Public reports pack
Argyll and Bute Council · 31 January 2024
Back to Argyll and Bute Harbour Board — 31 January 2024 and its agenda
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Argyll and Bute Council Comhairle Earra-Ghàidheal Agus Bhòid Executive Director: Douglas Hendry Kilmory, Lochgilphead, PA31 8RT Tel: 01546 602127 Fax: 01546 604435 DX 599700 LOCHGILPHEAD 24 January 2024 NOTICE OF MEETING A meeting of the ARGYLL AND BUTE HARBOUR BOARD will be held BY MICROSOFT TEAMS on WEDNESDAY, 31 JANUARY 2024 at 3:00 PM, which you are requested to attend. Douglas Hendry Executive Director BUSINESS 1. APOLOGIES FOR ABSENCE 2. DECLARATIONS OF INTEREST (IF ANY) 3. OBAN HARBOUR REVISION ORDER UPDATE (Pages 3 - 6) Report by Executive Director with responsibility for Roads and Infrastructure Services * 4. PIERS AND HARBOURS - OBAN HARBOUR - COSTS AND CONSERVANCY (Pages 7 - 14) Report by Executive Director with responsibility for Roads and Infrastructure Services * 5. PIERS AND HARBOURS - MARINE ASSET MANAGEMENT PLAN FEES AND CHARGES 2024/2025 (Pages 15 - 22) Report by Executive Director with responsibility for Roads and Infrastructure Services Items marked with an “asterisk” are items, on the basis of information available at the time this Agenda is published, on which the Committee may not have delegated powers to act, and which may therefore require to be referred to the Council or another Committee, and that referral may depend on the decision reached at the meeting. Argyll and Bute Harbour Board Councillor Fiona Howard Councillor John Armour Councillor Garret Corner Councillor Amanda Hampsey Councillor Andrew Kain (Chair) Councillor Jim Lynch Councillor Ross Moreland (Vice-Chair) Councillor Andrew Vennard Contact: Hazel MacInnes Tel: 01546 604269 Public Document Pack
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ARGYLL AND BUTE COUNCIL HARBOUR BOARD ROADS AND INFRASTRUCTURE SERVICES 31 JANUARY 2024 OBAN HARBOUR REVISION ORDER UPDATE 1.0 INTRODUCTION 1.1 This report is provided to update Members on the status of plans to establish the Municipal Oban Harbour and the progress of the Oban Harbour Revision Order (HRO). 1.2 It also details the process for the formal consultation process to make the Order. 2.0 RECOMMENDATIONS It is recommended that the Harbour Board: 2.1 Note and consider the update provided in this report. 3.0 DETAIL Harbour Revision Order (HRO) 3.1.1 The Council’s Harbour Board met on 31st August 2023 and approved a draft of the HRO for the formal application, assuming there were no material changes requested by Transport Scotland in the meantime. The report clearly set out the key steps, including the 6 week consultation period consequential to that decision. 3.1.2 Table 1 below shows the steps in the formal process. Table 1 Step Description Actioned by 1 Formal application requested by Transport Scotland and submitted by Argyll & Bute Council. Accompanied by fee & supporting documentation. Transport Scotland & Council Officers. 2 Public Notice – 42 days (6 weeks) of public consultation. May result in representations being received from members of the public, community groups or statutory consultees. Objection handling by Transport Scotland by written representation, hearing or inquiry. Negotiation / modifications by Argyll & Bute Council. Page 3 Agenda Item 3
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3 Consultation with statutory consultees is also open for 42 days but may not exactly match the same commencement day as the public consultation period. (see 3.2.6) Managed by Transport Scotland, then passed to Argyll & Bute Council. 4 Scottish Ministers consideration of application and decision. Scottish Government. 5 Decision letter issued & decision published. Transport Scotland. 6 Order Made. Argyll & Bute Council assume control of new harbour area. Scottish Government. 3.1.3 Following the successful conclusion of informal discussions and confirmation that no material changes were made to the draft HRO, the formal application has now been submitted to Transport Scotland along with the associated documentation and fee. 3.2 The Consultation Phase 3.2.1 The arrangements for the consultation are governed by the Harbours Act 1964, and this does not provide leeway or discretion on the part of the Council for the 42 day period (6 weeks) to be extended or altered. The 6 week period of public consultation began with the publication of an advertisement in a local newspaper and ran from 30th November 2023 until the 10th January 2024. 3.2.2 The Council, in looking at the timing of the 6 week consultation period has been sensitive to balancing the need to progress the Harbour Order with the need to make sure that the 6 week consultation period did not begin or end during either of the Christmas or New Year holidays. 3.2.3 Scottish Ministers directed that the draft was also served on specified bodies or persons and this has been done to coincide as closely as possible with the public consultation period. The Statutory Consultees are: • Scottish Environment Protection Agency • NatureScot • Northern Lighthouse Board • The Royal Yachting Association Scotland • Planning and Building Standards – Argyll and Bute Council • UK Chamber of Shipping • Maritime and Coastguard Agency 3.2.4 We have also published the submission on the Council’s website for public viewing and promoted that via social media, our ‘Keep in the Loop’ service and by any other appropriate means identified in liaison with the Council’s Communications Team. This is an established consultative process from the informal consultation already carried out for the Oban HRO. 3.2.5 The process requires 42 days for representations to be made and during this Page 4
