Marine Asset Management Plan - Funding
Argyll and Bute Council · 11 September 2025
Back to Argyll and Bute Harbour Board — 11 September 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE HARBOUR BOARD ROADS AND INFRASTRUCTURE SERVICES 11 SEPTEMBER 2025 MARINE ASSET MANAGEMENT PLAN – FUNDING 1.0 EXECUTIVE SUMMARY The purpose of this report is to inform Members of discussions and measures being undertaken by officers to determine options for how the Marine Asset Management Plan (MAMP) is to be implemented and funded. Currently funding for Piers & Harbours is mainly provided by Prudential borrowing paid back through fees and charges, however external funding can also be sourced through capital grants, shared cost agreements and funds made available for specific projects. The Marine Asset Management Plan is an adaptable plan fed into by changing priorities and circumstances. It also relies on steady and predictable income from those ferry services utilising Argyll & Bute Council infrastructure to repay loan charges. 1.1 RECOMMENDATIONS The Harbour Board endorse that officers continue to engage with Transport Scotland on future funding options for the Marine Asset Management Plan, which could include potential ownership transfer, grant funding and fixed income model with a future update provided to the Harbour Board.
Page 2
ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE HARBOUR BOARD ROADS AND INFRASTRUCTURE SERVICES 11 SEPTEMBER 2025 MARINE ASSET MANAGEMENT PLAN – FUNDING 2.0 INTRODUCTION 2.1 This report provides Harbour Board Members with an update on the status of discussions and measures to be explored for funding options for the MAMP. 2.2 It was agreed at the December 2022 Harbour Board meeting that any fees and charges; “…increase will be in-step with the motion passed at the Harbour Board meeting in January 2018 that agreed to set charges that meet both the asset sustainability costs and future improvement costs associated with the piers and harbours which the Council has a responsibility for.” 2.3 The MAMP was started with a value in the region of £50m spread over a 10- year interval. It now has a potential value of c.£175m, not including the increase from the Craignure Ferry Terminal project which has the potential to add a further £50m to the total. 2.4 As a result of these increases, officers have been engaging with Transport Scotland and initial discussions have taken place, both in general terms and within the scope of specific projects or for the Harbour Access agreement with CalMac. 3.0 RECOMMENDATIONS 3.1 The Harbour Board endorse that officers continue to engage with Transport Scotland on future funding options for the Marine Asset Management Plan, which could include potential ownership transfer, grant funding and fixed income model with a future update provided to the Harbour Board.
Page 3
4.0 DETAIL 4.1 Today funding for Capital works at our Ports and Harbours continues to be mainly provided by Prudential borrowing paid back through fees and charges, however external funding can also be sourced through capital grants, shared cost agreements and funds made available for specific projects. 4.1.1 The Marine Asset Management Plan is an adaptable plan fed into by changing priorities and circumstances. It also relies on steady and predictable income from those ferry services utilising Argyll & Bute Council Harbours and infrastructure to repay loan charges. 4.1.2 Most of the works are to prepare existing port infrastructure in advance of new vessels being delivered for CalMac ferry services. 4.1.3 Overall, the cost of delivering the programme has risen significantly and the increase is more than could be expected when the plan was initiated. There are reasons for that which will be well known to Members, with world events and other issues taking a toll that must now be recognised in our planning for the future. 4.1.4 The issues facing the MAMP can be summarised as follows: i. Guarantees of income over long periods. To pay off loans and interest that the Council is already committed to and are needed soon to match vessel delivery times. ii. Risk is all with Argyll and Bute Council. Without an agreement like a Harbour Access Agreement (HAA) with the operator and / or Transport Scotland the ability to service loans is at risk of falling income from altered ferry services. An example is the Craignure route having reduced tonnage resulting in a shortfall in anticipated income. iii. Construction time and resources stretched across the network. With so much work ongoing with Councils and CMAL for the CHIFS upgrades, consultants are becoming harder and more expensive to engage, pushing costs even higher. This work also has associated vessel delivery deadlines, so the ability to spread work and costs are limited. iv. Fees and charges becoming high and the need to justify. The operators and Transport Scotland are increasingly looking to justify the fees and charges they incur, and high berthing fees may have an adverse effect on Argyll and Bute Ports and Harbours business.
