THE PENINSULA FERRY COMPANY

PENINSULA FERRY COMPANYYour firm has recently been approached by the Peninsula Ferry Company (PFC) to carry out a businessrisk analysis.Three and a half years ago, PFC purchased exclusive rights to operate a car and passenger ferry route fornine years. This offers an alternative to driving and additional 150 kilometres via the nearest bridgecrossing. There have been several ambitious plans to build another crossing but they have failed throughlack of public support and government funds.PFC refurbished two 20 year-old roll on, roll off (“Ro-Ro”) boats to service the route. The boats do notyet meet the emission standards of Environmental Protection Regulation which come into force 18months from now.Each boat makes three return crossings every day of the year, subject to weather conditions, and has thecapacity to carry approximately 250 passengers and 40 vehicles. The ferry service carried just 70,000vehicles over the last 12 months (prior year: 58,000 and 47,000 two years ago).Hot and cold refreshments and travel booking facilities are offered on the one hour crossing. Theseservices are provided by independent businesses on a franchise basis.PFC currently receives a subsidy from the local transport authority as an incentive to increase marketawareness of the ferry services and its efficient and timely operation. The subsidy increases as thenumber of vehicles carried increases and is based on quarterly returns submitted to the authority.PFC employs 20 full-time crew members who are trained in daily operations and customer service, aswell as passenger safety in the event of any personal accidents, collisions or breakdowns.The management of PFC is planning to apply for a recognized Safety Management Certificate (SMC) in 12months’ time. This will require a ship audit including the review of safety documents and evidence thatactivities are performed in accordance with documented procedures. A SMC is valid for five years andwill be issued if no major mon-conformities have been found.Read the “Peninsula Ferry Company” case (one page) and answer the following questions: Identify and explain the business risks facing PFC which should be assessed.Describe the processes by which the risks identified in (a) could be managed and maintained at an acceptable level by PFC.