Kallin Harbour and RET

The current expansion of Kallin Harbour in Grimsay is a masterpiece of innovative engineering, an grossly overdue, as the photo demonstrates.

It involved lowering preformed concrete boxes into the gap between islands to provide expanded harbour facilities for commercial and leisure craft. Having a number of clients who use the harbour, I know how grateful they are for the work continuing.

And continue it did, after a new funding decision by the Comhairle that is unbelievably complex, Byzantine, and far from the best for the Council as a whole.

Let me explain; and this gets tricky.

Due to the seabed not being quite as expected/surveyed (and there may be another story there), additional costs were forecast. The meeting was held in private so that the Contractors didn't know the budget that was being set, but if they were worth their (sea-)salt then they should know the exact cost of £500k anyway.

The money that should have been available was to come from the Hi-Trans budgets, but the Government have moved the capital elements from a central pot to the individual councils, with the Comhairle getting a £1m windfall/reallocation that has to be spent on Hi-Trans type projects from the Public Transport Budget.

Rather than committing this to Kallin, this £1m has been taken to central funds, and the money has had to be found elsewhere.

'Prudential Borrowing' was the answer. You might know it as HP. Or as the failed and discredited PFI scheme.

It involves funding an otherwise unaffordable capital project on the never-never, by using the savings that the capital expenditure generates to service the borrowings. This was called 'Spend to Save' and was a pragmatic way of encouraging a business like approach to the Public Sector.

Was. Now it is a mechanism to fund the unfundable by forcing savings elsewhere to pay the debt.

It has moved from
* Buy an old car using the savings on bus fares, to
* Build an extension on the house on credit cards, with the hope that you can cut your spending

The funding for this Prudential (sic) scheme is coming from the increased revenue at Lochmaddy Pier as a result of the increased traffic that RET will generate. And any shortfall from a £5 on the 3:15 at Cheltenham, no doubt.

To fund borrowing from a known income stream is sensible enough. To fund it from an unknown source on the back of a newly introduced policy whose impact we do not yet know seems a risk far too far.

Three questions:

• How will the work be funded until RET kicks in in October?
• If there is that much extra traffic travelling through Lochmaddy, how will the necessary repairs to that pier be funded?
• Do the Government expect RET to be used to fund other capital projects, or to improve the travel experience for all passengers?