Rival bid to operate Isles of Scilly ferries

Ferry services between Cornwall and the Isles of Scilly are currently operated by one company

A shipbuilding company has proposed building and operating ferries to the Isles of Scilly in a move that could create competition on the route.

Harland & Wolff (H&W) said it was preparing a business case to operate two ferries from Penzance to Scilly, as well as one inter-island vessel, beginning in 2025.

It said it planned to apply for levelling up funding from the government.

The passenger and freight ferry routes are currently operated solely by the Isles of Scilly Steamship Company (ISSC).

The Scillonian III has been in use since 1977 and needs to be replaced

In 2021 the project to improve sea links was granted £48m of levelling up funding by the government.

In April, the ISSC said it would borrow more than £33m to replace its fleet after failing to make progress with government funding.

H&W said taking on commercial debt could increase costs and "adversely impact the the services being offered".

The firm said it planned to operate the vessels on an initial five-year period, with an option to continue operating for a further five years if performance targets are met.

It said in-house design work for the vessels is under way and it would be consulting further with islanders.

'Value for money'

John Wood, H&W's chief executive, said a successful bid would bring competition to the route.

"In my view, it is clear that, given the current cost of capital, access to and acceptance of levelling up funding will provide a very cost competitive model to operate either alongside the incumbents or on a stand-alone basis," he said.

"This is a fantastic opportunity and we believe competition on this route is the right thing to ensure value for money for the residents and tourists of the islands."

The Isles of Scilly Steamship Company declined to comment.

Steve Sims from the Isles of Scilly Council said the announcement had "dropped like a bomb" and that islanders he had spoken to were "very positive" about the proposal.

He said two companies servicing the Isles of Scilly could be "extremely problematic".

"I know the route will not support two operators", he said.

The proposal has now been sent to the Department for Transport who will make the final decision on the scheme the funding goes towards, Mr Sims added.