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Karen Adam is now the MSP for Banffshire and Buchan Coast

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30 May 2008

Freight contract for Northern Isles firm

Businesses in the Northern Isles will benefit from further improvements to freight shipping as a contract has been awarded to Shetland Line (1984) Ltd.

The contract is for a lift-on - lift-off (lo-lo) freight shipping service, in a move aimed at securing freight operations for the islands.

Transport Minister Stewart Stevenson made the announcement. He said:

"These freight services are absolutely vital to the Orkney and Shetland Islands' economies and I am delighted that we have managed to secure them for the next six years.

"This contract will bring many benefits to Northern Isles businesses, providing an efficient and effective shipping link for goods to be transported to and from the mainland.

"This contract is the latest stage in our strategy of improving transport links to all our island communities. Local people and businesses deserve the best possible transport links to the mainland, and I am pleased that this contract has been delivered."

The service requirement is for two round trips to Orkney and Shetland per week on the Aberdeen - Kirkwall - Lerwick route.

Up to a set limit, subsidy will be paid on each tonne carried. The amount of subsidy will depend on the level of usage, expected to be around £600,000 in the first year of the contract. The new contract will start from May 31, 2008.

A competitive tender for a lift on - lift off freight service was issued on March 28, 2007.

The procurement for a public service contract follows the terms of the EU Maritime Cabotage Regulation and EU Guidelines for State aid in the maritime sector. The assistance applies only to the shipping service. The contract is for a six year period.

Shetland Line (1984) Ltd is part of the Streamline Shipping Group Ltd.

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