Push to look at ‘alternative’ harbour uses
Commercial review recommended
Council finance chiefs are recommending a review of commercial operations at Perth Harbour.
It comes as a new paper suggests the loss-making local authority-run port will not break even for years even under the most optimistic scenario.
A report due to go before the council’s strategic policy and resources committee tomorrow urges its members to authorise officials to start examining “other commercial opportunities” the inland port could support.
It says the volume of cargo being moved on and off boats at Perth Harbour continues to dwindle despite the best efforts of a new harbourmaster brought in at the tail end of last year as well as the council’s own inward investment team to try and persuade companies to use it more often.
The paper also recommends councillors let officials put a proposed dredging programme - which would increase the window of time within which pilots would be able to guide ships in and out of the port - on hold until is it clear how much the operation would actually cost.
Justifying taking stock at this juncture the paper provides projected financial forecasts with one scenario seemingly suggesting that even if the amount of ships coming into Perth Harbour were to almost double every year it would not break even until at least 2034/35.
And under an even more optimistic scenario anticipating hundreds of extra ships coming into the harbour as well as hundreds of thousands of tonnes of extra cargo being moved the report again seemingly suggests it would not break even until at least 2023/24.
“The harbour would have to attract in addition to the above projections [in the previous scenario] 160,000 additional tonnes of cargo equivalent to an additional 100 ships (average 1600t) or 1,300% traffic increase and income of £204,000 with revenues rising to £372,400 in 2021/22 [to break even in 2023/24],” the document states.
“This would be in line with approved An aerial view of Perth Harbour
business plan projections, but will be unachievable due to the current market conditions and the current harbour traffic.
“This raises serious concerns about the viability of the approved business case. The level of traffic needed would be the level of traffic generated by Inverkeithing or Stornoway minor ports and 52% of Dundee port traffic.”
Explaining the strategy officials have been using for the past year to market the harbour the report goes on: “A strong emphasis has been put on relationship building through the Harbour Users Group and an ‘open for business’ and pro-active mind-set has been developed over the past year including a new website, event attendance and professional networking.
“This was led by the harbourmaster, who has a significant industry experience with the support of the Invest in Perth team. However, to date this has not led to increased cargo costal shipping traffic.”
The report then continues: “In addition to cargo coastal shipping, other commercial opportunities have been explored such as using the harbour as a base for specific fleets or passenger traffic. Some interests have been noted.
“If such opportunities were taken forward, it could offer an alternative business model which may require to review the current harbour operations and may not need... dredging. It might be beneficial to test the market to develop this alternative business model.”
Tomorrow councillors will therefore be asked to instruct the depute chief executive to explore these other commercial opportunities further as well as postpone the dredging contract tender publication for the time being.
The paper says the result of the review, if it is agreed, will be reported back to the strategic policy and resources committee later this financial year.
Serious concerns about the viability of the approved business case