ANNUAL REVIEW 2019 A STRATEGIC NATIONAL ASSET

SMART, SECURE, SUSTAINABLE OPEN TRUST PORT www.pocf.co.uk PORT OF ANNUAL REVIEW 2019 2 O ARD O G ARD O MERCI SIB BRI A

O GRAZIE WELA’LIN DANKESCHÖN SP GRACIAS THANK GRAZIE YOUASANTE R TAPADH LEIBH CI

WELA’LIN XA GRACIAS ER PA

KIITOS M S U

DANKESCHÖN J

2019 was another exceptional year at the Port of .

Thanks to the hard work and support of all the Port’s stakeholder groups, we sustained the growth of recent years and achieved significant benefits for the region. Thank you to our staff, customers, communities, local businesses, local and national politicians and our regulators – your contribution is invaluable.

In 2019, oil & gas activity continued throughout the Firth, with major oil rig Inspection, Repair and Maintenance (IRM) projects helping to secure and safeguard jobs locally. The Port recorded its busiest cruise season, providing a huge boost to local businesses and the economy. The Cromarty Firth expanded its experience and track record in the burgeoning offshore wind sector, supporting the construction of the 950MW Moray East Offshore Wind Farm. Private facilities in the Firth also enjoyed success: from TechnipFMC at Highland Deephaven returning to 24-hour production, to major offshore energy developments utilising Global Energy Group’s Nigg Energy Park.

We’ve outlined a selection of the stories that made 2019 such a fantastic year for the Port of Cromarty Firth in our annual review and invite you to learn more about our activities.

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KEY FACTS 2019

TURNOVER £10.6M £

NUMBER OF RIGS SERVICED AND REPAIRED IN THE CROMARTY 715 FIRTH TO DATE

VESSEL TONNAGE (ARRIVALS) 10.1M GT

973 £275M ACTS PER ANNUM OF VALUE TO THE PILOTAGE HIGHLAND ECONOMY

SURPLUS AFTER TAX 1 IN 6 JOBS IN THE £2M TO BE REINVESTED TRAVEL TO IN THE PORT’S WORK DEVELOPMENT AREA (HIE)

PRIVATE OVER FACILITIES: NIGG ENERGY PARK, £55M NIGG OIL TERMINAL, INVESTED IN RECENT YEARS TO HIGHLAND DEEPHAVEN DEVELOP THE PORT’S AND ADMIRALTY PIER INFRASTRUCTURE

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PORT OF CROMARTY FIRTH – TRUST PORT MODEL

The Port of Cromarty Firth was established through an Act of Parliament in 1973. As the largest port in the Highlands, our priority has always been the safe navigation of vessels and people in and out of the Cromarty Firth.

A Trust Port run by an independent Board of Directors, our mission is to develop, improve and safeguard the Cromarty Firth for the benefit of all stakeholders. These include port users, regional businesses, employees, regional businesses, employees, local communities and the government.

We have achieved this by balancing economic, social and environmental sustainability: economic sustainability through the doubling of revenue in the past six years, social sustainability through the provision of high- quality employment opportunities, and environmental sustainability by ensuring that every activity takes into account the Firth’s special environment and wildlife.

The Port is not publicly or privately owned and we receive no regular external funding, meaning we must generate our own income. As part of the Trust Port model, 100% of our profit – known as surplus – is reinvested into the development and enhancement of the Port. Port-related activity is estimated to generate approximately £275m per year in economic activity, in turn boosting local employment, business opportunities and tax revenues.

We also hold authority over the entirety of the Port’s assets, such as our quaysides and laydown areas, which we are tasked with managing and improving for the benefit our stakeholders, and to leave them in a better state than when we arrived.

5 OUR PEOPLE

Once again the Port of Cromarty Firth team grew this year, with a total of 35 staff employed in 2019. Since 2014 the Port has nearly doubled its staff headcount as a result of increased levels of activity and projects supported at our facilities.

As a Trust Port, almost every decision we take is about generating jobs and opportunities for the communities and businesses based around the Cromarty Firth and in the wider Highlands. We’re immensely proud that an estimated one in six local people is employed in activities related to the Port, and our relatively small team is one of the most productive of any port in the UK.

The driving force behind the Port’s success has been its people. Our motivated team are extremely passionate about the local area and work tirelessly to see the region benefit from our value-generating activities. The Port makes significant investments in staff training and development. This ensures we have the best team possible to improve, safeguard and develop the Cromarty Firth as a Port, for the benefit of all stakeholders. As well as investing in our people, the Port has developed a strong culture in health, safety and security to ensure we create a safe working environment for our staff to grow and succeed.

