Shetland’s undersea tunnel network moved from aspiration to active planning on Tuesday, when councillors voted to explore funding options for a scheme estimated at £1.5bn that could replace the island chain’s ageing ferry fleet within eight years.
The vote, taken at a meeting in Lerwick, authorises the council to pursue a financing mix of private investment, public subsidy, borrowing, and road tolls. It follows a feasibility study produced by a consortium of Highways Magazine-reported engineers Stantec, COWI, Mott MacDonald, and ProVersa, which concluded there are no technical barriers to construction.
The same council had previously spent £990,000 on preparatory feasibility work and quietly halted procurement of a new ferry vessel, signalling which way the wind was blowing before Tuesday’s formal vote.
The Yell Tunnel: First Stage of the Shetland Undersea Tunnel Network
The programme would proceed in stages. First comes a tunnel from Shetland’s mainland to Yell; a second tunnel would then connect Yell to Unst, the UK’s most northerly inhabited island. Two further tunnels, to Whalsay and Bressay, could follow.
BBC News reported that the Yell tunnel alone is estimated at £402m. At 6.5 kilometres, it would run through 50 metres of rock below the seabed and carry tolls to fund ongoing maintenance. That cost estimate was developed after discussions with three international contractors, lending it credibility beyond a desk exercise.
On the financing of just this first stage, Financial Times reporting indicates the council could borrow approximately a quarter of the £402m, with Scottish and UK government capital grants and private finance covering the balance. The council is now developing a 30-year investment programme, per the Financial Times, setting out financing models that combine local funding, state support, and toll revenues.
There is one figure worth holding in mind alongside the £1.5bn total. The Telegraph has reported a separate figure of £2bn as the amount of taxpayer cash Shetland is seeking. The feasibility study and the council itself use £1.5bn as the project cost estimate; the higher number likely reflects a broader assessment of public funding required when private contributions are stripped out. Both figures are in circulation and neither should be dismissed.
Why Ferries Are No Longer the Answer
The council’s transport chairperson, Moraig Lyall, put it plainly. The current system runs 12 vessels to nine islands, carries around 750,000 passengers a year, and costs £23m annually. That bill has climbed sharply over the past decade, and some routes cannot meet demand for vehicle spaces.
‘The system we have that has served us well for decades is now no longer able to do that,’ Lyall said. ‘It doesn’t have the capacity and we’re struggling with other things, like the ability to crew the system adequately.’ Her conclusion: ‘The tunnel is the answer that we believe will help us solve these problems.’
Council chief executive Maggie Sandison was more measured but equally committed: pursuing a funding solution was, she said, ‘the right thing to do.’
The economic prize on offer is real. Unst hosts Saxavord, the UK’s only operational spaceport. The feasibility study argues that better connectivity would improve the facility’s ‘competitiveness, efficiency and scope for growth’ and attract aerospace spin-off industries. Boatbuilder Brydon Barclay of Fluggaboats, also on Unst, put it more directly: ‘It’s absolutely essential. At the moment, we’re running with a ferry service that just isn’t meeting the demand at all.’
Engineering firm Cowi, which advised the council, sets out a timeline of three years for preliminary work and five years for construction. Andy Sloan, Cowi’s executive vice president, described the engineering challenge as ‘relatively straightforward.’ The real question, he said, is whether Scotland takes ‘a short-term or long-term view.’ He called the mood around delivery ‘positive.’
Shetland’s model is the Faroe Islands, which has built more than 20 tunnels since the 1960s, including four subsea crossings. The former Faroese prime minister Aksel Johannesen told BBC News last year that investment in infrastructure had proven itself: ‘I think we have learned in the Faroe Islands that investment in infrastructure is a good investment.’
Shetland’s population of around 23,000 is banking on the same lesson. If the funding model holds together, the first tunnel to Yell could open within the decade. If it doesn’t, the ferry fleet will continue to age, and the islands will fall further behind. That is the binary the council has now chosen to confront.
