Falklands : FIRS Goes One to One with Dick Sawle and Ken Johnson
Submitted by Falkland Islands News Network (Juanita Brock) 22.04.2010 (Article Archived on 06.05.2010)
FIRS quizzes Dick Sawle ans Ken Johnson about the proposed new Port
FIRS GOES ONE TO ONE WITH DICK SAWLE AND KEN JOHNSON
A Report for FIRS by Stacey Bragger (SB) 21/04/10
SB: On today’s programme I will be talking to Councillor Dick Sawle (DS) and the major Projects Director, Ken Johnson, (KJ). They will be discussing the future of the deep water port project. To begin with, Councillor Sawle reports on the current status of the project.
DS: At the moment we just had a visit from Royal Haskoning, who was down here last week and still here unfortunately due to the air-bridge problems. So I thought it would be a good idea for Ken to come along to give us a bit of help over the radio. They came down to do a bit of work on the various site options for the new port, which are about eight in total. They held discussions with Members of Legislative Assembly (MLAs) last week as well as Government officials and the wider stakeholder group and fishing companies in particular.
SB: (To Ken Johnson) I detect there is a lot of work going on at the moment. How do you feel the project is progressing currently?
KJ: Really we have been trying to focus this down. This question choosing a site for the new port has been around for a long time. We are going to bring this to a head and bring it to a conclusion or at least give up to date information which will enable EXCO to make a decision on the preferred option, if indeed it decides to continue with the project. We have been looking at what can be done with FIPASS. Some years there was a remediation project and we have been looking basically at what is the minimum cost to keep FIPASS going for the foreseeable future with a better working life. There are some dramatic things you could do with FIPASS – we could start moving the barges around and you could start clearing away warehousing and improving operational capabilities so it has a greater use for the fishing industry, really. So there is quite a lot that can be done from FIPASS. It will cost quite a lot of money to do it actually and the bigger configuration is going to cost a great deal of money. On top of that we have been looking at the new port sites and the four sites we have been concentrating on are Stanley Harbour, Port Herriot, and two sites in Port William, namely Navy Point and Ordinance Point. And we’ve now got up to date cost information on each one. We have assessed the pros and the cons of each site. Each site has gain for us and each site has problems. In fact, if there had been a good site for a new port it would have been chosen a long time ago. All of the sites that are not in Stanley Harbour have cost penalties attached to them. You have either got to drive a new, very long road down to Navy Point or, in case of Herriot it’s potentially a very good site location but it has this other issue of a sand bar and it is very expensive to dredge. At the end of the day the complete report is a complete assessment both technically of the various sites and also from a business plan – business case – point of view. We have actually for the first time looked at the business case for the port. The two reports will put us properly in the picture.
SB: I think you are having thoughts that the business case should be worked on before getting into where should it be?
KJ: I don’t necessarily agree with that. I think they feed each other. For any person who will have the great fun of choosing the site you cannot progress this project without actually being bold enough to choose the site and moving the project forward. The business case in some elements apply to which other ports – for example, the revenue from the new port is likely to be the same whether it’s in Port Herriot or in Navy Point. It’s the costs that are different.
DS: But there again the business case and the site also go hand and hand as well. One of the options we have been looking at is FIPASS – repair it – refurbish it – reconfigure it – all those carry a fairly hefty price tag and, of course, if you use FIPASS for the next 20 years, all of them result in ongoing repairs and maintenance every single year because you are still dealing with the same metal boxes sitting in the water. And the other thing – on the business case at FIPASS is that FIPASS itself will restrict the business case because it’s not capable of what we are looking for in a new port so these are the options that Ken outlined there that would result in an economic benefit. But of course they all carry a price tag with them so it’s quite a complicated thing so it is vital to go back to the very first steps as to why this project initiated back in 2001, really. The Mott MacDonald report was the first serious report that spoke to this issue. And the reason for that was because we have always known that FIPASS has a limited life expectancy and will always require a lot of R and M. One of the interesting things is that we are looking at all of these sites and talking to people, finding out what their views were.
SB: Is it going to be discussed, do you think – very soon?
DS: Hopefully at the end of May Executive Council will be able to look at the options in the paper and decide whether or not the project should continue and if it does continue we need to narrow down to one or two options. But the paper has yet to be written. I can’t say what would be in the paper yet because I don’t know.
SB: Have there been any ball park figures already for any of the sites?
AJ: There aren’t, Stacey, you’ve got to accept at this stage it’s very consensual so anything I mention is purely indicative but we are talking about for a new port anything between – depending on the type of construction – anything from the range of £45 Million to £60 plus Million when you take into account all the things such as dredging and power and roads and so on. So unfortunately these projects are very high in terms of their infrastructure cost and that’s world-wide. Those sorts of figures may sound large and frightening but you should also bear in mind that FIPASS was constructed in 1984 and cost something in the region of £24 Million for the UK Government before it was brought down here. We are 26 years on now and therefore those figures are not out of the price range. In the case of FIPASS as Dick said, one of the issues is the on-going maintenance costs – it would be higher to maintain the structures. Also they would have a limited life. With FIPASS you can imagine a limited life of 20 years compared to a new port – it would be at least 50 years before you are involved in any serious maintenance and life beyond there, whereas with FIPASS the capital costs will be less.