MY PORT STORY: HAMISH HARDIE

Born and raised on a working farm just outside of Auldearn, Hamish never had an interest in pursuing a career in farming. He was instead drawn to the sea and at 17 years old he started his working career by joining the Merchant Navy. After eight happy years of navigating the seas and travelling around the world, Hamish returned to the family home and joined the Cromarty Firth Port Authority as a Marine Assistant in November 1981, beginning his 39-year tenure.

Tasked with operating the Control Room and manning the Udale pilot boat, Hamish enjoyed the fast-paced working life at the Port where the duties involved maintaining navigation buoys and survey equipment, patrolling the Firth and completing all the essential marine preparations for rig arrivals. Having successfully held a range of roles during his time at the Port, his duties have continued to be focused on the shore-based operations at the Invergordon Service Base. Hamish now holds the position of Facilities Supervisor, where his skills and expertise earned through years of working in the marine environment can be maximised. His work ethic and attitude have made him an integral part of the Port’s Operations team, who have benefitted greatly from his wealth of experience and knowledge.

Hamish comments: “The variation of my role is what I love the most, every day at the Port is different and after almost 40 years here, I’m still learning new skills and challenging myself. I have very fond memories from my time here, chief amongst them being the commissioning and naming ceremony of the Ocean Alliance rig and witnessing the first tanker at Nigg Oil Terminal.”

While Hamish is looking forward to travelling to faraway places and seeing old friends upon his retirement in 2020, he admits that he will miss his colleagues at the Port and spending his days on the Cromarty Firth.

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 6 7 PORT MARINE SAFETY CODE

The Port Marine Safety Code (the Code) applies to Marine Safety Code. Internal audits are also carried all harbour authorities in the UK that have statutory out by the marine management, or the Port’s health powers and duties. The Guide to Good Practice on and safety team, where this is deemed necessary Port Marine Operations was refreshed in February by changes in procedures or when advised by the 2018 in conjunction with the current version of the designated person. Code which was published in 2016. Channel navigation buoys are maintained by Port of Cromarty Firth recognises that a robust the Northern Lighthouse Board under contract. Marine Safety Management System (Marine SMS) Navigation aid statistics of reliability from 1 Jan 2019 requires external and internal checks to ensure that to 31 Dec 2019 performance against its policies and procedures is reviewed. An independent external audit is carried Category 1: Target 99.80%, actual 100% out annually by the designated person, with the Category 2: Target 99%, actual 99.69% results provided to the Duty Holder (Board of Category 3: Target 97%, actual 100% Directors). The last external audit confirmed the Port was deemed compliant across all areas of the Port

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 8 OUR SECTORS

Oil & Gas

Oil & Gas (45% of revenue. Down 9% as a percentage of turnover compared to 2018)

Port of Cromarty Firth continues to be recognised as A relatively low average oil price was recorded a leading European facility for the support of North throughout the year, which traded at an average Sea oil & gas operations and activity levels remained of $64/barrel. Within the mature North Sea basin, stable throughout 2019. Significant oil rig Inspection, a number of oil majors such as Chevron and Repair and Maintenance (IRM) projects were completed, ConocoPhillips, are selling their offshore assets to utilising the Firth’s first-class facilities and the expertise smaller operators, who have entered the market to of local supply chain companies. Offshore project and exploit the remaining available reserves. This trend is engineering contractor, Semco Maritime, extended its in line with the North Sea’s managed decline and the contract for the Queens Dock facility at the Invergordon UK’s energy transition, however, the industry remains Service Base, having recorded its most successful year of an important employer to and within the rig projects in 2018. TechnipFMC at Highland Deephaven Cromarty Firth area. went back to 24-hour production and recruited over 100 new staff, while Global Energy Group at Nigg Energy Park won a multi-million-pound contract for the refurbishment of the Well-Safe Guardian plug and abandonment unit.

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 9 Cruise

Cruise (26% of revenue. Up 5% as a percentage of turnover compared to 2018)

The Port of Cromarty Firth welcomed 104 ships and The global cruise industry continued to expand in over 167,000 passengers in 2019, representing the 2019, with a record 24 new cruise ships undertaking busiest season recorded since we first welcomed cruise their maiden voyage – ranging from small luxury ships into the Cromarty Firth over 40 years ago. The vessels to megaships. The Highlands have become season brought with it some of the world’s largest a popular destination in Northern Europe and the cruise ships, taking advantage of the Firth’s deep water industry plays a crucial role in supporting local and the incredible attractions our region has to offer. employment, particularly in the hospitality and tourism sectors. This activity has boosted the Highland economy by a massive £18m with many businesses in the region reaping the benefits from cruise passenger visits. These included popular tourist attractions such as Cawdor Castle, Jacobite Cruises and Glenmorangie Distillery, as well as local visitor attractions such as Invergordon Museum and EcoVentures in Cromarty.