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period Transport Scotland will conduct their own consultations with the statutory consultees served with the draft HRO. Each consultee will have 42 days to respond so this may not run concurrently with our public consultation period. 3.2.6 All objectors must state the grounds of the objection. Their representations have been forwarded on to us from Transport Scotland and in addition, as we have had consultations on this subject before, representations sent directly to us have been shared with Transport Scotland. 3.2.7 There is no fixed timescale for handling any representations received. Now the 42 day period has ended Transport Scotland and Argyll and Bute Council are liaising to agree a timeframe to review the remaining representations. The timeframe may be extended if required and objections can be withdrawn at any time by writing to Ministers but at the end of the timeframe Transport Scotland will contact all outstanding objectors to confirm the status of the objection. 3.2.8 Ministers will make the decision on the appropriate route to deal with any objections which are not withdrawn which can include further written representation or in extreme or complex cases a hearing or public inquiry on similar lines to planning inquiries. 3.2.9 The Minister will then consider the material provided and reach a decision, which may involve modifications to the Order to meet objections or provide mitigation measures. 3.2.10 Ministers will then consider the draft and issue a formal decision letter to the Council, copied to consultees and objectors and published on the Transport Scotland website. 3.2.11 In the event the decision is positive the Order will be made and we must publish notice of this in the Edinburgh Gazette and a local paper (again most likely the Oban Times) and serve copies on the same people identified and notified of the original application. 4.0 CONCLUSION 4.1 This report provides an update to Members on the status of plans to establish the Municipal Oban Harbour and the progress of the Oban Harbour Revision Order (HRO). 5.0 IMPLICATIONS 5.1 Policy – The Harbour Board agreed in December 2021 that the Council should proceed to make the arrangements to formally manage the unmanaged section of Oban Bay. 5.2 Financial – No financial implications at this stage, all costs have been met Page 5
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through existing budgets and the Municipal Harbour will have fees and charges through conservancy charges etc. which will cover the operating costs. 5.3 Legal – the HRO process is a formal legal process set out in the 1964 Harbours Act. 5.4 HR – HR implications will be identified as the proposal progresses. 5.5 Fairer Scotland Duty: 5.5.1 Equalities – None known. 5.5.2 Socio-economic Duty – None known. 5.5.3 Islands – consultation will be carried out with the island communities as a continuation and expansion of the Options Appraisal Process reported to the December harbour Board. 5.6 Climate Change – 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. 5.7 Risk - The Council progressing to become a Municipal Port Authority for the unmanaged areas of Oban Bay increases the safety within Oban Bay. There is a risk that there could be a number of objections and representations during the process which could impact on timescale and these will be considered as and when they arise. 5.8 Customer Service – Improved and safer environment for all users. Kirsty Flanagan, Executive Director with responsibility for Roads and Infrastructure Policy Lead for Roads and Transport, Councillor Andrew Kain January 2024 For further information contact: Jim Smith, Head of Roads and Infrastructure, or Scott Reid, Marine Operations Manager Page 6
