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Corran Ferry Project (Outline Business Case) Update

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Corran Ferry Project (Outline Business Case) Update Agenda Item 13 Report No ECI/34/20 HIGHLAND COUNCIL Committee: Economy and Infrastructure Date: 4 Nov 2020 Report Title: Corran Ferry Project (Outline Business Case) update Report By: Executive Chief Officer Infrastructure and Environment 1. Purpose/Executive Summary 1.1 This report provides Members with an update on the progress of the Corran Ferry Project (Outline Business Case). The project has been established to review the options for securing replacement ferry vessels and for considering the preferred way forward for the future operation and management of the Corran Service. 2. Recommendations 2.1 Members are invited to: i. note that a letter was sent to the Cabinet Minister seeking approval to form a working group with officers from Transport Scotland, regarding the possibility of transferring over responsibility for the Corran ferry service in accordance with the principles set out in the Scottish Ferries Plan. The letter can be found in Appendix 1; ii. note that the Scottish government have advised that they will require confirmation regarding the Council’s plans to fund the capital replacement of the vessels and slipways prior to the setting up of a formal working group to discuss any potential future transfer of responsibility. The responding letter from the Cabinet Minister can be found in Appendix 2; iii. note that the Corran Ferry Project will be included as part of the Council’s Capital Programme Review; iv. agree to support the proposal for the new preferred Vessel and Infrastructure option - 2 x 25 car smaller hybrid vessels straight through (Ro-Ro) operation as detailed in Appendix 3; v. note the Vessel and Infrastructure general arrangements and analysis (including high-level capital costs) – Option A / Option B as detailed in Appendix 4; vi. note the requirement for the project managers secondment to be extended by 2 years (up to May 2023) to facilitate the ongoing discussions / negotiations with Transport Scotland / CMAL and other key stakeholders, and to ensure that links between the Local Community and Officers are maintained. Methods of delivery will be established, the necessary investment in the ferry service will be planned and a start date determined. The secondment will continue to be funded through the Corran Ferry trading account; vii. note that the project will be seeking funding to procure an external source to undertake a detailed report on the critical importance of the ferry to meeting the varied socio-economic needs of the fragile communities served by the Corran Ferry; viii. note A draft terms of reference for the Corran narrows fixed link working group are with relevant ward members for their consideration; and ix. note the information in previous reports – • Corran Narrows Update (Item 7 in background papers); and • Corran Ferry Options Appraisal (Item 20 in background papers). 3. Implications 3.1 Resource - There are potential significant resource implications for the Council depending on the final preferred option, however these will form part of future reports for presentation to the appropriate Council Committee. 3.2 Legal - Relevant legal aspects will be explored appropriately. 3.3 Community (Equality, Poverty and Rural) - The Corran Ferry is a lifeline service with the associated socio-economic implications for the local Community. 3.4 Climate Change / Carbon Clever - Clean energy options will be considered in examining future operations. 3.5 Risk - Increased service sustainability and resilience will reduce the risk to future service provision. 3.6 Gaelic - No implications. 4. The Requirement for 2 smaller vessels 4.1 As part of the ongoing outline business case, the project has reviewed again the Vessel / Infrastructure options (as below) to fully understand what will generate the largest benefits whilst considering each of the options in terms of their affordability. 5. Vessel and Infrastructure Options A / B 5.1 Option A: (Ref 2d - Final STAG Report) Option B: (Ref 2f - Final STAG Report) Previous Preferred Option New Preferred Option • 1 new larger (50 car) hybrid vessel • 2 new smaller (25 car) hybrid vessels straight through (Ro-Ro) straight through (Ro-Ro) • 1 overnight berthing structure (for one • 1 overnight berthing structure (for two vessel) vessels) • 2 new aligning structures / slipways • 2 aligning structures / slipways • Refit / relief / second vessel secured from elsewhere. (CMAL fleet) 5.2 This option would introduce a new constraint With guaranteed vessel availability all year on the route as there would be no round this option will provide the required “immediate” back up vessel resulting in reliability, resilience and sustainability for a ongoing short-term service outages (No lifeline socio-economic dependant service Service) at the Narrows over a 30-year over a 30-year period and should therefore period. (it is highly unlikely that a backup be the preferred option. vessel would be fully operational at the Narrows within 3 days) Two smaller Ro-Ro vessels will enable From a political, economic, social and a faster loading and will result in the service service requirement point of view, periods of running to the published timetable (instead service outage over a 30-year period would of shuttling). be unacceptable and should therefore no longer be in scope for further consideration. The efficiency of new vessels (short/medium term), an anticipated increase in revenue due to the larger capacity of the new vessels and increasing passenger numbers along with a new fares structure will help off-set the costs. 