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Penzance Harbour Development - a balanced view.

Discussion in 'Harbours' started by AnotherWeeksy, Jan 20, 2009.

  1. sparky

    sparky Authoritarian Staff Member Administrator

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    Portfolio Holder admits IoS Link scheme is “unsustainable”

    [FONT=&quot]17/3/11

    At yesterday’s meeting of the Cornwall Council Cabinet and in response to a question from the public the Council’s Portfolio Holder for Transport admitted that with the extra borrowing necessary the business case for the Council’s scheme was “unsustainable”.

    By this he meant that the income from the charter fee paid to the Council by the preferred operator of the service would not be large enough to establish a vessel replacement fund, and indeed might not even be sufficient to pay off the Council loan taken out to buy the vessel. Providing for a vessel replacement fund has from the very beginning been a key element of the scheme, and it allowed the Council to boast that they were creating a sustainable Isles of Scilly Link.

    The calculations underlying the creation of such a fund were always shaky but now they are shot to pieces! Most important, it will now take much longer to repay the loan (the Council say 21-25 years instead of 12), and this will mean repayments continuing into a period where the Council have no control over the charter fee (the first contract is for just 12 years). The Council admits that if it is not possible to recover the loan repayments out of the charter fee income, then the shortfall will have to be made good from other Council funds, and that can mean only one or both of two things: increased council tax and cuts to services.
    [/FONT][FONT=&quot]John Maggs
    Friends of Penzance Harbour

    [/FONT] 07966 322379
    www.friendsofpzharbour.org


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  2. treeve

    treeve Major Contributor

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    It is incredible that the link is considered so tenuous in so short a time. No Stamina.
     
  3. Dick Cliffe

    Dick Cliffe Senior Member

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    Response to IOS Scheme is Unsustainable




    It is true that the increased borrowing (from £10 million to £15 million) requires the Route Partnerships to give up its objective of guaranteeing substantial vessel replacement fund and avoiding dependence on a Government grants in the future.

    The current Scillonian was part Government funded (60% from interest free loan). The rest was a commercial mortgage. One of the terms of the loan was establishment of a vessel replacement fund – it did not happen, or if it did the money was spent elsewhere. In 1999 the Company spent £1.7 million on a Scillonian life extension upgrade as buying a replacement vessel was unaffordable. Time has now run out and the Company is faced with replacing both vessels and cannot afford to buy new vessels. The proposed second hand ferry would provide a lesser service being smaller, slower and less sea worthy (not built for open ocean routes). With the Cornwall Council having to borrow £15 million rather than £10 million to help secure Govt funding the current situation could arise again in 25 years time – the need for a Govt grant to subsidize replacement vessel(s).

    The risk of charter payments not covering the loan arises if the operator defaults or if, when re-competed in 12 years time, the charter fee is lower than agreed for the first 12 year term because profitability has declined. Twelve years is a long time in commercial terms. As the helicopter services if likely to fold the ferry could prove more profitable and the IOSSC might have to bid higher to keep the service. With only £10 million of borrowing the loan would be paid off within the current 12 year term avoiding the uncertainty over the charter fee from Year 13 to Year 25.

    The economics of running 2 vessels (rather than one) excludes the chance to build up a substantial vessel replacement fund (mainly due to extra staff and fuel costs). It also excludes a winter ferry service for Islanders. FofPH are supporting Option Pz+ which proposes that the IOSSC buy 2 second hand vessels. No vessel replacement fund is therefore built-in to their solution. The economics of the IOSSC (fall back) solution are severely stretched and one has to question whether the banks would lend the money (£8 to £10 million) and the Company be able repay it without Government help. The RP solution could still grow a vessel replacement fund with £15 million borrowing and a single combined vessel but it would be much smaller and a Government grant much more likely to be necessary when vessel replacement comes up again.

    In my opinion it is perfectly reasonable for Cornwall Council to extend the borrowing to gain the Government funding because it is still more likely than not to recover all of the borrowing from the operator’s charter fee. Yes it is desirable to build in a full vessel replacement fund but the many benefits of the RP scheme should not be sacrificed for it – such a replacement fund has proved unachievable in the last 50 years. The economic benefits from the RP solution both for Islanders and Penzance are large and the loss of these benefits injurious to West Cornwall for decades. The RP proposal is truly of strategic significance to West Cornwall – it will become obvious within just 3 years if we have to reply on what the IOSSC can privately finance.


    Dick Cliffe
    True Friends of Pz & IOS
     
  4. Halfhidden

    Halfhidden Untouchable Staff Member Administrator

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    [FONT=&quot]Transport Minister Norman Baker said:[/FONT]
    [FONT=&quot]"We recognise the importance of a sea connection, both for passengers and freight between Penzance and St Mary's. However, we have made the decision that we cannot support the allocation of over £35m of departmental funds (£62m of public money in total) for a scheme that is very poor value for money, particularly at this time of fiscal stringency. [/FONT]
    [FONT=&quot]"The Department believes the scheme proposed by Cornwall Council goes beyond what is necessary to maintain services and is concerned the cost of both the boat and the harbour works have risen by 50% since 2007. [/FONT]
    [FONT=&quot]"We hope the Local Authority will take this opportunity to work with the operators, the Isles of Scilly Steamship Company and other key stakeholders to develop a simpler, lower cost solution." [/FONT]
     
  5. ratster

    ratster Member

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    at last a semblance of reason & we get to keep our beach. happy camper
     
  6. treeve

    treeve Major Contributor

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    Frankly amazinig as far as the determination of the People of Scilly are concerned to be thwarted by ignorance and wishy washy politics
     
  7. Halfhidden

    Halfhidden Untouchable Staff Member Administrator

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    Friends of Penzance Harbour
    www.friendsofpzharbour.org

    DfT Refuse Funding for Cornwall Council IoS Link Scheme:
    Statement from the Friends of Penzance Harbour

    The Friends of Penzance Harbour was formed spontaneously in response to the publication of the Route Partnership’s plan for Penzance Harbour in September 2009 (subsequently known as Option A). We were of the opinion that the scheme was ridiculously expensive, destructive and inappropriate. For two and a half years we have campaigned, along with many others and with the continued support of the majority of the people of Penzance, to prevent this scheme and replace it with something better.