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ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE HARBOUR BOARD ROADS AND INFRASTRUCTURE SERVICES 31 JANUARY 2024 PIERS & HARBOURS - OBAN HARBOUR – COSTS AND CONSERVANCY 1.0 INTRODUCTION 1.1 There are three separate Harbour Orders in place for Oban: the North Pier, Railway Pier and South Pier. The approaches and waters through the bay are not covered by an Order. The responsibility for these waters defaults to the Maritime and Coastguard Agency (MCA). Having one or more Statutory Harbour Authority controlling the entirety of the bay would remove any ambiguity and would likely result in benefits to users of the bay. 1.2 For a number of years the Council with CMAL, CalMac, the Northern Lighthouse Board and various stakeholders have worked to progress a solution which would result in all of the bay, including the approaches, being covered by provisions which would enable the bay to be fully managed. In particular, the Oban Bay Management Group (OBMG) has been providing a joint approach to improving navigational safety at Oban since 2007. The group consists of Caledonian Maritime Assets Ltd (CMAL), Argyll and Bute Council (ABC), Northern Lighthouse Board (NLB), CalMac Ferries Ltd (CFL), Oban Bay Stakeholder Group (OBSG), Oban Community Harbour Development Association (OCHDA) and Oban Community Council (OCC). The Council’s plans for a Municipal Harbour have the support of the OBMG. 1.3 This report follows on from the decision of the Council’s Harbour Board at its meeting on 31 August where the Harbour Board agreed the final draft HRO for submission to Transport Scotland to commence the statutory consultation process. That report clearly set out the key steps, including the 6 week consultation period consequential to that decision. It was for Council officers to then progress with these steps, including the commencement and timing of the consultation period to ensure that the HRO was in a position to be operational as soon as practicably possible. 1.4 This report also allows Members to consider the costs and associated reasonable charges (Conservancy Charge) for the running and maintenance of an expanded Oban Harbour, as defined in the Harbour Revision Order (HRO) currently under process with Transport Scotland. Page 7 Agenda Item 4
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2.0 RECOMMENDATIONS 2.1 Members are asked to recommend to Council in the event the HRO is made: 2.1.1 When setting the fees and charges for 2024 / 2025 that it approves, for vessels with a Gross Registered Tonnage (GRT) over 50 registered tonnage, a baseline Conservancy Charge of 7p / GRT to generate sufficient income to run, maintain and develop Oban Harbour and the Council’s marine infrastructure; 2.1.2 Agree that CalMac ferries have a reduced rate of 2p / GRT due to the reasons detailed in the report; 2.1.3 Note that this represents a figure for the first year only and that it should be assessed for effectiveness each year and adjusted accordingly; 2.1.4 Agree that the adjusted conservancy charge is to be assessed, reported and approved annually in line with the Marine Fees and Charges and is to be included in that report for the Harbour Board for recommendation to Council; and 2.1.5 Agree that the vessel types listed in the report at 4.3 should be exempt from transit or ‘Conservancy’ charges. 3.0 BACKGROUND 3.1 In August 2023 the Harbour Board agreed a final draft of the HRO for submission to Transport Scotland which expands the current SHA area around Oban North Pier to include a larger portion of Oban Bay and the Kerrera Sound. 3.2 Figure 1: Chart of new harbour limits included with the HRO. The harbour limits shown shaded blue below: Page 8
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3.3 On 10th November 2023 following a period of informal review with Transport Scotland, the formal application for the HRO was made by the Council. The statutory consultation period of 42 days commenced on 30th November 2023 with the publication of an advert in the Oban Times newspaper and expired on 11th January 2024. 3.4 If made, the draft Order will become law and Oban Harbour will come into existence by extending the Council’s current jurisdiction out to the limits shown in Figure 1. This will come with added responsibility for maintaining the harbour for shipping and the powers to raise funds to do so. These charges are usually referred to as ‘Conservancy’ charges but can be equally combined in the day to day ‘harbour dues’ or berthing fees. 3.5 In determining the level at which charges are set, a number of assumptions have to be made which will be monitored over the year, so that the Harbour Authority can be confident when recommending the fees and charges each year that they are effective and reasonable. Some of those assumptions and notes are listed here: a. CalMac Ferries timetables – an assumption has been made around the number of sailings for the year. At present service disruption and weather have some impact on the expected income. b. CalMac vessel allocation – an assumption has been made around tonnage and vessels deployed on the routes although these may change. A figure of 15M GRT has been used from generally accepted historical data for GRT with available recent updates e.g. Loch Frisa deployment has a significant reduction on GRT on the Craignure route. c. Large vessel movements – an assumption has been made around the level and size of non-ferry traffic. d. Small vessels less than 50 GRT and ‘pleasure craft’ will be exempted from conservancy charges. e. Economy of scale savings and recharging within Council departments for services may not be reflective of the costs which another Harbour Authority would incur for the same services e.g. training, resilience and insurance. f. Recognition that as public bodies utilising public funds CFL already pay CMAL harbour dues for the CMAL Harbour Authority area as detailed in their own schedule of charges. Every effort will be made to simplify the charging process between Argyll and Bute Council and CFL as the current ferry operators. 