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Renewables

Renewables (10% of revenue. Up 3% as a percentage of turnover compared to 2018)

Scotland continues to be at the forefront of renewable Farm. The Port of Cromarty Firth and local supply chain energy developments. Significant increases have been businesses have developed a valuable track record in the made in electricity generation over recent years from industry and will play a vital role in supporting the Moray these sustainable sources, which have increased more East project, which shall utilise our new Phase 4 expansion. than three-fold from 8,003GWh in 2007 to 30,521GWh in 2019. This equates to approximately 90% of Scotland’s Crown Estate Scotland has plans in place to launch electricity consumption – a fantastic achievement. the next leasing round for Scottish offshore wind Offshore wind is now the cheapest form of large-scale developments, with up to 10GW of capacity up for grabs. electricity generation and both the Scottish and UK The Port is in a strong position to capitalise on the future Governments have committed to investing further into pipeline of opportunities and is working proactively to this growing industry. ensure utilisation of the Cromarty Firth is maximised.

In 2019, installation of the 588MW Beatrice Offshore Wind Farm was completed and work began on the construction of the 950MW Moray East Offshore Wind

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 11 HMS PRINCE OF WALES

Given the Port of Cromarty Firth’s rich The Port is one of only a handful of harbours in the whole historic naval connection, we were delighted of the UK able to accommodate a vessel of such size and to welcome the latest addition to the Royal stature. In total, HMS Prince of Wales called into the Firth on three occasions to refuel and resupply. Navy’s fleet, HMS Prince of Wales and its crew. Cromarty Firth was the £3bn aircraft Praising their experience at the Port, Martyn Mayger, carrier’s first port of call after leaving Rosyth Lieutenant Commander of HMS Prince of Wales, said: Dockyard, where the 65,000-tonne vessel “Sincerest thanks for your support to HMS Prince of Wales as we progressed through inaugural trials. Since the first was built, prior to undergoing sea trials in the day we touched base with you, the Port of Cromarty Firth North Sea and outer . has been pragmatic, attentive and totally supportive in helping us achieve our objectives.” Upon its arrival in the Cromarty Firth, local residents

flocked to the Port to enjoy a full view of the vessel The Port would like to extend warm thanks to everyone and the 600-strong crew on board. locally for accommodating the ship and its crew, and for The visit to Invergordon also provided some of the making them feel welcome. sailors the opportunity to venture inland and even bag a Munro by ascending Ben Wyvis during some well-earned down time.

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CHAIR’S STATEMENT TO ACCOUNTS 2019

allow further reinvestment and Richard has been a highly valued development of the Port for the Board member since January benefit of all our stakeholders. 2014. His significant knowledge and experience within the oil The Port’s success in 2019 is & gas sector helped secure a principally due to the hard work, number of opportunities for our determination and commitment of Trust Port, resulting in increased its staff and the Board would like to regional benefits and development. highlight their thanks and gratitude Additionally, thanks must be given for the staff’s continuing support. to Alan Cook, who also stepped The Port continues to invest heavily down from the Board in December in skills and training, demonstrating 2019, having provided the Port a strong dedication to employee with exceptional marine expertise development and growth. This since his appointment in 2014. We proactive commitment to staff wish them both well in their future It is with great satisfaction that I means we have a highly efficient ventures. can report on behalf of the Board and productive team, contributing that 2019 was another outstanding significantly to the business’s The Port’s growth and role as year for the Port of Cromarty excellent performance. a national strategic asset has Firth, in which the extraordinary resulted in an increasing regional I would also personally like to growth of recent years was development responsibility and we give thanks to Richard Ballantyne, sustained. Turnover of £10.6m was are very proud of the employment previous Chair of the Board, who recorded, with a surplus (profit and economic benefits which stepped down in December 2019 after tax) figure of £2m achieved. are supported by our business. after a successful year at the helm. This excellent performance will The diversification strategy

The Port’s success in 2019 is principally due to the hard work, determination and commitment of its staff and the Board would like to highlight their thanks and gratitude for the staff’s continuing support.

