Hans J Marter

28 September 2007

THERE WAS a sense of bitter disappointment among Shetlanders when the Faroese super ferry Norröna left Lerwick Harbour for the very last time this morning (Friday).

The final departure of the 163 metre ferry, a symbol of fostering closer relationships across the North Atlantic, left behind a community wondering whether it had been worth investing more than £4 million of its oil funds into the Smyril Line.

The money was badly needed by the Faroese shipping company, who had manoeuvred itself into severe financial difficulties six years ago, and would not have been able to pay for its new £60 million flagship.

Shetland Development Trust saw a unique opportunity, jumped on board with bags full of money and secured in return a five year guarantee for the vessel to call at Lerwick more regularly than the company’s previous vessels.

The Scandinavian link had initially been established in the mid 80s with the old Smyril. This was discontinued in 1994, but Smyril Line was back in 1998 with a newer vessel, also called Norröna.

But when the new Norröna was launched in 2003, Shetland saw itself developing as the cargo hub of the North Atlantic with extensive links to Denmark, Norway, the Faroe Islands, and through NorthLink to the Scottish mainland.

Consultant reports suggested that loads of rich tourists from Scandinavia and the European Continent would make Shetland the holiday destination of their choice, thereby building a strong tourism industry.

But Smyril Line had other plans. In fact, the company first went through even more financial difficulties, caused by the collapse of the Faroese salmon farming industry and the subsequent lack of cargo.

The company was forced to sell the family silver and to refinance several times. But as Smyril Line has always been a company built on national pride, the Faroese were never too keen to see Shetland having more influence in the company than what they had already.

Last year, Smyril Line recorded an operating profit for the first time in years, and the fateful decision was made to first reduce the scheduled number of calls at Lerwick for this year, and then to scrap the isles altogether from its timetable. During the summer months, the Norröna now sails to Scrabster as her Scottish port of call.

Shetland Development Trust tried to intervene by going to court to stop the move and also by offering new money, but this came to a sudden halt when the European Commission confirmed that a complaint under state aid regulations had been received.

Yesterday, the architect of the Shetland investment, council chief executive Morgan Goodlad admitted that the investment strategy had not worked out long term for the community, although economically there was no good reason for Smyril to drop Shetland at this point in time.

“It has not worked out from Shetland’s point of view. It is arguable that perhaps it has worked out for the company’s point of view. Last year the company made a small profit with Shetland being part of the timetable.

“Clearly, in my mind, that would have proved the viability of the project with Shetland included.

“Unfortunately the company has decided that removing Shetland from their route gives them greater opportunities to increase profitability. That, of course, remains to be seen,” he said.

The severance of the long established link is causing hardship for the many people who have been involved in maintaining historical links, and making new friends, across the sea. The ferry service played a vital part in keeping those relationships alive.

Peter Campbell, the secretary of Shetland Norway Friendship Society, and also the Shetland Faroe Group, said the human cost of discontinuing the Shetland link was high.

“The loss of the services means that everybody involved in establishing these friendships over the years will have great difficulties in sustaining these links. We had great friendships established between people in Shetland, people in Norway, people in the Faroe Islands, and that will become increasingly difficult to sustain.

“Many people feel that this is particularly hard to take with the investment Shetland Islands Council made through its development trust to purchase the ferry for company and as a major shareholder in the company. It is very, very sad that she will not be any longer calling here,” he said.

His sentiments were echoed by Faroese man Fisher Johanneson, who this week embarked on his 41st journey between Shetland and the Faroe Islands.

He said there was no doubt in his mind that over the years the Smyril Line vessels had greatly contributed to fostering closer links between the island communities in the North Atlantic.

“This is a very sad moment. This has been a very good connection between the islands and islanders in Shetland and in Faroe,” he said.

One local industry sector suffering from the withdrawal of the service is tourism. The annual value to the economy of Norröna coming in to Lerwick had been estimated to be between £4 and £7 million annually.

While these figures were questioned by many, it is nevertheless clear that many tourism operators had greatly benefited from the Scandinavian link.

Visit Shetland director Andy Steven said last night: “The Norröna’s last departure from Shetland on Friday marks a disappointing decision that will certainly have at least short term repercussions for tourism in Shetland.”

He added that Atlantic Airways’ commitment to providing an airlink between Shetland and London Stansted did compensate for some of the losses.

Mr Goodlad said that he shared the disappointment expressed by businesses and private individuals.

“I totally understand the concerns of the community. The very reason that we invested was to increase the service and now after five years with the new ship the service is gone.

“On the other side, it would appear that the investment is with a profitable company and one would hope that as time goes on dividends and perhaps the value of the shares will be equal to the initial investment.

“However, that is not mitigating the fact that the ship is not going to be here. That means severe disappointment to the community here and clearly disappointment to those of us who made the proposals to invest,” he said. But Shetland’s initial investment was safe, he added.

Meanwhile, hopes are high that Lerwick Harbour could soon become again an international port.

A newly formed consortium is busy developing plans for a new ferry service between the Norwegian port of Kristiansund, Lerwick, and a UK port, possibly Rosyth. The plans are being driven by Shetland and a public/private initiative in Mid Norway.

Earlier this month, the consortium reported that it had received expressions of interests from eleven ferry companies who are keen to run such a service. The tendering process is currently under way.

Lerwick Port authority chief executive Sandra Laurenson said the harbour was ready for any new ferry operator that wanted to make Lerwick a port of call.

“It has been great to have an international ferry service here from the mid 1980s, and although this is the end of this particular company’s involvement at this time, we are quite hopeful that they will either be back in the future or another line will pick up the route in the North Atlantic.

“We built this terminal a number of years ago. We can take virtually any size of ship. We are one of the few ports in Scotland that can handle ro-ro ferries of this size, so we are quite well placed for other lines that might pick up the route in the future,” she said.

This could be happening as soon as 2009.