Significant progress made at Lerwick Harbour

The overall growth has been achieved despite some high maintenance costs and the decline of some sectors, such as fishing, states the latest economic impact assessment of the port.

The report concludes: “While jobs directly dependent on harbour activities have fallen by over 20%, the value of output in the economy has grown substantially.

“This means that Lerwick Port Authority is now in a stronger position to move forward in the next five years than it was in 1999 and, indeed, there are several possible opportunities for new development and growth over the next five years.”

Port Authority Deputy Chief Executive Sandra Laurenson, commented: “While there are still issues to be resolved, the assessment confirms that the port is on the right track, with considerable progress made and further potential to be realised.”

Commissioned by the Authority to update studies carried out in 1996 and 2000, the “Economic Impact Assessment of Lerwick Harbour on the Shetland Economy” has been 50% funded by Shetland Enterprise and again undertaken by A B Associates, Scalloway.

The assessment states: “All consulted felt that Lerwick Harbour met the needs of their organisation. The general view is that the Authority is doing a good job and that the harbour is in a good location and provides good facilities, although some felt that the charges were on the high side.” However, the report notes that “evidence from other ports does not show Lerwick being much different” on costs.

The report found that those consulted viewed Shetland Islands Council’s potential development of a bridge to the island of Bressay – with navigational restrictions on vessel movements – as the main threat to the harbour. “In more general terms, the local authority was seen as a threat both in terms of the bridge issue, the breakdown of communication between the two organisations, and also the potential development of other Shetland Islands Council-owned piers.”

The study notes key changes between 1999-2006 including:

• A 65% increase in general vessels – including cargo and roll-on/roll-off – with overall ship numbers down 20%, due primarily to a 50% drop in fishing vessels.
• The average tonnage of vessels increased 140%, with gross tonnage doubling in a significant reversal of the previous trend – as there was in cargo handled, with 37% growth. Roll-on/roll-off cargo grew 45%.
• Passenger movements – domestic, international and cruise - increased by 102%.
• Visiting yachts increased steadily to more than 450 annually.
• Fishing-related activity fell by 50%, while the gross tonnage of vessels and landings rose. The value of landings increased by 277%.

In 2006, 149 businesses and 1,138 jobs were directly dependent on the harbour (2000 -129 and 1,432), representing 10% of Shetland employment. The increased gross impact of the harbour is calculated at 2,242 jobs and £311 million of output in 2006, representing almost 20% of jobs and 45% of output in Shetland.

The Port Authority generates £11.4 million in the local economy, with 77% of its income coming from external sources and with 80% of its expenditure made locally.

A B Associates concludes: “The main opportunities are in fish processing, oil-related decommissioning and tourism. Over 270 jobs and £30-45 million of output could be generated over five years if opportunities are realised.”

The consultants identify various key investment proposals, including harbour dredging and reclamation; fish processing and fish meal factory developments; further improvements for yachts and cruise ships; a new fish market, a new deep-water jetty, and new business units.