SB: I guess the immediate question is how is it going to be funded and are there financing plans for the various options?
DS: The financing for a new port like this which I think may be the biggest potential project if it goes ahead it is, of course, absolutely crucial. You can’t simply take £55 Million or £60 Million out of reserves to simply build a new port. There are lots of ways to skin this particular cat. One of them is to look for private sector finance as well as public sector finance, the possibility of EU grants though that’s fairly remote, I would think, soft loans from the EU, there’s a mountain of different things and of course that’s one of the areas that needs to be looked into before any firm decisions are made.
SB: Have any figures of how much money that could be generated from the creation of a new port? The investment is several Million Pounds. Are people likely to get this back?
KJ: There are two distinct elements of this. One of them is the viability of the port as a commercial operation and so the amount of revenue that would come off the deck of the new port, if you like. And the reality with the site in the Falklands, it is obviously quite a small port from a world-wide prospective. We spent quite a great deal of time projecting volumes, fishing tonnage, traffic – the numbers of vessels that will come and berth in the new port so we can add that bit on – we put a lot of effort into that. The infrastructure costs are greater than the revenue by a long way. So if we have to rely just on commercial revenue it doesn’t make a great deal of sense. But when you look at it from a wider prospective and consider the socio-economic benefits to the Falkland Islands, it begins to make a great deal of sense because potentially the benefits to the Falklands’ community are very great indeed. And so the project then begins to look attractive. That is its rationale and that is why you build it. From a simple point of view, it’s an island economy. You need a gateway to trade and a port is a gateway to trade. Therefore, it’s appropriate infrastructure and it makes sense for FIG to drive and invest in this project. But as Dick is saying, the funding package – the funding cocktail is complicated and it will take a little while to unravel. The case is there. Sorting the funding package out will take a little while.
DS: Whilst the new port, of course, will not just be build for fish, we do have to remember that fish brings in 60% of our GDB. And that’s worth about £169 Million in total. So it’s a big piece of business but the port is our gateway and our means of communicating with the rest of the world and when you live on an island you need to keep those doors open. So it’s a big topic and a big issue.
SB: I guess it seems fairly strange that where it’s going to go has been hanging around for so many years It seems so bizarre that question is going to be answered.
DS: I think that question has to be answered pretty soon because if this project is to go ahead at all we have got to narrow it down. The two options, I think it’s fair to say, were favoured by all the various people that we consulted last week who are the major users of the port – the stake holders and the fishing companies. The two options they preferred – and I think unanimously – were both in Port William. So I think a site in Port William is quite likely if the decision is made to go for a new port.
KJ: Unfortunately, Port William is not the cheapest, either. But that’s the way of the world, isn’t it, really?
DS: That’s the thoughts at the moment but of course, there are many decisions to be taken before we get there, I think.
SB: There is still a long way to go in this particular project?
DS: Yes, I mean at the end of May we may decide to do more work on one site – say Navy Point. That requires for some survey work to be done in Port William. It would require measurements of swell, for example and it would require fine-tuning of the business case for the port and so on. That’s if there is a decision. I hasten to add that decision is not mine. That’s a decision which takes place in May – I hope.
SB: You mentioned the sand bar issue in Port Herriot. Can you tell me about that?
KJ: it’s unfortunate because in many ways Port Herriot is a very suitable location. It’s separate from Stanley but it is close. For instance, there is a great deal of unrestricted development land adjoining its flat topography. There is very deep water once you are into Herriot. But it has two issues which concern the master mariners in the community, I think. One is swell and also the sand bar. The sand bar is fairly well documented on admiralty charts. And it is a long sand bar that builds gradually from the east and then falls off like a cliff quite amazingly once you get into Herriot. So it goes from 5 Metres down to 17 or 18 metres once you are inside the area. To move the sand bar involves considerable dredging and the estimate is that would cost something in the order of £6Million to dredge that amount of sand. We haven’t been able to ascertain the depths of the sand dune before you hit rock without further investigation. But initial soundings show that it is sand and can be dredged. However, we would actually need to be very certain of that and make an investigation. What we have found is – looking from admiralty charts back in the 1870s to now the bar has been moving gradually westward but it is very, very gradual at about a metre about every 10 years or so. I think that’s a fairly common feature of the Falklands. We have to look at Surf Bay and how the end of Stanley Harbour is closed. Possibly, eventually that bar will continue to build until Herriot is closed in the same way.
SB: Ken, Your time as project Manager is coming to an end. How do you sum up your time working on this project?
KJ: It’s been very interesting really. I had never been to the Falklands and I have spent a year and a quarter here now. There are memories I will always have of being down here. Certainly the project itself is very interesting. I would have loved for it to happen in half the time frame. I am used to having things happen a little bit more quickly than they have here but certainly it will be something I will always remember and I will be leaving the Islands now. I just wish everyone well with it and hope EXCO makes a decision on the preferred site and then moves this forward.
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