Hans J Marter

31 May 2008

SHETLAND Line (1984) Ltd has been awarded the long awaited government subsidy contract for lift on – lift off (lo - lo) freight shipping services to the northern isles.

As of today (Saturday) the shipping line, part of the Streamline Shipping Group of businesses, can claim a subsidy on each tonne carried.

The amount the government will pay out has been capped at £600,000 per year. Shetland Line is required to do two round trips to Orkney and Shetland per week on the Aberdeen - Kirkwall - Lerwick route.

Shetland Line was the only contender for the six year contract, after the Icelandic shipping line Eimskip pulled out of the race some years ago.

Announcing the contract, transport minister Stewart Stevenson said it would bring long term stability to freight operations for both Orkney and Shetland.

Mr Stevenson said: “This contract will bring many benefits to northern isles businesses, providing an efficient and effective shipping link for goods to be transported to and from the mainland.

"This contract is the latest stage in our strategy of improving transport links to all our island communities. Local people and businesses deserve the best possible transport links to the mainland, and I am pleased that this contract has been delivered."

The contract approved can be described as an operating subsidy, which will help Shetland Line to maintain and stabilise the freight service in the light of ever increasing marine fuel and chartering cost.

It replaces the tariff rebate subsidy scheme (TRSS) which was scrapped in May 1995.

Initially, it had been hoped that the lo-lo contract could be awarded and run in parallel with the NorthLink lifeline service, which receives a subsidy of £31 million.