3.6 Discussions between Argyll and Bute Council and CFL are ongoing regarding an agreement for the payments and charges made each year. It is anticipated that a simplified charging structure, beneficial to both bodies can be agreed during 2024 / 2025. Page 9
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4.0 DETAIL The Oban Harbour Statutory Harbour Authority (SHA) will have an obligation to ensure open and safe use of the Harbour and to make reasonable charges for the running and maintenance of the Harbour. 4.1 The authority to charge “ship, passenger and goods dues” as considered “fit” is vested in Argyll and Bute Council by the Harbours Act 1964 section 26(2) and applicable at all locations where Argyll and Bute Council is the statutory harbour authority and exercise its statutory harbour powers in accordance with its governing legislation. The monies raised from levying harbour dues are primarily used to maintain the harbours and to provide for their long-term viability and encompasses, 'ship, passenger and goods dues', namely those charges associated with: a. Ships entering, using or leaving the harbour; b. Passengers embarking or disembarking at the harbour; c. Goods brought into, taken out of, or carried through the harbour by ship; 4.2 Definitions given below are not exhaustive but are significant in the context of this report and Oban Harbour. A more detailed schedule of charges will be required to cover the full range of Ports and services carried out by Argyll and Bute Council as Harbour Authority at other locations and the legal distinctions between the different types of vessel or craft. 4.2.1 ‘Pleasure vessels’ are vessels used for sport or recreational purposes and do not operate for financial gain. A more extensive legal definition is provided by the Merchant Shipping (Vessels in Commercial Use for Sport or Pleasure) 1998 (SI 1998/2771) as amended. If more than 12 passengers are carried, irrespective of whether payment is made, the vessel is a “passenger ship” under UK Merchant Shipping regulations and needs to be appropriately surveyed and certificated. 4.2.2 ‘Fishing Vessel’ means a vessel for the time being used (or, in the context of an application for registration, intended to be used) for, or in connection with fishing for sea fish other than a vessel used (or intended to be used) for fishing otherwise than for profit; and for the purposes of this definition “sea fish” includes shellfish, salmon and migratory trout (as defined by section 44 of the Fisheries Act 1981). A vessel for the time being used (or intended to be used) wholly for the purpose of conveying persons wishing to fish for pleasure is not a fishing vessel. 4.2.3 ‘Ferry’ means a sea going passenger vessel designed or adapted to carry more than 12 passengers and may also have the ability to convey vehicles and goods, especially over a relatively short distance and on a regular service. Which refers to a series of ro-ro ferry or passenger craft crossings, operated so as to serve traffic between the same two or more ports, or a series of voyages from and to the same port without intermediate calls, either: Page 10
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a. According to a published timetable; or b. With crossings so regular or frequent that they constitute a recognisable systematic series. 4.2.4 Charges will be referred to the Gross Registered Tonnage (GRT) of a vessel and normally per day, although future rates may incorporate other durations of stay if required for flexibility and convenience e.g. 4 day cruise call or short stay call 4.3 Exemptions 4.3.1 The following categories of craft shall be exempt from payment of ‘conservancy’ charges but may still be liable for berthing or combined charges at berths within Oban Harbour Authority area, being vessels not covered by the other defined categories and which are not exempt (in law) from paying pier and harbour charges: a. No charges will apply to vessels which are involved in an ongoing emergency. b. Commercial and pleasure vessels under 50 GRT. c. Fishing vessels. d. Tenders used to access another vessel in the vicinity of harbour or facility. e. Canoes / kayaks. f. Personal watercraft (Jet Ski etc.). g. Sail / paddle boards. 4.4 Present Costs Estimates 4.4.1 The table 1 below lists a summary of running costs for Oban Harbour Table 1 - Summary of costs 4.5 Vessel Traffic 4.5.1 In 2022 the Harbour area saw c.15,500 transits of the North entrance to the Harbour area by vessels with Automatic Identification System (AIS) fitted. 54% of these were attributed to passenger vessels, of which the vast majority are CalMac ferry transits to and from the CMAL Harbour Authority area. Category Description (examples) Annual Cost Equipment Service Agreements Workboat engine / service contracts £5,000 Building & Admin PMSC / ISPS / CCTV £6,000 Survey & Dredging Bathymetry 3 & 10 years / Dredging 6 to 10 years £13,000 Maintenance & Repair Infrastructure / Dive inspections / fender repairs £50,000 Staff Staff employment on current shift pattern £225,000 Training IOSH / PFSO / Powerboat £5,000 Total annual estimate £300,000 Page 11