Page 4
4.3 Future options 4.3.1 Alongside the funding options it is important to note that a Harbour Access Agreement with CalMac / CFL remains a priority so that the Council and CalMac / Transport Scotland can plan finances over an agreed period. 4.3.2 Such an agreement would ideally see a single payment per year for berthing and conservancy fees based on a planned timetable and vessels visiting our ports, thus protecting the Council’s interests and income should there be changes to the service, like smaller vessels to replace breakdowns, COVID timetable cuts etc. 4.3.3 It is now a part of the new Port Marine Safety Code (PMSC) to have these types of formal agreements in place so more rapid progress on this should be evident in the coming weeks. 4.4 Transport Scotland have also floated the idea of a transfer of ownership of CHIFS Network Ports and mentioned doing this with a package, this is not necessarily something that either party favour but may be worth exploring. 4.5 If authorised, it is officer’s intention to progress discussions with Transport Scotland to determine what feasible choices, costs and savings are associated with each option. 4.5.1 The discussions will necessarily need to be wide ranged and cover a range of options. Some examples of topic matter are noted in the following paragraphs. 4.6 The status quo would see the Council continue with funding projects using the current Prudential borrowing model. Alongside any reserves, this model has an ability to smooth out project costs overtime. Expensive projects can use up reserves very quickly and if they are depleted, the result will be that the more expensive projects require steeper increases. 4.6.1 A continued ‘partnership’ working alongside CMAL with some shared contractor framework options, has worked well on shared projects like Port Askaig and could form a basis for future CHIFS network upgrades. 4.7 The strategic nature of the infrastructure and how it fits with CHIFS network upgrades should be recognised and financial assistance could be provided, if possible, from Transport Scotland to support their network upgrades. 4.7.1 Part grants of up to 60% from Transport Scotland may be available for some projects, so we would like to understand what projects can receive these grants, what that process is and any restraints or conditions that would be imposed.
Page 5
4.7.2 Grant funding discussions may include the Small Vessel Replacement Programme (SVRP), which involves Fionnphort in phase 1and Gigha overnight berths, as well as the new Craignure Ferry Terminal. 4.7.3 It is reasonable to expect and explore what positive effect any grant funding would have on fees and charges for CalMac vessels and how much influence would provision of grant funds give Transport Scotland over design detail and costs. Argyll and Bute Council is answerable on a more local level to users and residents, and the Council must remain wary of that aspect. 5.0 CONCLUSION 5.1 This report provides Harbour Board Members with an update on the status of discussions and measures to be explored for funding options for the MAMP. 6.0 IMPLICATIONS 6.1 Policy None directly arising from this report. 6.2 Financial Increases to fees and charges are required to ensure future income is sufficient to maintain and develop Argyll & Bute Council’s marine assets for future years. Alternative funding routes will also be explored to support future projects. 6.3 Legal Considered to be none directly arising from this report. 6.4 HR None. 6.5 Customer Service An overall improvement in travel experience and reliability should result with improved and maintained infrastructure. 6.6 Risk Completed works will reduce the repair and maintenance on existing infrastructure Above inflation increases may have a detrimental economic impact on businesses using the facilities for example: • Fishermen.
Page 6
• bulk importers. • timber exporters. • wind farm developers. • Cruise companies. Significant increases may also reduce usage and customers while making attracting new business more difficult. External influences may come to bear on ferry usage patterns which may, in turn, impact on income from ferry fees and charges i.e. Vessel breakdowns and redeployments, Environmental issues (car use), Brexit and potential changes in RET. This will pose a potential risk to income. 6.7 Climate Change There are no direct impacts regarding climate change from this report, due regard will be given to climate change with a view to minimising any climate change impact and these will be considered as and when they arise. 6.8 Fairer Scotland Duty None directly arising from this report. 6.9 Equalities - protected characteristics None directly arising from this report. 6.10 Consumer Duty None directly arising from this report. 6.11 Island Communities Completed works and projects will enhance service reliability and community connectivity. 6.12 Children’s Rights and Wellbeing None directly arising from this report. Kirsty Flanagan Executive Director with responsibility for Roads and Infrastructure Services Harbour Board Chair: Councillor Ross Moreland Policy Lead for Transport: Councillor John Armour August 2025 For further information contact: Scott Reid, Marine Operations Manager