Friday, July 13, 2012
In 2002 a tunnel was proposed for the crossing between the Island of Yell and the Shetland mainland. Norwegian tunnel experts were consulted and a tunnel was designed for a price of £22 million, after some discussion within the Shetland Islands Council this price was pushed up to £35 million, the Yellsound tunnel option was turned down and instead the S.I.C. decided to build new ferries and terminals for a price of 23 to 25 million pounds. The official running costs of these ferries during the past 8 years have been in excess of £4 million per annum and with the increase in fuel prices may now be nearer £5 million per annum.
It appears the increase in the tunnel cost from £22 to £35 million is nothing to do with the cost of constructing it and entirely the cost of the Shetland Island Council watching (overseeing) it being done. Since that amounts to only 60% of the cost of actually building it I suppose SIC can be congratulated for being less parasitic than, for example, TIE the overseer of the Edinburgh trams whose interference destroyed the project.
Nonetheless it is quite clear that they managed to articifiailly increase the cost of the tunnel, which is inherently lower than that of replacing the traditional ferry and then, only by ignoring the fact that a ferry costs quite a bit of money to run, were able to claim it was the cheaper option.
After all the ferry operators have been making money there for generations and know who to lobby.
However to make the ferry costs low enough to ignore we had to have the traditional government tactic of pretending the costs were going to be low when "deciding" and then being astonished when they rise afterwards.
1.3.1. Ferry Service Costs
Between 2001/02 and 2004/05, the net costs of providing the ferry services rose from
£6.9m to £12.2m, an increase of 77% over 3 years. Over this period the principal cost
increases were as follows:
Wages and salaries grew by 33% to £ 6.687m,None of these costs are in line with inflation In fact they are all things for which the future costs ought to have been known in advance and it is very difficult to believe they were not.
Direct finance costs (SIC finance code 3***) grew by 71% to £1.846m.
Operating leases on new ships (SIC code 1209) increased from zero in
2001/02 to £ 1.50m in 2004/05
Since then the Council have determined that their single ferry is, after all that, not enough and want to start a new round. According to the Shetland Times
A tunnel to Whalsay would be too expensive for the council and the idea should be abandoned in favour of building a new ferry terminal at North Voe, upgrading the Laxo and Vidlin terminals and buying a new, larger ferry to share the route with the Linga, according to SIC officials.
In two reports laid before councillors, head of finance Graham Johnston and head of transport Michael Craigie reveal that the basic capital cost of a fixed link would be between £76 million and £83 million, £23-28 million more than for the ferry service.
The figures are based on a range of £10,000-£11,000 per metre and include connecting roadworks but not capital refurbishment costs over the 120-year lifespan of a tunnelOf course, yet again, they have made no mention of the ongoing cost of a ferry. I put up this comment which has not been disputed.
The £10/11,000 per metre is at least twice what the average tunnel cost in Norway has been. These fit fairly well with the £35 million quoted. Interestingly the costs here seem to be a council estimate rather than a firm quote from the proposed Norwegian builders.
Why would that be? One option is that they have such a firm quote and have decided not to make it public. The other is that they decided not to ask, relying instead on council estimates. If there is a 3rd option I would like to see it.
I also note that on the ledger against a tunnel is “but not capital refurbishment costs over the 120-year lifespan of a tunnel ” but the same objection to running costs is not used with a ferry. Any ferry’s cost is obviously mainly running costs or are we expected to believe that the ferry will be running, cost \& refurbishment free, in 120 years.
Clearly the council had its mind made up long before it asked the tunnellers for a quote, or more likely didn’t & just invented the figure. The fact is that a tunnel would initially cost little or nothing more than a ferry, would have marginal running costs and would allow far more traffic to move, far faster & more conveniently.
These tunnels have changed life across Norway and the Faroes. My guess is that the councillors have been sat on by Holyrood. Holyrood decreed that they needed a new Forth bridge because a 3km tunnel under the Forth would cost £6,500 million and they don’t want to be made to look like liars.Of course there is obviously no comparison between the amount of transport a tunnel can carry compared to a ferry, or even 2 ferries. Nor the convenience of the tunnel. Adding the new ferry cost to the previously incurred ones it looks certain that the whole farrago will cost well over £200 million (assuming no cost overruns and that the ferries will, from now on have zero operating costs ;-).
By comparison the original tunnel offer was £22 million - 1/10th as much. I suspect asking for a formal quote now would come up with something similar again - inflation has raised prices but as the technology progresses tunnelling costs fall. I even suspect this is why a formal quote has not been asked for.
The failure to tunnel the Forth has dismayed me as it is obvious it could be done cheaper, and with less future problems such as corroded cables and closures for weather.
Why people are not up in arms about this is equally surprising. Why are politicians so bloody pig headed and stupid. Is it arrogance?