19 January, 2007

MORE THAN 2,200 Shetland jobs depend on the success of Lerwick harbour, with the potential of a further 270 being created over the next five years, a new study has found.

Yesterday (Thursday) Lerwick Port Authority published the findings of an economic assessment study, which shows the significance of the port to the overall islands' economy.

The study comes only days after the Court of Session found in the port authority's favour in a protracted legal battle with Shetland Islands Council, and lifted an interim interdict that prevented dredging work in the harbour.

Meanwhile Lerwick Fish Traders, one of the largest employers located in the harbour, has congratulated the port on winning the legal battle.

The economic impact assessment carried out by locally based consultants AB Associates is an update of previous reports in 1996 and 2000. It found that Lerwick Harbour had managed to diversify its operations over the last few years, putting it in a strong position for the future.

Key changes in comparison to the year 2000 study are:

* a 65 per cent increase in general vessels, including cargo and roll-on/roll-off, with overall ship numbers down 20 percent, due primarily to a 50 percent drop in fishing vessels;
* the average tonnage of vessels increased by 140 per cent, with gross tonnage doubling in a significant reversal of the previous trend - as there was in cargo handled, with 37 per cent growth. Roll-on/roll-off cargo grew 45 percent;
* passenger movements - domestic, international and cruise - increased by 102 per cent;
* fishing-related activity fell by 50 per cent, while the gross tonnage of vessels and landings rose. The value of landings increased by 277 per cent.

The port authority generates £11.4 million for the local economy, with 77 per cent of its income coming from external sources, and with 80 per cent of its income being spent locally.

"This means that Lerwick Port Authority is now in a stronger position to move forward in the next five years than it was in 1999 and, indeed, there are several possible opportunities for new development and growth over the next five years," the report read.

The port's deputy chief executive Sandra Laurenson said: "While there are still issues to be resolved, the assessment confirms that the port is on the right track, with considerable progress made and further potential to be realised."

The report also found that those consulted viewed Shetland Islands Council's potential development of a bridge to the island of Bressay - with navigational restrictions on vessel movements - as the main threat to the harbour.

"In more general terms, the local authority was seen as a threat both in terms of the bridge issue, the breakdown of communication between the two organisations, and also the potential development of other Shetland Islands Council-owned piers," the report stated.

Meanwhile Michael Stark, the managing director of salmon processing company Lerwick Fish Traders, has welcomed last week's court ruling, as it would allow LFT to develop its business further.

The company is in the process of constructing a £3 million extension to its factory in a bid to move into secondary processing. Mr Stark said should dredging and subsequent reclamation of new land re-start soon, his company would directly benefit from such a move.

"The dredging and future land reclamation work will have a major impact on the development of our business.

"It will allow us to proceed with plans for a new berthing area for our well boat and the installation of shore based state-of-the-art pumping facilities and temperature controlled landing tanks for around 30,000 live salmon.

"It will also create more ground space to accommodate future operational developments and allow us to extend our customer services.

"This project will form the next development phase of the company, which is currently undergoing an extensive expansion project to accommodate a value added processing facility that will open in November 2007," Mr Stark said.

"Our harvesting, primary and secondary processing operation will employ over 200 people by the end of 2007 making us one of Shetland's largest private sector employers."

The economic impact assessment identified various key investment proposals, including harbour dredging and reclamation; fish processing and fish meal factory developments; further improvements for yachts and cruise ships; a new fish market; a new deep-water jetty; and new business units.

"The main opportunities are in fish processing, oil-related decommissioning and tourism. Over 270 jobs and £30-45 million of output could be generated over five years if opportunities are realised," the report concluded.