    The response from the Route Partnership and officers of Cornwall Council has been a disturbing lesson in power-politics. By rubbishing all alternative schemes, by-passing local democratic bodies and public opinion, insulting all those who disagreed with them, trying to frighten the local population with threats to remove the ferry service to Falmouth, re-running planning meetings until they came up with the required decisions, and many other dubious means, they have painted themselves into a corner. They maintained until the end- as they told the Minister - that it was their scheme or nothing.

    However they came up against a body they could neither bully nor bypass. The Department for Transport has characterised their scheme as poor value for money, the level of spending as unjustifiable, and has criticised the actions of the council in forcing this ultimatum. So Option A is dead and Cornwall Council's alternative is - nothing. So convinced were they that their tactics would win the day that no “Plan B” contingency has been prepared. In any democratic institution this was a gross neglect of the public interest for which they must be held accountable.

    Fortunately, despite all official discouragement, other bodies have continued to seek a solution to the future of the ferry link which would be beneficial both to the Isles of Scilly and to the future regeneration of Penzance Harbour - to say nothing of the council-tax payers of Cornwall who were expected to underwrite the Council’s bloated scheme with all its financial risks. It is from these considered and creative scenarios that the future of the link will be ensured.

    The Route Partnership and the main actors from Cornwall Council have been utterly discredited by the Department for Transport's decision and a new untainted consortium of interested parties must be convened without delay to carry these solutions forward. This time they should include all interested parties, representing those who best understand the issues involved. The Friends of Penzance Harbour will continue to encourage and support all efforts to produce a plan which ensures an economically viable and sustainable ferry service to the Isles of Scilly, preserves the integrity of Penzance's seafront and provides for regeneration and revival of Penzance Harbour.

    The DfT decision letter and a News Release version of this statement are attached.

    For more information go to: www.friendsofpzharbour,org



    John Maggs
    Friends of Penzance Harbour
    01736 332741, 07966 322379
    www.friendsofpzharbour.org
     
  8. BayOfPlenty

    BayOfPlenty Member

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    I couldn't agree more!
     
  9. Halfhidden

    Halfhidden Untouchable Staff Member Administrator

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    Exciting times ahead for the Penzance harbour development.
    As you may remember funding for the preferred option from Cornwall Council, (option A) was refused funding by the DfT back in March this year.
    Since then things have been on the move with the announcement from the Penzance Town Council that it agrees to take the lead in finding an alternative to the failed plan for developing the harbour for a better sea link between the Isles of Scilly and Penzance.
    The Council has started to set up a Harbour scheme management board to manage the project. They will submit a funding application to the Dft and carry out public consultations to carry the scheme forward.
    I cannot offer much more details until I’ve have been given the authority to do so. However, you will be interested to learn of the Penzance Seafront Forum. Here you can register your interest in the harbour development.
     
  10. treeve

    treeve Major Contributor

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    Now am a member (thumb)
     
  11. Halfhidden

    Halfhidden Untouchable Staff Member Administrator

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    [FONT=&quot]Here is a copy of the email sent by John Maggs to his members. I've copied it and placed it here as John explains the situation well.
    Penzance Town Council and the Penzance Seafront Forum working together in the newly created Penzance Harbour Scheme Management Board have received funding from the Department for Transport to conduct an Options Review to identify a popular alternative to the Route Partnership’s failed scheme for Penzance Harbour.

    The work will be undertaken by Hyder Consulting who will work closely with the Seafront Forum on the public consultation aspects. Hyders have been briefed by the Management Board and a copy of the Brief is attached. Work on the Options Review started yesterday and a launch Public Meeting will be held at St John’s Hall on 17th November, 7:30pm start. This is an opportunity to learn about the process, ask questions and make sure your views are taken into account right from the start! A leaflet promoting the event is attached; please help by forwarding it to your contacts.

    This new process provides us with an opportunity we were denied by the Route Partnership and it is essential that all who engaged in that previous process engage again now and help the Harbour Scheme Management Board and Hyder Consulting come up with the best scheme for Penzance.

    More information will be available on the Penzance Harbour Scheme Options Review web site ( www.pzharbourfutures.org) when it opens for business on 12th November.[/FONT]
     
  12. treeve

    treeve Major Contributor

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  13. treeve

    treeve Major Contributor

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    "If you have not volunteered but are minded to do so then please consider attending. The meeting will be in two parts: an informal brief on Seafront Forum Activities followed by a brief for volunteers assisting with St Johns Hall Meeting on 17 Nov (including distribution of 8000 flyers for the event). Please email pzseafront@gmail.com if you expect to attend the volunteers’ meeting. Please add “Admiral Benbow Meeting 10 Nov 11” in the subject line."
     

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