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implemented by the Port’s senior an appropriate balance of benefits. management over recent years is Our annual public meeting was delivering substantial growth in well attended by local stakeholders the Port’s business and benefitting and hosted at Invergordon Golf the economic wellbeing of the Club. Quarterly meetings with local region. This was recognised at the Community Councils, port users prestigious Institute of Directors and staff continued throughout the 2019 Awards, where the Port’s year, as well as the publication of Chief Executive, Bob Buskie, was the Port newsletters. We continued named the Highlands & Islands to work closely with Highlands Regional Director of the Year – a and Islands Enterprise (HIE), The great accolade reflecting his strong Highland Council and VisitScotland, leadership. to ensure the benefits we generate for our local communities and The Cromarty Firth has been businesses throughout the engaged in North Sea oil & gas Highlands are maximised. projects for over 40 years and the sector continues to be a core The Cromarty Firth is a very aspect of the Port’s activity. A special marine environment series of infrastructure investments and, as guardians of the Firth, and major developments at the we must ensure the area – and Invergordon Service Base has its inhabitants – are protected attracted offshore wind projects for future generations. We are and additional cruise liners to the fortunate that the Port’s facilities Port. The diversification into these host a wide range of birds and burgeoning sectors complements marine mammals, such as terns, the expertise of local supply eiders, seals and dolphins, whose chain companies and will serve to protection we take very seriously. ensure the long-term economic Once again, we organised the Great sustainability of the Port. Big Firth Beach Clean, as part of the Great British Beach Clean, with As a Trust Port, we are focused on over 200 local school pupils, and sustainably developing, improving helped inform them on the dangers and safeguarding the Cromarty of litter in the marine environment. Firth for the benefit of all its diverse stakeholder groups. These groups Sustainability is at the heart of include our staff and customers, all the Port’s activities: balancing businesses throughout the region, economic drivers, the needs local communities and local and of people and respecting the national government. In 2019, sensitivities of the environment to significant stakeholder engagement create a Port that everyone can feel was completed with these groups a part of and be proud of. to ensure the Port understands their individual requirements and Roger Eddie Chair of the Board of Directors help us align our activities to ensure

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CHIEF EXECUTIVE’S STATEMENT TO ACCOUNTS 2019

In the face of sectoral uncertainty faced in the town. These have across several of the Port’s core been very positive and proactive markets, I am pleased to report workshops, and a range of potential that our business performed well solutions have been identified. throughout 2019 and once again With the installation of the Beatrice surpassed our forecasted targets. Offshore Wind Farm complete, The relatively low North Sea oil construction of the £31m new price brought significant challenges berth and laydown area (Phase 4) to the industry and consequently commenced at the beginning of impacted on the level of activity the year. This is in preparation to taking place in the Firth. We saw host the turbine components for an increase in the average number EDP Renewables’ (EDPR) 950MW of rigs which were anchored Moray East Offshore Wind Farm, in our sheltered deepwater, which is a substantial project for and TechnipFMC at Highland The Port of Cromarty Firth the entire Cromarty Firth and, when Deephaven went on a recruitment has developed a strong health complete, will be one of the largest drive as 24-hour production & safety culture and remains constructed offshore wind farms resumed at the spoolbase. committed to not only safeguarding in the world. The Port organised a Unfortunately, a reduction in oil rig the individuals who work at the ‘Meet the Buyer’ event with EDPR Inspection, Repair and Maintenance Port, but also protecting the and partners from the Moray East (IRM) work impacted other sensitive environment of the project to enable local companies companies based in the Firth. Cromarty Firth. In 2019, there were to meet key purchasing decision no major first aid or environmental 2019 was a record-breaking cruise makers and maximise opportunities incidents across 75,519 labour season at the Port, in which we for local businesses from this hours. This fantastic achievement is welcomed 104 ships and over £2.6bn project. testament to our ongoing journey 167,000 passengers, contributing The completion of the latest of continuous improvement in an estimated £18m to the regional expansion will bring the total Health, Safety, Environment and economy. With the Port’s help, a investment in the Port’s facilities to Quality (HSEQ). Once again, the number of local visitor attractions over £55m in recent years, targeted Port passed its health & safety are now reaping the benefits from towards securing further Scottish audit with flying colours and cruise passenger visits, such as offshore wind projects and creating received recertification for the Tarbat Discovery Centre and the a pipeline of opportunities and ISO awards 14001 – Environmental Invergordon Museum. The cruise jobs for local people well into the Management, 9001 – Quality sector has been a tremendous future. Whilst supported by funding Management System and 45001 success story for the region, and from both HIE and the European – Occupational Health and Safety. the record season represented Regional Development Fund The Port’s performance and 26% of the Port’s income in 2019. (ERDF), the majority of this £55m success was also recognised by The Port has been working with investment has been financed Maritime UK, after being presented , Invergordon from the Port’s own funds through with the UK National Sustainability Community Council and the reinvestment of our operating Award for our work in balancing Invergordon Development Trust surplus. economic, social and environmental alongside local tour operators and sustainability for all of the Port’s to identify solutions stakeholders. to the traffic management issues

