Marinas failing

THE rush by British Waterways and Canal & River Trust (CaRT) to promote new marina construction as a 'good investment' is proving anything but for some, especially as a devious Network Access Agreement tax of many thousands was added.

One of those is Pillings Lock Marina on the Soar, with CaRT now taking court action  to recover an alleged debt of over £180,000 for Network Access Agreement fees owed by Quorn Marinas Properties Ltd, writes Allan Richards.

Marinas not profitable

It was in January of this year that narrowboatworld revealed that a report had shown that the majority of inland marinas are not profitable (Marinas not profitable).

The report, commissioned for Paul Lille, Managing Director of the company that owns Pillings Lock Marina, showed that only 48 of the country's marina operators are trading at a profit with 77 showing signs of failing and 45 currently up for sale at a loss on the original capital investment.

Oversupply

At the time it was suggested that the central problem was oversupply in the marketplace. This has been confirmed by CaRT's own marina company, BWML, who say that its own average berth occupancy has dropped from 80% to under 75%.

The problem is magnified by Network Access Agreements which are fixed, and work on the assumption of full mooring occupancy. In the case of Pillings Lock Marina, its Network Access Agreement costs about £44,000 per year which should be paid irrespective of the number of berths occupied.

Defended

Paul Lillie explains that CaRT's claim will be defended adding that the alleged debt is more than Pillings Lock Marina has shown in profit since it opened in 2008.

He makes mention of British Waterways' 2005 'Inland Marina Investment Guide' which encouraged private investors to develop marinas promising guaranteed returns and claims that several senior British Waterways employees told him his marina would be full within 18 months.

However, this has not been the case due to over-development of marinas, particularly in the Midlands, combined with a drop in numbers of registered craft leading to unoccupied berths.

Level playing field?

Whilst some will side with Mr Lillie and the stand he is taking, others believe that additional marinas, such as the one planned at Onley on the Northern Oxford Canal will lead to a general reduction in the cost of moorings.

However, this might not be the case. Paul Lillie cites 10 marinas within 12 miles of Pillings Lock that are not subject to Network Access Agreement charges. Any new marinas, such as his own and the one planned at Onley are subject to Network Access Agreement charges, and as such, have to recover costs from moorers irrespective of how full the marina is.

In round terms, if a marina is full then the cost of moorings have to be increased by 9% in order to pay the Network Access Agreement charge. If only three quarters full then the cost of mooring has to be inflated by 12%.

A hidden tax

The Network Access Agreement is simply a hidden tax on boaters who end up paying more if marinas are under occupied.

Despite the dramatic decline in the number of boats on CaRT's waterways over the last two years, CaRT state that the numbers of boaters deciding not to have a home mooring is actually increasing by 70 per month.

Little wonder marina operators, who have made high capital investments, are in trouble.