Is it possible that the government are already providing the funding to cover the cost of running the inter island ferries, perhaps the bit that they are holding back is the berthing charge imposed by the SIC.
The 2015/16 Shetland Inter Island Transport Study (SIITS report), page 7, details the following:
- Ferries 2015/16 total running costs, £16,291,711
- Minus the fares, tolls or Islander tax, £2,208,040
- Leaving a net cost to the SIC of £14.08 million.
- Minus the Scottish Government grant about 48% £6.76 million.
- Leaving an SIC contribution of around 52% £7.32 million.
Included in the total ferries running cost is the SIC Ports and Harbours berthing charge of £3.1 million. (52% of which paid by the SIC)
This, I believe, is recorded as a cost in the ferries account; it then gets transferred to the harbour account, recorded then as a profit; then all harbour profit is transferred to the reserve fund.
The Scottish Government have since then, awarded the SIC a further £5 million; this would cover the ferries running costs with some to spare but not the full SIC berthing charges.