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Recognising the importance of In 2019 the Port awarded £36,000 The accomplishments enjoyed in the renewable energy sector and to projects throughout the Firth as 2019 could not have been achieved expertise of local organisations part of our Community Sponsorship without the professional and situated in the Firth, the Port has Programme – a 24% increase on dedicated team who work at the taken a leading role with Highlands 2018’s total. Recipients of funding Port. We are extremely fortunate & Island Enterprise (HIE) and Global included Ross Sutherland RFC, to have such passionate and driven Energy Group to develop a cluster Cromarty Community Care and staff, who work tirelessly to bring of excellence in deepwater offshore Community Spirit Invergordon. prosperity to the Port and make wind energy. The cluster, named Towards the end of the year we significant contributions to the local DeepWind, now features over 400 were also excited to launch our new and regional economy. members drawn from industry, £600,000 custom-built pilot boat, academia and the public sector. The Dalmore, which will safely navigate Bob Buskie Chief Executive ambition of DeepWind is to attract vessels and their crews entering more offshore wind projects to the and exiting the Firth. region, bringing investment and In December, Roger Eddie took long-term sustainable employment over as Chair of the Board, with them. replacing Richard Ballantyne. Given the Port’s historic naval Roger previously served as Vice connection, we were delighted to Chair and has an extensive 35 welcome the latest addition to the years’ experience as a specialist Royal Navy’s fleet – HMS Prince business banker, mainly spent in of Wales. The Port is one of only a the Highlands & Islands. He has handful of harbours in the whole been an integral part of our Board of the UK able to accommodate since 2013 and his knowledge and the 65,000-tonne aircraft carrier. experience will stand us in good HMS Prince of Wales called into stead as we look to build on the the Firth three times in 2019 in Port’s recent successes. I would like order to refuel and resupply, to thank Richard Ballantyne and while completing sea trials in the Alan Cook who stepped down from formidable North Sea under the the Board this year, and welcome ownership of the Aircraft Carrier Zeina Melville and Graham Peach Alliance (ACA). who have joined as directors.

The Port’s performance and success was also recognised by Maritime UK, after being presented with the UK National Sustainability Award for our work in balancing economic, social and environmental sustainability for all of the Port’s stakeholders.

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PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 18 v

STATEMENT OF COMPREHENSIVE INCOME 2019 2018 FOR THE YEAR ENDED £ £ 31 DECEMBER 2019

Turnover 10,604,417 11,378,815

Cost of sales (5,723,236) (5,373,290)

Gross profit 4,881,181 6,005,525

Administrative expenses (2,323,847) (2,530,027)

Operating profit 2,557,334 3,475,498

Other income from investments 250,000 150,000

Interest receivable and similar income 13,327 22,156

Interest payable and similar expenses (219,380) (140,658)

Other finance costs (74,000) (72,000)

Gain on disposal of fixed asset investment - 709,538

Profit before taxation 2,527,281 4,144,534

Tax on surplus (530,690) (748,859)

Surplus for the financial year 1,996,591 3,395,675

Other comprehensive income

Actuarial (loss)/gain on defined benefit pension schemes (12,000) 591,000

Tax relating to other comprehensive income 2,040 (100,470)

Total comprehensive income for the year 1,986,631 3,886,205

The surplus and loss account has been prepared on the basis that all operations are continuing operations.

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BALANCE SHEET 2019 2018 AS AT 31 DECEMBER 2019 £ £ £ £

Fixed assets Tangible assets 54,394,210 32,672,634 Investments 50 50

54,394,260 32,672,684 Current assets Stocks 10,036 10,160 Debtors 4,245,726 1,654,245 Cash at bank and in hand 3,206,677 12,642,070

7,462,439 14,306,475

Creditors: amounts falling due within one year (14,292,565) (4,011,364)

Net current (liabilities)/assets (6,830,126) 10,295,111

Total assets less current liabilities 47,564,134 42,967,795

Creditors: amounts falling due (15,262,197) (13,109,254) after more than one year

Provisions for liabilities (2,713,245) (2,256,480)

Net assets 29,588,692 27,602,061

Capital and reserves Profit and loss reserves 29,588,692 27,602,061

The financial statements were approved by the Board and authorised for issue on 25th September 2020 and are signed on its behalf by:

Roger Eddie Chair of the Board of Directors

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STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019 2019 2018 £ £ £ £ Cash flows from operating activities

