Scepticism greets harbour board’s £5.3 million income estimate

A change in harbour dues will earn the port of Sullom Voe an extra £2 million per year making an estimated profit of £5.3 million for 2012/13, the SIC harbour board heard yesterday.

But the accuracy of such estimates and the probability of repeating this performance in subsequent years came in for strong criticism at the town hall. Members heard that the port had never previously met lower estimated profits of £4 million per year.

More vessels will fall into the council’s mid-band range for towage services when the council drops the lower tonnage limit to 60,000 tonnes, thus charging more vessels at the mid rate, the board heard. That would be coupled with an average increase in charges of 5.5 per cent and efficiency savings that should add a further £2 million to council coffers, but would not have an adverse affect on the Schiehallion shuttle tanker.

The reshaped charging structure was among a string of extra bills the port is to hit users with: a security administration charge, charged investigation of small oil spills, dues for larger vessels operating in harbour limits in Yell Sound, an increase in the minimum payment on water supplies, a charge for some “renewable devices” and an increase in Scalloway pilotage charges were all agreed.

But councillor Rick Nickerson succeeded in having a charge for the disposal of waste oil at smaller harbours dropped. This would have led to “irresponsible and “illegal dumping at sea, undoing 20 years of work on this issue”.

But eyebrows were raised when head of ports and harbours Roger Moore outlined the projected surplus increase to £5.2 million and said that profits were not intended to fall below £4 million per annum by 2016.

Independent board member Jim Tait dismissed the projections, adding that past forecasts had been inaccurate and that while they made “good headlines” they had been “disappointing to say the least” in reality.

Mr Nickerson was furious that a £4 million figure of expected profit was still being bandied about despite a council undertaking last year to trim this projection back to a more realistic £3 million. He insisted that his objection be recorded in the meeting minutes.

Captain Moore concede that oil shipments were impossible to forecast but the figures were based on the best estimates that the port was able to come up with and had even been scaled back a bit to avoid over-optimism. It was also acknowledged that Schiehallion is likely to go offline next summer for two or three years.

Councillor Alistair Cooper said that it was imperative for the council to get back to formulating plans in the short, medium and long term for the port, given that there was likely to be oil business there till at least 2040. That meant looking 15 years ahead in the future. This won the backing of SVOT manager Arthur Spence, who said that the oil operators would provide their best projections for long-term throughput and expected the council to do likewise for harbour costs, and that the industry’s priority was “controlling costs”.

The board agreed that ports and harbours and infrastructure services would put a long term assessment of the port’s fortunes and requirements to the first meeting of the harbour board following the formation of the new council in May.

The board also decided to bring in insurance requirements for smaller vessels using council harbours that would be worked into the wording of harbour rules. These would not affect very small boats but were intended to absolve the council from liability for recovery of sunken vessels that had happened at Scalloway harbour, in particular.

Peter Johnson