done what they are allowed to do and under regulation (blah, blah) and are perfectly entitled to Continually Cruise..."

No commercially sensible decisions

They had the power to compromise on our NAA too—my MP, Nicky Morgan, asked them, and was told yes, it does have the power to compromise. But Phil Spencer chose not to compromise, and instead has wasted tens of thousands of pounds in legal fees in the process. Its Liquidation Agent (whom I took to the pub recently) agreed that CaRT do not make commercially sensible decisions.

Ask Phil Spencer—as BW/CaRT Boating Trade Manager—when he last called a meeting of marina owners on the network. Do you think he should? It takes enough money from us but takes no feedback in return, but shows a total inflexibility in our case. Don't you think they should send us data out to help us plan? Show us trends of where most of the boats are clustering? Really simple stuff but you get nothing from Phil Spencer for seven years then a barrage of letters to our customers telling them to get out as CaRT are blocking us up which are all sent out at a rate of one a fortnight to 300 people.

The Devil Incarnate

Do CaRT really not realise that it may have the legal and moral high ground, but customers here think they are the Devil Incarnate and are now plotting and scheming all sorts of plans to disrupt any action or works that CaRT may foolishly try to undertake to block us up. This is not my doing—it is the conscious decision of people who have grown to love being here at Pillings, and will not see anything disrupt that. It will probably cost CaRT thousands to block us up—is that a good way of spending its money? Or should it not try and draw a line in the sand and move on— getting a new Agreement in place and paid as soon as possible?

The latter is our preference and we have funds waiting to start paying them.

My clients have seen the berths here sitting empty for year on year. These berths are fabulous Duck Roosts!

Towpath settlements

They have seen the prices of berths fall. They have seen more and more new marinas being built and they constantly moan about the miles upon miles of towpath settlements that have grown and grown year on year.

Yet CaRT are powerless to do anything about it.

 

We may have fallen £20k or so a year short on our NAA fees but they have just wasted £24k on a legal battle we said we would not contest and we didn't.

Poetry and wildlife

When things got tough we cut our cloth to suit. Yet CaRT is funding Poetry Projects, Wildlife Studies and all the other non revenue generating extras that really cannot help day to day basic maintenance and planning. Yet is anyone whingeing about this?

Most importantly though CaRT does not adhere to a Fair Trading Code of Practice. It owns many sites paying far less than we, a fledgling new company, were expected to pay. There are plenty more private sites that pay little or nothing. They do not share data about market rates, locations of boats and locations of moorings needed. They do no work at all to help the marina industry improve profit margins—yet whinge incessantly about a bill that a marina cannot afford to pay in full. The market has changed dramatically and yet more marinas are opening this year! It's incredible.

Nigel Sheppard was a great loss to us in the marina industry as he was the only man at BW that actually had a sustainable plan—this is probably why he was sacked.

Were we silly?

Were we silly to open Pilling's in 2007 when demand was so high? Or is Bosworth Marina bonkers to open 150 berths in Summer 2014 when market demand is clearly falling very sharply, and Bosworth is positioned at the end of a waterway cul-de-sac?

Time will tell but one thing is certain, CaRT will not support the commercial parts of the industry that it has no interest in. Quite the opposite in fact, CaRT wants to destroy the parts of the industry that do not contribute, as is clear in our case.

The day to day running of a marina is nothing compared with the challenges of dealing with CaRT, and I wager there are less than 100 people in the country qualified and experienced enough to make that statement.