Cash generated from operations 3,239,412 5,667,323 Interest paid (219,380) (140,658) Income taxes paid (700,099) (794,490)

Net cash inflow from operating activities 2,319,933 4,732,175

Investing activities (22,344,996) (2,772,173) Purchase of tangible fixed assets – 101,000 Proceeds on disposal of tangible fixed assets – 710,000 Proceeds on disposal of fixed asset investments – 500,000 Repayment of loan notes (60,673) (49,844) Interest received Dividends received 250,000 150,000

Net cash used in investing activities (22,155,669) (1,361,017)

Financing activities Proceeds from government grants 2,846,480 75,266 Proceeds of new bank loans 8,081,691 – Repayment of bank loans (527,828) (86,830)

Net cash generated from/(used in) financing activities 10,400,343 (11,564)

Net (decrease)/increase in cash and cash equivalents (9,435,393) 3,359,594 Cash and cash equivalents at beginning of year 12,642,070 9,282,476

Cash and cash equivalents at end of year 3,206,677 12,642,070

For a full version of the accounts, please email [email protected] or visit www.pocf.co.uk

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BOARD ATTENDANCE REPORT

The members who served in the year were:

Richard Ballantyne, Chair (appointed 1 Jan 2014, Vice Chair from 1 Jan 2016, Chair from 1 Jan 2019 – resigned 31 Dec 2019) Roger Eddie (appointed 1 Jan 2013, Vice Chair from 1 Jan 2019, Chair from 1 Jan 2020) Robert Buskie (appointed 28 Jun 2013) Angus McMaster (appointed 1 Jan 2014) Alan Cook (appointed 1 Feb 2014 – resigned 31 Dec 2019) Hugh Mitchell (appointed 1 Jan 2018, Vice Chair from 1 Jan 2020) Stewart Ralston (appointed 1 Jan 2018) Rhona Harper (appointed 1 Jan 2019)

Secretary: David Bell

Attendance at Board meetings in 2019: R Ballantyne, Chair 4/6 R Eddie 6/6 R Buskie 6/6 A McMaster 6/6 A Cook 6/6 H Mitchell 6/6 S Ralston 6/6 R Harper 5/6

Auditors: Johnston Carmichael LLP, Inverness Bankers: The Royal Bank of Scotland, Solicitors: Burness Paull LLP, Aberdeen

Audit, Risk & Performance Management Committee Members: A McMaster (Chair), A Cook and S Ralston

Remuneration Committee Members: H Mitchell (Chair), R Harper and S Ralston

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23 24 SUSTAINABILITY REPORT

The Port of Cromarty Firth is driven to Social Sustainability develop, improve and safeguard the Cromarty Firth for the benefit of all of its stakeholders. The number of staff directly employed by the Port increased again in 2019, with significant investments We achieve this by balancing economic, social made in staff training and development. Through our and environmental sustainability – contributing work with local schools and Jobcentre Plus, we are in a positive way to the economy, local people helping to educate and support the future workforce. and the Firth’s special marine environment. Thanks to the £31m quayside expansion and multi- Such a focus on these thee pillars of million-pound contract award from Moray East sustainability saw the Port achieve success at Offshore Wind Farm, the Port continues to provide a the inaugural Maritime UK awards, scooping sustainable future for local supply chain companies and employees. the Sustainability Award. The Port continued to support community groups, We outline here some of the activities undertaken clubs and other local good causes through the that helped us achieve this accolade. Community Sponsorship Programme, with almost £36,000 awarded in 2019. Work has also continued with local businesses to help them understand, Economic Sustainability access and promote themselves to the burgeoning cruise and renewable sectors. The Port has successfully put in place a robust diversification strategy, opening up revenue channels from key growth sectors such as renewables and cruise. As a result, our turnover and surplus have Environmental Sustainability doubled over the past six years and allowed us to open up new facilities and provide greater The Port ensures that all its activities undertaken in opportunities for local companies. Our improved the Firth take into consideration the sensitive and financial performance has also allowed us to make protected surrounding environment. We work in further investments in the Port’s infrastructure to harmony with the wildlife that lives or visits the Firth expand our capacity and capabilities. and strict measures have been implemented to ensure they are safeguarded. For the fourth year running, we Large engineering companies, such as Global organised the Great Big Firth Beach Clean, as part of Energy Group and Semco Maritime, capitalise on the Marine Conservation Society’s Great British Beach the Port’s world-class facilities and attract major Clean. The popular event, which helps to keep our projects and employment to the region. We operate coastline pristine, involved over 200 pupils from five an ‘Open Port’ philosophy, which allows businesses local schools, as well help from teachers, Port staff and the opportunity to utilise the Cromarty Firth’s deep other volunteers. sheltered waters and safely work alongside the Port’s other tenants. The Port are actively investigating measures to record and reduce the carbon footprint from our operations. Recognising the importance of the renewable energy This will ensure we are contributing to a sustainable sector and expertise of organisations situated in the future and the net zero emissions targets set by the Firth, the Port has worked collaboratively with Global . Energy Group and Highlands & Islands Enterprise (HIE) to develop a cluster of excellence in deepwater Once again, the Port passed its health & safety audit offshore wind energy. The cluster – named with flying colours and received certification in ISO DeepWind – will look to secure more projects to the 14001 (Environmental Management), ISO 9001 (Quality region, bringing further investment and long-term Management System) and ISO 45001 (Occupational sustainable employment. Health and Safety).