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4.5.2 Most of the traffic entering, transiting or departing the Harbour area will have had some interface with a facility in the harbour, either the North Pier, Northern Lighthouse Board quay, CMAL Harbour Authority area or one of the anchorages. When this is the case berthing dues etc. will be charged by the facility owner and in the case of the North Pier as this is owned by the Harbour Authority these charges can be adapted to include a combined fee inclusive of conservancy. 4.5.3 In determining a base rate for the ‘transit only’ or ‘conservancy’ charge it is recognised that it should not overburden customers and businesses using Oban Harbour who pay ‘berthing dues’ elsewhere already. 4.6 Conservancy income 4.6.1 The table 2, below shows a summary of estimated income for a base rate of 7p per GRT for liable vessels and a reduced rate of 2p per GRT for CFL services. 4.6.2 The total estimated income incorporates an initial c.15% to cover some of the start-up costs and the commencement of a business case for the North Pier extension, which will look at the future development of Oban Harbour. 4.6.3 The estimates below should be refined over the first year, reassessed and reported with recommendations on changes for year 2 onwards. Changes will take account of: a. Any ‘fixed sum’ simplified agreement with CFL, taking into account new tonnage and scheduled timetables. b. Reduction of the determined ‘start-up’ costs over an agreed period. c. Actual vessel traffic movements and GRT over the year. Table 2 - Summary of estimated income for Year 1 Facility Description Value North Pier c.200,000 GRT / year @ 7p £14,000 Cruise anchored c.265,000 GRT / year @ 7p £18,550 Other liable commercial transits c.200,000 GRT year @ 7p £14,000 CalMac c.15,000,000 GRT / year @ 2p £300,000 Total £346,550 5.0 CONCLUSION 5.1 This report follows on from the decision of the Council’s Harbour Board at its meeting on 31 August where the Harbour Board agreed the final draft HRO for submission to Transport Scotland to commence the statutory consultation process. This report also allows Members to consider the costs and associated reasonable charges (Conservancy Charge) for the running and maintenance of an expanded Oban Harbour, as defined in the Harbour Revision Order (HRO) Page 12
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currently under process with Transport Scotland. The Conservancy Charges will form part of the fees and charges report which will be considered by Council as part of the 2024/25 budget process. 6.0 IMPLICATIONS 6.1 Policy - None directly arising from this report however this position to be revisited in the event that the HRO is adopted. 6.2 Financial - The proposed increase of fees and charges will ensure that future income is sufficient to maintain and develop marine assets. Costs incurred to date have been met through existing budgets. 6.3 Legal - Considered to be none directly arising from this report. 6.4 HR - Additional staff required to operate the extended SHA have been recruited and are currently deployed assisting the Harbour Master in preparing for the introduction of the SHA together with training and general marine duties. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics An EqSEIA is being developed for the Oban SHA. 6.5.2 Socio-economic Duty - None directly arising from this report. 6.5.3 Islands - Development of the harbour will enhance safety, service reliability and community connectivity between the mainland and islands and provide additional resilience and support for vessels utilising Oban Bay. 6.6 Climate Change - there are no direct impacts in regard to 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. 6.7 Risk - Applied charges will help ensure the repair and maintenance on existing infrastructure. Above charges may have a detrimental economic impact on businesses using the facilities for example: • 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 Page 13
