Contingency funding of up to £2.5m approved for Fair Isle ferry project
- The budget covers the possibility of unforeseen additional costs – but the hope is that it is not required
- The National Trust – the owner of Fair Isle – has confirmed it is not contributing to the £45million project
CONTINGENCY funding of up to £2.5 million for the new Fair Isle ferry project was approved by councillors last month – but the hope is that the work remains within budget and the money is not needed.
The full council agreed to make the money available if it is needed “to meet a forecasted shortfall in the risk allowance”.
Shetland Islands Council (SIC) would make the case to the UK Government – the project’s external funder – to provide that sum if it is required, according to a report heard by councillors in private.
SIC chief executive Maggie Sandison said she was unable to comment on the details of the exempt report.
However she said a “contingency budget is needed because we’re not at the end of the project yet”.
Although the budget was approved, “that money is unspent, it’s unallocated”.
Some contingency money has already been used as a result of delays, such as due to adverse weather.
Sandison added: “When you get to a point where your contingency has been allocated, then the right thing to do is to seek more contingency, and that’s all that’s happened.”
The chief executive added that there is a “possibility there could be unforeseen costs” with the project, such as more weather delays.
A briefing to elected members said that as of late May “weather-related contractual compensation events” had accounted for around half of project risk allowance costs to date.
“The project’s risk allowance budget has reduced accordingly, with ongoing monitoring and analysis being undertaken to manage remaining risks,” the note said.
“Alongside weather impacts, ground conditions encountered during dredging works and the conditions of existing infrastructure have also contributed to expenditure from the risk allowance budget.”
Work on a new Fair Isle ferry and upgrades to the island’s harbour are now expected to be completed in November this year, after being pushed back due to weather delays.
It is part of a project to replace the ageing Good Shepherd IV ferry, with the new vessel requiring harbour improvements in Fair Isle and Grutness in Shetland’s South Mainland.
The anticipated total cost of the project is £45.4 million, funded by £18.6 million from the council and a grant of £26.8 million from the UK Government’s ‘Levelling Up’ fund.
The National Trust for Scotland, which is the principal landowner for Fair Isle, has reiterated that it has not provided any funding for the project.
Questions were previously raised on social media as to whether the National Trust was helping with the project costs.
A spokesperson for the National Trust for Scotland said they were “not a funding partner” and said that the project was for “public infrastructure” being delivered by the SIC with government financial support.
“However, as Fair Isle’s principal landowner and the operator of the island’s aerodrome, another vital lifeline service that is costly to operate and continues to require significant financial support from our charity, we remain in regular contact with the project developers,” they said.
“Our focus is on helping ensure the project is successfully delivered in a way that benefits the island’s long-term sustainability while continuing to support the essential transport links on which the community depends.”
Remedial work on upgrades to the Grutness pier have begun in recent weeks before final sign-off, with the focus being on rock armour breakwater.
Become a member of Shetland News
Shetland News is asking its readers to consider paying for membership to get additional perks:
- Removal of third-party ads;
- Bookmark posts to read later;
- Exclusive curated weekly newsletter;
- Hide membership messages;
- Comments open for discussion.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a member of Shetland News by either making a single payment, or setting up a monthly, quarterly or yearly subscription.
Already a member? Sign in to hide this message.