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COMMUNITY SPONSORSHIP PROGRAMME

Port of Cromarty Firth’s Community 1. Skills development, employability, or job creation Sponsorship Programme continues to provide 2. Vessel crew or passenger support valuable support to community projects, clubs Environmental protection and/or enhancement and other local causes. The programme aspires 3. to improve, safeguard and develop the Port, 4. Inter-community events or projects which enhance the Firth and its surrounding communities for and/or benefit more than one of the nine Cromarty Firth communities and encourage inter-community the benefit of all stakeholders. collaboration. This can include historical projects Applicants must be based in one of the nine related to the Port and the Firth; providing they are accessible to all Firth residents. communities that border the Cromarty Firth and meet one of four qualifying criteria: In 2019, the Port supported projects from right around the Firth, as follows:

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Community Projects Sponsored in 2019 Ross Sutherland Rugby Football Club (RSRFC) £10,000 Heartstone, Dingwall £2,500 Invergordon Primary Schools: Park, Milton, Newmore and South Lodge £750 Nigg & Shandwick Community Council £5,600 Highland Girls Football Tournament £950 Saltburn & Westwood Community Council £1,300 Invergordon Golf Club £4,000 SR Film Photography £2,000 Cromarty Care Project £1,000 Rosemarkie Caves Project £2,000 Community Spirit Invergordon £1,200 Archaeology Dalmore WWI & WWII £1,500 Various smaller donations £3,123 Grand total £35,923

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STAKEHOLDER ENGAGEMENT ACTIVITIES

As a Trust Port, our policy is one of engagement and dialogue. The Port follows the Government’s guidance for good governance of Modern Trust Ports, which outlines the seven primary stakeholder groups with whom we should engage:

1. Staff 2. Port users (customers) 3. Local community (the nine communities that border the Cromarty Firth) 4. Local and regional businesses 5. Local government and authorities 6. National government 7. Other interested bodies, such as regulators

To keep all of these different groups informed, the Port undertakes a range of engagement activities, including:

Regular health and safety forums with port users Quarterly staff meeting Quarterly update meeting with port users Quarterly joint community council meetings Staff and community newsletters Port website (www.pocf.co.uk) Cruise stakeholder group meetings and Facebook page Regular press releases in the local media Annual public meeting Annual review

For further information regarding any of the above, please email [email protected]

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29 INVERGORDON CRUISE INFRASTRUCTURE WORKSHOPS

The Port has been working with the Highland solutions. The workshops have been very positive Council, Invergordon Community Council, and proactive, resulting in a number of agreed Invergordon Development Trust, Stagecoach actions to implement, such as: designated coach and taxi parking, passenger pick-up and drop-off zones and local tour operators to identify solutions to and zebra-crossings. the cruise traffic management challenges faced in Invergordon as a result of the continued The participants involved in the workshops will growth in cruise ships visiting the Cromarty continue to work together to ensure these solutions Firth. This follows feedback received from local are put in place and help improve cruise traffic stakeholders regarding issues such as parking, management within Invergordon. road safety and cruise passenger movements.

A series of workshops were held to articulate the key issues, identify the relevant parties involved and responsibilities, and collectively agree appropriate

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 30 DALMORE PILOT BOAT

The Port invested more than £600,000 in a The launch of the pilot boat, Dalmore, was celebrated new custom-built pilot boat, Dalmore, which will with an official dedication ceremony attended by staff, enable the safe navigation of vessels entering and their families and local stakeholders. The event included a blessing from local clergy, with the Dalmore Distillery exiting the Firth’s waters. This was the first of two providing whisky to toast the vessel and to use in the boats planned to be purchased by the Port to blessing. The Invergordon RNLI also donated a cake to upgrade the existing vessels and to help improve commemorate the special occasion. the pilot service. Dalmore was constructed by expert boat builders The purchase of the second boat is expected in 2020. The Safehaven Marine in County Cork, Ireland. pilot service is a critical part of the Port’s duty and helps to protect marine users and the surrounding environment while they are operating in the Cromarty Firth.

