News / Doubts cast on harbour profits
SHETLAND Islands Council heard on Wednesday that profit forecasts of £4 million annually for its harbour account were unrealistic.
Board vice chairman Alistair Cooper called for a long term strategy for the port of Sullom Voe, with the Schiehallion oil field due to come offstream in 2013 leading to a 40 per cent drop in income.
Councillor Rick Nickerson said he had been asking for the profit target of £4 million to be reduced to £3 million for many years, as the harbour had failed to meet its own forecasts for at least three years.
Yet next year harbour master Roger Moore predicts a surplus of £5.4 million, thanks to increased dues as well as the impact of cost cutting measures.
However £2 million of the predicted profits will be used to start filling the £7.6 million hole in the council’s pension fund created by the transfer of Shetland Towage to the SIC.
Doubts were raised whether the harbour board would be able to continue making such large annual contributions towards the pension fund once profits fell.
Head of finance Hazel Sutherland told members that flexibility was built into the system and annual contributions towards the pension fund gap would be reviewed.
But she warned that pension contributions should be “top-sliced” from any surplus, with the result that council services might not benefit from any additional funds generated at the port.
Independent board member Jim Tait said he was delighted to hear of the £5.4 million profit next year, but added that income thereafter would “probably come down with a bump”.
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