5.3 As agreed, (E&I 01 July 20) The new hybrid vessels will be considered for their contribution to reduced carbon emissions by the Council’s Climate Change Panel. 5.4 The next step in the outline business case will be to undertake cost modelling on the operational costs and income opportunities. 5.5 Highland Council does not have a committed capital programme for replacement vessels / slipways and will look to explore sources of funding for the required capital spending. (45m) 5.6 The findings of the 2-vessel option will be taken back to the Council’s Economy and Infrastructure Committee seeking approval early next year. 5.7 The Requirement for 2 smaller vessels is detailed in Appendix 3 6. Corran Ferry Project - Engagement and Consultation 6.1 Essential consultation is ongoing with Council Members and Community Groups. Key contacts have been established and several discussions have taken place over the past 2 years between Highland Council and Transport Scotland along with Caledonian Maritime Assets Limited (CMAL) and are set to continue. The Project Manager and Roads Operations Manager have also attended several Argyll, Lochaber, Skye and Small Isles Ferry Stakeholder Group meetings. Internal Stakeholder engagement with the Councils Finance, Legal, Procurement and Corporate Communications teams is also ongoing. 7. Corran Ferry Project - Governance 7.1 A steering group has been established in Fort William to ensure links between the Local Community and Officers are maintained. Everyone has been given the opportunity to engage in the project. Members act as a sounding board and provide support and guidance to the Project Team on any issues critical to project success and the development of the Outline Business Case (OBC). 7.2 Representatives from the following Community Councils - Acharacle, Ardgour, Nether Lochaber, Sunart, West Ardnamurchan and Morvern are invited to attend all Project Steering Group meetings. 7.3 The Head of Roads and Transport Services is Project sponsor and the Project Manager is working closely with the area Roads Operations Manager and the two Ferry Foreman. The Steering Group is part of a larger project governance structure. The Project Manager has reported to Lochaber Committee and Harbours Management Board. The decision-making powers are deferred to the Environment, and Infrastructure Committee. Designation: Executive Chief Officer Infrastructure and Environment (Community Services) Date: 4 Nov 2020 Author: Tracy Urry, Head of Roads and Transport Background papers: Report Item 7 - ECI/9/20 Corran Narrows Update 2020/07/01 Report Hitrans Board Corran Narrows Fixed Link: Outline 2020/04/24 item 9 Feasibility Study Report Item 10 - LA/6/20 Corran Narrows Options Development 2020/02/19 Study - Interim Update Report Item 7 - LA/31/19 Corran Ferry Service Update 2019/11/06 Report Item 7 - LA/17/19 Corran Ferry Service Update 2019/08/29 Report Item 4 - LA/7/19 Corran Ferry Service Update 2019/04/10 Report Item 20 - EDI/80/18 Corran Ferry Service Options Appraisal 2018/11/08 Report Item 11 - LA/19/18 Corran Ferry Service Options Appraisal 2018/08/30 Report Item 8 - LA/23/17 Corran Ferry Update 2017/10/04 Report Item 4 - LA/14/17 Corran Ferry Update 2017/08/22 Report Item 12 - COM/47/16 Corran Ferry Update 2016/11/03 Report Item 11 - COM/8/16 Corran Ferry Update 2016/02/04 Report Item 14 - COM/11/15 Corran Ferry Update 2015/02/05 Report Item 9 - COM/35/14 Corran Ferry - Socio Economic Study 2014/11/06 Report Item 8 - LA/5/14 Corran Ferry - Socio Economic Study 2014/02/27 Report Item 12 - TEC/72/13 Corran Ferry - Review of Ferry Fares 2013/09/19 Appendix 1 Michael Matheson Cabinet Secretary for Transport, Infrastructure and Connectivity Scottish Government (sent via email: [email protected]) 8th September 2020 MD/rm Dear Michael, 1. Purpose Summary 1.1 Highland Council are seeking your approval to form a working group with officers from Transport Scotland regarding the possibility of transferring over responsibility for the Corran ferry service in accordance with the principles set out in the Scottish Ferries Plan. 1.2 A critical decision will need to be made as a delay in making a strategic decision to invest and retain the service in house or transfer responsibilities to Transport Scotland could result in Service failure. 1.3 A timely response would be appreciated by mid-October, so we can report back to our members at our next decision-making committee that a transfer of responsibilities is a viable option to pursue.
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