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 31 PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 32 PHASE 4 EXPANSION

In late 2018, the Port of Cromarty Firth was awarded a major contract from the Moray East Offshore Wind Farm, unlocking a new £31m quayside development. 2019 saw the construction of the new 218m berth and 11-acre laydown area commence in earnest. This was undertaken with minimised disruption to the local area and environment. Dredging operations stopped during the salmon smolt run, fill material has been transported by sea to limit road congestion and to reduce carbon emissions, and construction activities were largely kept to normal working hours to limit noise impact.

The expansion will be completed in 2020, ready for the arrival of the Moray East turbines, nacelles and tower sections. Local companies based in and around the Firth are also benefitting from the Port securing the significant ‘Intermediary Port’ contract award, helping them win contracts to support the offshore wind project and safeguard local employment opportunities.

A number of key organisations played a vital role in ensuring this major project was awarded to our region and the infrastructure expansion could take place. We would like to take this opportunity to thank partners and colleagues from Highlands & Islands Enterprise, the European Regional Development Fund, The Highland Council, Marine Scotland, Crown Estate Scotland, the Scottish Government and statutory consultees including NatureScot and Scottish Environment Protection Agency (SEPA). We would also like to give thanks to our wider stakeholders and local communities who backed the project and provided their invaluable support.

Funding the Project:

Port’s own funds (reinvestment) £10.25m HIE Funding inc. ERDF: £7.75m Bank borrowing: £13m Total cost: £31m 33 THE FUTURE – PHASE 5

To ensure continued growth and success, the Port of Cromarty Firth must continually adapt to key developments and opportunities presented in our primary markets. This allows us to remain commercially competitive and deliver value to our customers, whilst ensuring that our activities positively impact the people living and working in the Cromarty Firth and the wider Highland region.

Scotland’s Energy Transition

In the wake of the global climate emergency, the plans for the next leasing round for Scottish offshore Scottish Government announced a commitment to wind developments (named ScotWind), with up to some of the most ambitious statutory carbon emission 10GW of capacity up for grabs right on the Cromarty targets in the world – adopting a 2045 net zero goal. A Firth’s doorstep. Offshore wind is now the cheapest number of opportunities have been linked to Scotland’s form of large-scale electricity generation, which has energy transition, which were outlined in the 2019-20 largely been driven by cost efficiencies and substantial Programme for Government, including capitalising increases in the size of components deployed. on Scotland’s huge offshore wind resource, while The Cromarty Firth is already an experienced hub for supporting economic development and creating jobs. offshore renewables and the Port aims to capitalise The ongoing energy transition will impact on two on this position for the future to attract long-term of the Port’s primary business sectors, oil & gas and sustainable business and employment opportunities. offshore renewables. The oil & gas industry has been We have played an integral role in establishing a supply the foundation for business and employment in the chain cluster of excellence in deepwater offshore wind Cromarty Firth for decades and has an important role energy. The cluster – named DeepWind – features to play in the managed transition to a low carbon a range of partners drawn from industry, academia future. It is facing increasing environmental pressures and the public sector and is aimed at ensuring local to decarbonise activities, which will require substantial businesses can access the major offshore wind investments in new and innovative practices. While developers and benefit from this market. the level of investment required will be particularly With offshore wind components significantly challenging for operators in the mature North Sea increasing in both size and weight, there is a need for basin, time and again the industry has proved to be larger laydown space to ensure the Port continues to extremely resilient and we expect the Cromarty Firth to be one of the most suitable locations for these projects play a vital role in supporting its decarbonisation. and the jobs they create in the region. In response, the Substantial growth is expected in the offshore Port is currently investigating an additional extension renewables industry, particularly in offshore wind and to the Phase 4 development, which would provide floating offshore wind markets. These sectors feature more laydown area to create space for larger and prominently in the Scottish Government’s national heavier offshore wind components – thereby helping energy strategy and secured a Sector Deal through future-proof our facility. As with our other expansion the UK Government, which outlined significant future programmes, this would be subject to public and funding and a commitment to increase local content statutory consultation. and exports. Crown Estate Scotland have also outlined

PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 34 PORT OF CROMARTY FIRTH ANNUAL REVIEW 2019 35 ANNUAL REVIEW 2019 Port Office, Shore Road, Invergordon IV18 0HD T 01349 852 308 E [email protected] www.pocf.co.uk