New 'lifeline' passenger ferry and cargo ships to serve Isles of Scilly and Cornwall

The Scillonian IV, a new passenger ferry, will be among the replacement fleet planned for 2026. Credit: Isles of Scilly Steamship Group

The Isles of Scilly will get new passenger and freight vessels worth £42million of private funding after "frustrating delays" to a grant from the Levelling Up Fund.

Islanders can expect the ferry and two cargo ships to be up and running by March 2026.

They will replace the existing Scillonian III, Gry Maritha and Lyonesse Lady which are 46, 42 and 32 years old respectively.

The vessels are nearing the end of their service, meaning they are unreliable and costly to maintain.

The major shipbuilding programme by the Isles of Scilly Steamship Group will be the biggest investment in the company's 103-year history.

It follows a conditional offer of £48.5million from the Levelling Up Fund, in 2021, for new vessels and infrastructure.

However the Isles of Scilly Steamship Group says this money yet to materialise.

The firm says "no tangible progress" had been made in the past 18 months following the initial offer and there had been "significant changes to the terms of the offer".

It added that due to "growing frustration with the delay both on and off the islands", the company had reverted to its original plan of privately financing the new vessels.

ITV News has contacted The Department for Levelling Up, Housing and Communities for comment.

Now the deal will now be funded by a £33.6million loan arranged with Lombard NatWest, one of the UK’s largest asset finance providers.

Stuart Reid, chief executive of the Isles of Scilly Steamship Group, said the announcementreaffirms its commitment to "maintaining the lifeline service" and sets a clear timeline for replacing the current ageing fleet.Mr Reid said: “The group has a long and proud history of providing a lifeline route to theislands for more than a century and a dedicated team of experienced staff who understandthe unique nature of the islands and the needs of its residents and businesses.

“We are delighted to be announcing this major investment for the islands which will seevessels coming into service by March 2026.

"These new vessels will deliver a significant improvement in sea link services for the community and the visitor market.

"It provides certainty for islanders, island businesses and visitors, and the more than 200 staff that we employ on the islands and the mainland."

An impression of what the cafe of the new Scillonian IV could look like Credit: Isles of Scilly Steamship Group

The current Scillonian III carries over 110,000 passengers a year and operates an essential service for both islanders and tourists.

The new 72-metre Scillonian IV passenger ferry will carry 600 passengers - anincrease of 115 - over three decks with a coffee shop and retail area.

It will reduce journey times, improve comfort with anti-roll fins, carry more chilled and frozen goods, and improve access for passengers with reduced mobility.

Every year 15,000 tonnes of cargo are shipped to and from the Isles of Scilly.

The 45-metre cargo ship replacing the Gry Maritha will have an increased cargo capacity, including more space for chilled and frozen goods and a crane which can lift eight tonnes.

The new cargo vessel will have a lounge for a small number of passengers, and this will provide more travel options to islanders in winter.

The new inter-island launch will also allow for faster journey times between St Mary’s and the off-islands.

It will have a 50% increase in cargo capacity and a better fuel economy. The aluminium catamaran design will also improve access into tidal restricted off-island quays.

All three vessels will have fuel-efficient engines which will reduce emissions while providingenhanced service and improved resilience for the islands.

The vessels will be designed and built so that they can be retrofitted with improvements in green propulsion technology when mature and proven.

Ian Howard, chairman of Isles of Steamship Group, said: "When the current board took over in 2019, its first priority was to restore profitability and put the company in a position where it did not have to be reliant on handouts.

"We have done that. The next step is to bring in new ships which will enhance the service to the islands for passengers and for islanders’ freight needs. This is a special moment for the company and the islands."

Nathan Sikorski, director at Lombard, NatWest Group said: "Lombard’s support for the Isles of Scilly Steamship Group dates back many years having facilitated the acquisition of the original Gry Maritha. This exciting major investment will transform its fleet of vessels and secure the long-term future of the vital services it provides."

The Steamship Group is in discussions with several shipyards and next step will be to finalise procurement and build programmes.

'Serious concerns' from Isles of Scilly council

Although islanders may be pleased to hear the future of the fleet has been secured, some councillors expressed concerns that ticket prices could rise to pay off the loan and that the islands would no longer receive their Levelling Up grant.

Councillor Robert Francis, chairman of the council of the Isles of Scilly, said: “I understand the business decision made by the Steamship Group and their need to avoid further delays in replacing their vessels.

"However, I do have serious concerns over the level of borrowing the company is committing to.

"Fundamentally, the islands need the route to be economically sustainable for the operator – this is vital to ensure it is reliable for islanders and visitors and that it remains affordable in the long term.

"Obviously, we wouldn’t want a high level of borrowing to result in ticket prices that only work for those with high incomes and that further disadvantage residents, businesses and visitors.

"The government’s allocation of £48.4 million in Levelling Up funding was in recognition of the need to improve lifeline transport links for islanders and the difficulty the current operator would have in funding replacement vessels.

"We have requested a meeting with government to establish how this development affects their commitment to Levelling Up for our community."

The Department for Transport told ITV West Country that it was still working 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.