Private loan for Isles of Scilly ferries 'may stop government cash'

A planned Scillonian IV passenger ferry will carry 600 passengers over three decks

Plans to use a private loan of £33.6m to fund new Isles of Scilly ferries could put Westminster cash "in peril", a councillor has said.

The Isles of Scilly Steamship Group plans to use the loan to buy three vessels.

Isles of Scilly councillor Steve Sims says the government may not offer money if alternative funds are available.

But the government said it would still work with "relevant parties to meet the needs of businesses and the community".

The loan will help fund the £42m project to obtain a new passenger ferry and two freight vessels, with them sailing from the mainland to the islands in 2026.

The company had hoped to secure government funding but said "no tangible progress" had been made since an initial offer of money 18 months ago.

New freight vessels are also planned for purchase

Mr Sims, the lead member for economy, tourism and transport on the islands' unitary authority, said the "potentially terrifying" move to borrow the money could put Westminster cash "in peril".

He said: "It's difficult to put in a bid for public Levelling Up money to buy new vessels when a private company is going to do it themselves.

"The government is not going to run with that."

He added: "I think that the outcome of this will be very detrimental in terms of fares, freight and everything else."

'To be bold'

Stuart Reid, chief executive officer for the Isles of Scilly Steamship Group, told the BBC: "We've made a decision to be decisive, to be bold, and also make sure the certainty in terms of delivery of these vessels."

He added: "Our intention is to support island partners, the Council of the Isles of Scilly and the Department for Transport to ensure the other aspects of the Levelling Up project, which included infrastructure work on St Mary's and Tresco, can still be delivered."

The Department for Transport said it would "continue to work with the Council of the Isles of Scilly and relevant parties to meet the needs of businesses and the community served by the sea link project to replace vessels for the ferry services".

It added that "all Levelling Up funding is subject to proving value for money for the taxpayer".

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