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IOS Ferry Link receives Conditional Approval of Funding

posted Oct 26, 2010, 3:21 PM by Richard Cliffe

The IOS Ferry Link project project received conditional funding approval in an announcement from the Dept of Transport today.  The Dept has indicated that there will be bilateral discussions between the Dept and the promoter  Cornwall Council.  These will “look carefully at the costs and scope of each scheme and explore possibilities to reduce costs and increase local contributions” .  The intention is  “agree a way forward on funding by January 2011 but this will be dependent on progress on these issues”.

See here for Dept of Transport press release:

http://nds.coi.gov.uk/clientmicrosite/Content/Detail.aspx?ClientId=202&NewsAreaId=2&ReleaseID=416188&SubjectId=36

The key bit relating to IOS Ferry is below:

6. The department will consider the following three schemes with conditional approval for full approval and will set out specific requirements with each promoter bilaterally:

- Walton Bridge (Surrey)
- Reading Station Highway Works
- Isles of Scilly Link

The department will look carefully at the costs and scope of each scheme and explore possibilities to reduce costs and increase local contributions. We hope to agree a way forward on funding by January 2011 but this will be dependent on progress on these issues.

Comment:

Consider the scheme as having two separate parts:

        Harbours (both) with 32% EU funding, remainder Central Govt

        Vessel, no EU funding (ineligible because it moves) £10 million Cornwall Council (prudential borrowing repaid by charter fees) remainder Central Government.

Total Central Govt grant believed to be £41 million.

One can speculate that two of the issues to be looked at are:

-          Can the Council contribution be increased by increasing borrowing.  They could argue borrowing more towards the vessel is justified because the vessel charter fee covers the borrowings (or not as the case may be).  The downside would be that the planned ship replacement fund would not grow as intended in the Council’s plan.

-          The vessel may be delayed.  The IOSSC has publically stated to the Council that the Scillonian can continue into 2014 with manageable investment so it could be ordered 2 years later.

As the funding currently stands Cornwall Council pays nothing towards the work on Penzance Harbour.  

 

 

 

 

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