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and redeployments, Environmental issues (car use) and potential changes in RET. 6.8 Customer Service - Customers and key stakeholders will be informed of fees and charges when set. An overall improvement in travel experience and reliability should result with improved and maintained infrastructure. Executive Director with responsibility for Roads and Infrastructure, Kirsty Flanagan Policy Lead for Roads and Transport, Councillor Andrew Kain January 2024 For further information contact: Scott Reid, Marine Operations Manager Jim Smith, Head of Roads and Infrastructure Services Page 14
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ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE HARBOUR BOARD ROADS AND INFRASTRUCTURE SERVICES 31 JANUARY 2024 PIERS & HARBOURS - MARINE ASSET MANAGEMENT PLAN FEES & CHARGES 2024 / 2025 1.0 INTRODUCTION 1.1 This report allows Members to consider the necessary increase in fees and charges for the forthcoming financial year 2024 / 2025, in order to meet the requirements for the Argyll and Bute Council Asset Management Plan referenced in the August 2023 Harbour Board report. 2.0 RECOMMENDATIONS 2.1 Members are asked to: 2.1.1 Recommend to the Council, when setting the fees and charges for 2024 / 2025 that it approves an increase to piers and harbours fees and charges of 3% to generate sufficient income to develop the Council’s marine infrastructure. 2.1.2 Note that this presents a stepped “proposed increase to allow smoothing” over a 10 year period for meeting both the sustainability costs and future improvement costs associated with the marine infrastructure which Argyll and Bute Council has responsibility for. 2.1.3 Agree that the asset management plan will continue to be updated on a rolling 10 year basis. 3.0 BACKGROUND 3.1 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 Page 15 Agenda Item 5
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sustainability costs and future improvement costs associated with the piers and harbours which the Council has a responsibility for.” 4.0 DETAIL In order to fund the various works identified in the Marine Asset Management Plan it is necessary to increase fees and charges on a year-on-year basis. Annual increases in future years are expected to be in the order of between 3% and 5%, depending upon confirmed works identified for that particular year (plus any discretionary inflationary increase). 4.1 Current Works Marine Services are presently engaged in a number of long and shorter term projects and works across Argyll and Bute which include: 4.1.1 Iona breakwater – protection of ferry berthing slip The breakwater planning application has been uploaded and is on schedule to tender this year. Contractor award should be in the summer of 2024 and completion by summer 2025 which will now include the adjacent slipway repairs as well as the replacement toilet block. The present forecast of 1 year construction may be subject to the contractor work scope and supply chains, particularly rock armour. 4.1.2 Fionnphort overnight berthing facility Preparation is progressing with Fionnphort to ensure: • Overnight berth • Safe access for crew • Sheltered berthing • Charging and supply facilities • Traffic survey to enhance the passenger road user interface at the terminal area. An Environmental Impact Assessment (EIA) is in process including the socio- economic assessment. Design colleagues have addressed all potential issues with CalMac Marine regarding swept paths and approaches. When Marine Scotland approve the EIA we will continue with the marine licences, public engagement and other preparations with a view to tender in the summer of 2024. Public engagement visits with drop in day and presentation at Fionnphort and Iona took place in April last year and were well attended. 4.1.3 Port Askaig – Marshalling area development for new CalMac vessels Port Askaig will be upgraded to accommodate the larger capacity CalMac ferries with the first vessel expected to be delivered in October this year and subsequently entering service following sea trials and crew familiarisation. The Page 16
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second vessel will follow in early 2025. Consultants SYSTRA were commissioned to carry out a study to determine options for the existing marshalling area when initial attempts to purchase land for additional space were unsuccessful. The concept design will provide nominal marshalling space of 129% of the new vessel PCU capacity and in occasional or extreme circumstances can be increased to 186% of the vessel PCU capacity while still incorporating extra safety features. Additional off site space of c.50 PCU will also be progressed. 4.1.4 CAT 5 Water Supply Protection In line with The Water Supply (Water Fittings) (Scotland) Byelaws 2014, Scottish Water require a number of piers under A&BC ownership to be upgraded to ensure private and local public water supplies are protected from backflow contamination and that harbours/terminals/pontoons etc. are adequately protected to fluid category 5. Argyll and Bute Council were notified of an initial four sites requiring immediate upgrade works in relation to private water supplies, in order to provide backflow protection, and for the prevention of contamination back into the local mains supply network: • Campbeltown Old Quay • Oban North Pier • Carradale • West Loch Tarbert We can report that these works are being completed and post works site inspections by Scottish Water, where works have been completed have been very positive. A planned programme to cover our other facilities is being developed. 