The Manx government has abandoned attempts to agree a voluntary regulatory deal with Manx Gas.

Policy and Reform Minster Ray Harmer has forwarded to all Tynwald members a letter he has written to Manx Gas chief executive David Cruddace.

In the letter, leaked to the Examiner, he wrote: ’I am writing to advise that the Council of Ministers has agreed it does not wish to pursue a voluntary regulatory agreement with your company. Whilst I appreciate this is disappointing it is important to place on record that CoMin has negotiated in good faith for nearly two years with Manx Gas Ltd.

’These discussions have taken far more time than was originally envisaged and have consumed an inordinate amount of time by all parties.’

Mr Harmer pointed out that his predecessor first wrote to Manx Gas in March 2019 when it was expected a new agreement would be signed the end of August that year at the latest.

He said despite ’numerous milestones being consecutively missed’, the Council of Ministers continued to support discussion throughout 2019 and 2020.

Mr Harmer said this was evidenced by the head of terms for a new deal he took for approval to Tynwald in November last year.

But the two sides have still not reached agreement on the company’s domestic assets and base operating costs, which the Minister said was a prerequisite for any deal.

’It is further reflection on the expressed will of Tynwald, along with lack of progress made to date on negotiating an agreement, which has led the Council of Ministers to its decision not to negotiate any further,’ he added. ’The Council of Ministers is unanimous that the most important outcome is ensuring that the customer is robustly protected and this is best achieved through statutory regulation.’

Mr Harmer said the Council of Ministers is committed to ensuring the government part of the rebate to gas customers is honoured.

As such it has agreed that Manx Utilities’ charges in relation to the gas extension can be reduced - but only on the condition that Manx Gas enters into a contractual agreement with the authority.

This would adjust the loan interest payable in return for the utility company passing on the saving to domestic customers. For its part, Manx Gas has denied claims that it didn’t ’positively engage’ over a new regulatory deal . A spokesman said it had sought to engage with the Minister and senior cabinet officials on 29 occasions but received only a handful of acknowledgements.

Tynwald voted in November to accept the heads of terms of a new voluntary gas deal which would see profits capped at 7% for domestic accounts with customers receiving a £93 refund.