The Shetland Islands Council (SIC) in Scotland has agreed unanimously to fund up to £18.6 million (US$23.7 million) towards the cost of a new ferry and related harbour works for the community of Fair Isle.
The councillors met in private to discuss details of the full business case, including preferred options and financial implications, based on calculated project costs, including tender returns. The overall project cost is estimated at £45.4 million (US$57.9 million), partly funded by a UK Government grant of £26.8 million (US$34.2 million), subject also to their approval of the full business case.
Councillors also decided to borrow the £18.6 million contribution towards the project rather than to take this from the current reserves.
The preferred option is to construct a new larger, faster monohull vessel built to modern standards, to replace the current ferry Good Shepherd IV built in 1986. This new vessel will have the same passenger capacity as currently, and have increased lift-on lift-off (Lo-Lo) capacity. To accommodate the new vessel, upgrades are needed to the existing ferry terminals at Grutness and North Haven in Fair Isle.
In Fair Isle, the boat noust would be enlarged to accommodate the wider, longer vessel along with a new slipway, boat cradle and winch house with some dredging in the harbour area.
At Grutness, the proposed infrastructure works include a new steel tubular-piled pier, around the existing one, which also extends the length of the pier by a further 22 metres and a breakwater extension to create a more sheltered berth.
The next step in the project is for the Department for Transport (DfT) to also consider the full business case, ahead of a decision on whether to provide the UK Government grant. The SIC hopes that contracts can be awarded early in 2025, to meet the planned programme timetable and for work to get underway as soon as possible.
In November 2022, project costs were originally forecast at £29.7 million and had risen to an estimated £40 million to £45 Million by January 2024. Amid rising costs, in May 2024, councillors agreed to review the project to help progress the project to the full business case decided upon earlier this month.
Members of the project team have spoken regularly to representatives of the Fair Isle community to discuss what they need from the new vessel. The SIC said the representatives' contributions have helped shape the vessel design and works required.