24th October 2018
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Purchase of tug backed after chairwoman offers casting vote in support of vessel

Members of the council’s harbour board were in deadlock yesterday over whether the authority should buy a leased tug for Sella Ness.

It took the casting vote of chairwoman Andrea Manson to back the purchase of the 32-metre, two-year-old Multratug 29, which has been chartered to the SIC since April.

The 2-2 vote came despite the tug getting a ringing endorsement from those charged with operating her.

Tug skippers Frances Fraser and Colin Alderson have been growing in confidence with the tug since she was “bare boat” chartered.

Members were asked to consider whether they would recommend to the full council that the vessel be bought for £7.6 million.

Allison Duncan

However, Allison Duncan urged matter be held back until January. He cited concerns previously raised by his North Mainland counterpart, Alastair Cooper – who did not attend the meeting – and called for a more “detailed and comprehensive report” to be compiled.

The meeting heard concerns that the council might lose out should the tug service be put out to tender at a future date.

“Councillor Cooper’s proposal was that he would rather wait until January to see a full business case,” he said.

But depute leader, Steven Coutts – speaking after a detailed presentation from acting harbour manager John Smith – said he had heard enough to be reassured.

“If there’s a motion I will propose an amendment recommending the council exercises its right to purchase,” he said.

“The technical aspects of this tug were never in question. The question was on the financial aspect and whether this is the right time to be procuring a tug.

“But I’m reassured we’re not going to change things tomorrow, and that this tug is going to be required for a good few years yet.”

He added there was a financial saving, and the tug was fit for purpose.

In the vote he was backed by Ryan Thomson, while Stephen Leask sided with Mr Duncan.

Debate over the tug had initially gone before the policy and resources committee. But questions were asked about why the harbour board had not been consulted on it first.

Ms Manson said it was right for questions to be raised by the board.

Andrea Manson

“One of the reasons I asked for this special meeting was because, to be left out of the consultation process when we, as the harbour board, would be the ones that carry the can if something goes wrong,” she said.

Board members were perhaps naturally cautious, given the recent difficulties experienced with the now departed Spanish-built Solan and Bonxie, which the council bought in 2007.

However, pilot Michael Irvine said Multratug 29 had already proven her worth, and was regarded as “excellent”, adding she had performed very well in trials. He added the skippers had become well used to operating her.

“It’s as if that tug has been there for years,” he said.

“It would seem to me the obvious thing to retain that tug, if possible.”

Mr Irvine said the skippers had managed to “get up to speed” with the new vessel without difficulty.

The tug is being regarded as a replacement for the Tirrick, which was sold to Greek buyers in June and has now left the council’s fleet.

A report by Mr Smith stated the tug “meets service specification and has demonstrated satisfactory performance”.

A business justification case attached to yesterday’s papers stated: “A full performance appraisal of the vessel has been undertaken and will continue to be updated as her time in service extends.

“There have been no operational issues highlighted or suggestions that the vessel has not met our performance specifications, rather that the vessel has in most cases exceeded both the specifications and expectations of sea staff.”

The backing from operators means the recommendation will go to the full council to buy the tug after six months of operation on 25th October.

The purchase would be funded through the fees and charging structure within the harbour account “and therefore not impact on the council’s financial position”.

About Ryan Taylor

Ryan Taylor has worked as a reporter since 1995, and has been at The Shetland Times since 2007, covering a wide variety of news topics. Before then he reported for other newspapers in the Highlands, where he was raised, and in Fife, where he began his career with DC Thomson. He also has experience in broadcast journalism with Grampian Television. He has lived in Shetland since 2002, where he harbours an unhealthy interest in old cars and motorbikes.

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One comment

  1. John Tulloch

    The cost of borrowing to buy this tug is reportedly £716, ooo per annum for 20 years, i.e. £14.3 million.

    Similarly, the cost of leasing is £1,040,250 per annum = £20.8 million.

    Therefore, the apparent additional cost of leasing v purchase = £6.5 million, over 20 years i.e. 325,000 per annum, for which the SIC will take on the risks associated with ownership, as opposed to having the rights of a lessee.

    We aren’t told what “bare boat” charter means. Does it mean for example, that the SIC was responsible for maintenance of the leased vessel? Will there be any additional, ongoing costs associated with ownership?

    A concern was raised previously at policy and resources committee by Cllr Cooper that, were the tug service outsourced to contract in the future, the SIC could lose out by having to sell the vessel prematurely.

    Cllrs Duncan and Leask’s caution regarding “fire sale prices” is well-placed

    Of course, if the tug is bought now, that will then become an argument for not putting the tug service out to tender?

    Reply

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