4.1.5 Shore Side Electrical Supply New ferries and infrastructure upgrades today require an electrical supply for rapid and / or overnight battery charging which outstrips the existing network. Argyll and Bute Council have been working closely with CMAL and SSEN to programme these upgrades, some of which have equipment lead times of up to 4 years. This work is to ascertain the feasibility of providing a shore supply to the vessels and to confirm and outline the electrical and civil engineering requirements for providing such a supply, ensuring that the port developments are fit for the introduction of the new vessels. Initial meeting with SSEN was positive and they do not foresee any major problems in meeting the capacity required within the timescales. The works to date include: Page 17
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• Craignure - completed • Fionnphort – planning (up to 3 years lead time) • Gigha – feasibility planning (up to 4 years lead time) 4.2 Variations to Asset Management Plan Unfortunately some of the programme’s planned works have been delayed. The significant items slipping to future periods are detailed below: 4.2.1 Kilcreggan The Gourock, Dunoon and Kilcreggan combined works plans remain paused while Transport Scotland completes its work on the vessel funding. Ground Investigations preparations for both Kilcreggan and Dunoon remain ready to tender when confirmation is received that the funding for the vessels has been secured. 4.2.2 Dunoon Although the combined programme of works for Gourock, Dunoon and Kilcreggan has been paused while Transport Scotland completes its work on the vessel funding, areas where improvements are required have been identified irrespective of the outcome of the larger project. The intention is that these improvements will form ‘Phase 1’ of the larger works if they go ahead, however that decision is not required to justify these particular improvements to the facilities and utilities connections. Interim plans are in development and will be reported in due course for approval. Dunoon link span remains subject to sporadic and intermittent issues with one of the hydraulic arms. Work is progressing behind the scenes to procure spare and replacement parts and fit these with minimal disruption to the service. The staff on site however are safely managing the issues with the assistance of our framework engineers. 4.2.3 Craignure Terminal Following recent advice from the Scottish Government’s Marine Directorate we have unfortunately had to stand down our ground investigation (GI) contractor. Ground Investigation (GI) works have been awarded to DUNELM Geotechnical and Environmental Ltd with an initial plan to start on site 24th August 2023 for around 4 weeks. We were not made aware that a licence would be required, having previously been advised that the exploratory works would be an exempted activity being outside the protected area. Notification was received from NatureScot regarding a ‘Likely Significant Effect’ (LSE) regarding Harbour Porpoises ‘near’ the protected area, however subsequent communications with NatureScot were concluded positively and the LSE decision revoked. Page 18
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The Marine Directorate have since advised us that they will now require us to apply for a Marine Licence for the GI works. The licence period is at least 14 weeks – this would have taken us into the worst of the weather over the New Year, so we are now looking at these works starting in the spring. We do not anticipate our works proposals will change through the process. This will have cost implications for the project which will be in the region of an extra £500k and a slippage of the works into next financial year, however our immediate priority is now getting through the licence process as quickly and efficiently as possible and having everything in place for these important works to go ahead in the spring 2024. 4.2.4 Craignure PAS The current Passenger Access System (PAS) is beyond the working life of the equipment which is being maintained for safe operations by CMAL. Revision of design options based on CFL / CalMac operational requirements has been completed and the design and build tender will be issued shortly to allow costs to be assessed. The most cost effective solution will see as much of the new PAS used in the new terminal design. 