Harland & Wolff in move to build and operate Isles of Scilly ferry

The current passenger vessel in operation between Penzance to Scilly, the Scillonian III, has served the route for many years. It was built in H&W's Appledore shipyard
The current passenger vessel in operation between Penzance to Scilly, the Scillonian III, has served the route for many years. It was built in H&W's Appledore shipyard

HARLAND & Wolff is in the running to build and operate two new ferries in the remote Isles of Scilly.

The Belfast-rooted company is reaching the conclusion of a full technical, operational and financial business case on the ferries on the Penzance to Scilly ferry route.

It will join partners, including local councils, to make an application for the government's levelling up funding, and will seek a licence to operate the vessels on an initial five-year period.

But the company warns that "there is no certainty at this point that this opportunity will proceed to financial close".

It is not known yet if any of the workload will be given to Belfast shipyard in the event of the project going ahead.

Harland & Wolff Group Holdings said that with the Government's levelling up funding requiring local content, it has been considering the opportunity to build and operate ferries its own right.

Having spent three years working on and developing its own specific design and costing model for these vessels, H&W is now at an advanced stage of pursuing this opportunity more fully.

In the short term, the company will continue to refine its ferry design.

It will be seeking to operate the vessels on an initial five-year period, with an option to operate for a further five years if government prescribed performance targets are met.

Such arrangements are normal on ferry routes and are designed to provide the best value for taxpayer money.

If a competing proposal utilises commercial debt, rather than levelling up funding, H&W believes that the end-user costs over the lifetime of the proposed vessels may rise and adversely impact the services being offered.

The remoteness of the Isles of Scilly and the reliance that the islanders place on these ferries as essential transport links on a day-to-day basis make it imperative the ferries are technically suitable for the route and ensure seamless operation through the harsher winter months.

The Harland and Wolff proposal seeks to provide these services in the most cost-effective manner, not only to the islanders but also to the summer tourist trade which will provide substantial economic benefit to the islands.

The company is now undertaking a consultation on the islands to ensure it provides ships that are not only innovative and pioneering but also environmentally friendly.

One of the key differentiating features of the company's vessels would be the provision of a set of enhanced on-board facilities and amenities rather than simply being a replacement of the existing vessels.

The current passenger vessel in operation, the Scillonian III, that has served this route for many years was built in H&W's Appledore shipyard and is well known for her technical and operational robustness.

John Wood, group chief executive at Harland & Wolff, says: "We have a large number of colleagues in Appledore and across the group who are vastly experienced in the build and operation of passenger vessels.

"In my view, it is clear that, given the current cost of capital, access to and acceptance of levelling up funding will provide a very cost competitive model to operate either alongside the incumbents or on a stand-alone basis.

"This is a fantastic opportunity and we believe competition on this route is the right thing to ensure value for money for the residents and tourists of the islands."