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SIC can’t afford a Whalsay tunnel

SHETLAND Islands Council can not afford to build a tunnel to the island of Whalsay unless the cost is significantly reduced or large sums can be raised externally, according to its finance chief.

However even with much reduced costs and extra funding, the council would find it very difficult to squeeze a tunnel into its existing capital programme, SIC head of finance Graham Johnston said.

His comments come in a report to Friday’s meeting of the SIC’s infrastructure committee to be attended by five Norwegian tunnelling experts.

The island of Whalsay is divided over the future of its transport links to the Shetland mainland, with the current ferry service inadequate to cope with demand and in need of replacement within the next five years.

Plans to build new ferry terminals and replacement ferries have been on hold since February when the council decided to investigate the possibility of a drill and blast tunnel to the isle.

Initial suggestions that a tunnel could be built for £35 million were discounted during a workshop involving UK and Norwegian tunnel experts.

While tunnels are built for £9,500 per metre in Norway, the workshop agreed a likely cost in Shetland would lie somewhere between £10,000 and £11,000 per metre, putting the cost of a 6.3 kilometre tunnel at between £63 and £69 million.

Additional costs for road construction at either end of the tunnel (£7.6 million) plus project development costs (£4.93 million) push the cost up to between £76.143 million and £82.695 million.

On top of this the council is advised by the UK Treasury to add a risk factor, also known as ‘optimum bias’, of 66 per cent for the tunnel and 44 per cent for the rest of the scheme. This would bring the final bill to between £123.63 million and £134.19 million.

Mr Johnson said that by comparing the long term cost of a tunnel to a new ferry service over a 120 year period, such high costs would make building a tunnel “virtually impossible”.

To become viable the cost would have to come down to £47 million (£5,500 per metre) or would have to attract outside investment of £25 to £30 million.

If the government were to cease its current 63.7 per cent subsidy of Shetland’s inter island ferry service, then a tunnel would become the cheaper option.

However even then the council would have severe difficulty raising the money to pay for such a large infrastructure project, and would certainly breach its current policy of maintaining its reserves of £250 million.

It is also estimated a tunnel would take between six and eight years to complete, while the Norwegian Public Roads Authority says they allow 12 years to build a tunnel, by which time the existing Whalsay ferry service would be well past its use by date.

In his report, Mr Johnston recommends councillors “note that in present circumstances the tunnel option is not affordable and it does not represent best value”.

He suggests they “reaffirm the intention of pursuing the best value option for the continuation of the ferry service as the transport link to Whalsay”.

However he concedes that this conclusion could be affected by the findings of a member/officer working group set up last week to look into alternative and external funding for a tunnel.

The council has given itself until 30 June to make a final decision on the future of Whalsay’s transport links.