4.3 Previous Expenditure Since 2017/18 the council has increased Fees and Charges for Piers and Harbours above inflation to fund prudential borrowing which in turn is financing the Asset Management Plan. The table below shows the expenditure and financing costs since 2017/18 with any residue being placed in earmarked reserves to fund future expenditure. There is currently £2,789,311 held in earmarked reserves to fund prudential borrowing for Piers and Harbours. Table 2: Previous expenditure since 2017/2018 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Total Actual 319,873 1,485,304 2,759,589 788,161 1,191,927 690,904 7,235,758 Loans Charges 6,797 48,330 167,337 265,299 317,932 359,117 1,164,813 Additional Income generated by uplift 113,590 177,012 515,873 560,657 987,525 1,505,617 3,860,274 Surplus income added to earmarked reserves 107,041 133,050 367,750 362,384 672,586 1,146,500 2,789,311 4.4 As shown in Table 3 below, the increase proposed for 2024 / 2025 is 3%. Page 19
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Proposed increases are smoothed over future years to avoid large spikes in the increases which would be required to fund the asset management plan in the years where large expenditure is planned. Table 3: Smoothing of Asset Management Plan Fees and Charges 4.5 The proposed increases will cover Argyll and Bute Council’s present Marine Infrastructure Asset Management Plan, involving upgrades to Council infrastructure which are required for CFL / CalMac (CFL) ferry service improvements. We continue to have close liaison with Transport Scotland, CMAL and CFL to ensure lifeline services are prioritised, co-ordinated and resources are targeted accordingly. The work carried out to support ferry traffic is generally financed through these fees and charges which are used to service loans charges for capital borrowing. 4.6 Future income The Asset Management Plan is an adaptable plan that is required to have flexibility to cope with changing priorities and circumstances. It also relies on steady and predictable income from those ferry services utilising Argyll and Bute Council infrastructure. A close watch on fees and charges income and its effect on future projects is maintained to ensure the statutory and priority works are delivered. The following table shows the anticipated income which will be generated by the increased fees and charges and the effect it will have on the earmarked balance. 2023- 24 2024- 25 2025- 26 2026- 27 2027- 28 2028- 29 2029- 30 2030- 31 2031- 32 Planned expenditure £’000 3,200 28,000 50,000 2,695 0 0 0 0 0 Anticipated Annual Loans Charges £’000 389 561 2,065 4,750 4,895 4,895 4,895 4,895 4,895 Additional funding required to pay loans charges £’000 19 172 1,504 2,686 145 0 0 0 0 Increase required if fully funded in year 0.24% 1.92% 16.34% 28.34% 1.48% 5.00% 5.00% 5.00% 2.50% Proposed increase to allow smoothing 5.00% 3.00% 3.00% 3.00% 3.00% 5.00% 5.00% 5.00% 2.50% Page 20
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Table 4: Profile of income and borrowing costs on Asset Management Plan 2023- 24 2024- 25 2025- 26 2026- 27 2027- 28 2028- 29 2029- 30 2030- 31 2031- 32 Planned expenditure £’000 3,200 28,000 50,000 2,695 0 0 0 0 0 Anticipated Annual Loans Charges £’000 389 561 2,065 4,750 4,895 4,895 4,895 4,895 4,895 Anticipated additional income generated £’000 1,908 2,176 2,452 2,737 3,029 3,532 4,060 4,630 4,938 Surplus transferred to / from earmarked reserves £’000 1,519 1,616 388 -2,014 -1,866 -1,363 -835 -265 43 Cumulative balance on earmarked reserves £’000 4,309 5,924 6,312 4,298 2,432 1,069 234 -31 12 5.0 CONCLUSION 5.1 The proposed fees and charges increase is required to fund future asset sustainability and improvement costs for the Council’s present plans for piers and harbours. 6.0 IMPLICATIONS 6.1 Policy - None directly arising from this report. 6.2 Financial - The proposed increase of fees and charges will ensure that future income is sufficient to maintain and develop the Council’s marine assets. 6.3 Legal - Considered to be none directly arising from this report. 6.4 HR - None. 6.5 Fairer Scotland Duty: 6.5.1 Equalities - protected characteristics - None directly arising from this report. 6.5.2 Socio-economic Duty - None directly arising from this report. 6.5.3 Islands - Completed works and projects will enhance service reliability and community connectivity. Page 21
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6.6 Climate Change - there are no direct impacts in regard to 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. 6.7 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 • 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, Covid 19 and potential changes in RET. 6.8 Customer Service - Customers and key stakeholders will be informed of fees and charges when set. An overall improvement in travel experience and reliability should result with improved and maintained infrastructure. Executive Director with responsibility for Roads and Infrastructure: Kirsty Flanagan Policy Lead for Roads and Transport: Councillor Andrew Kain January 2024 For further information contact: Scott Reid, Marine Operations Manager Jim Smith, Head of Roads and Infrastructure Services Page 22