In Brief

• The funding decision is delayed, with end of Feb now the deadline.

• It is not known which items are the main sticking points other than overall cost (Government contribution currently  £41 million).

• Keeping the Scillonian in service is proving problematic for the IOSSC because the Maritime & Coastguard Agency is demanding expensive safety related upgrades even for the 2011 season.  Negotiations are ongoing between MCA & IOSSC.

• You can gauge for yourself Andrew George's ( MP's) contribution to delivering the project from his Radio Scilly interview on 7 Feb 11 interview (see Press News)
  

• Sainsbury’s have submitted a planning application for the Penzance Heliport site.   Their purchase of the site is condition on receiving planning permission

 Implications of Delay

 Key tenders for the project expire at the end of March 2011 and have already been extended at least once already.  If the tenders expire then a new competition is required for building the vessel and operating it (currently the IOSSC has been selected to operate the vessel). 

 New competitions mean a delay of at least a year which means the current vessels have to continue operating for an extra year (until 2014).  This was not thought to be a problem in early 2010 but the Maritime & Coastguard Agency have since got ‘cold feet’ about continuing to licence the Scillonian without major investment.  See below.

 Scillonian.

 The IOSSC position on the operating life of the Scillonian in early 2010 was that it could be kept in service until 2014 with ‘managable investment’.  Since Dec 2010 the Maritime & Coastguard Agency (who licence the vessel) has demanded expensive safety related improvements be completed if the vessel is to retain it current maximum passenger load of 600.  The IOSSC will be in a dilemma because the changes are major investments in an old vessel with a limited life.  It may make more sense to lease or buy a second-hand vessel and especially if the project is not going ahead as planned.  The IOSSC needs to know the DofT decision.  If it does nothing then the MCA could enforce a lower passenger limit (the regulations are apparently less demanding for vessels limited to around 400 passengers).    As the vessel is not compliant with current Europe-wide safety regulations the MCA would be within its rights to refuse a licence although this would be an unlikely and drastic measure  

 Helicopter Service

 The future (or lack of a future) for the Helicopter service is an important consideration in the IOS Ferry Link project.  If the service ceases then the capacity and reliability of the ferry is vital to deal with the passenger demand and vulnerability to weather of the fixed wing service.  It can be argued that the winter service also becomes critically important if the helicopter is withdrawn. 

 If the sale of Penzance Heliport goes ahead then BIH can repay the ~£5.4 million loan repayments due in 2011 (Note 1)  and survive as a business.  Whether it will go ahead and invest in a new site is another matter.. A site at St Erth is reportedly being explored but will the BIH senior management (and their bankers) want to invest in a link with a limited future given reducing passenger numbers due to competition from Skybus which is inherently cheaper to run.

 Note 1.  Figures taken from BIH annual accounts for year ending 31 Dec 2009 (publically available from Companies House)