Loch Eriboll Harbour Development
Business Case
Jim Bennett
Shona Sinclair
Annie Tunnicliffe
Revised, 16th November 2014
Loch Eriboll Harbour Business Case
Page 1
Contents
1.0 Summary
2.0 Introduction
3.0 Background
3.1 An overview of Durness
3.2 The Development Group, its Structure and Leadership
3.3 History and Past Performance
4.0 Vision, Values and Objectives
5.0 Policy Landscape & Market Analysis
5.1 Policy Landscape
5.2 Market Analysis
5.2.1 Leisure Boating, Tour & Cruise Boats
5.2.2 Fishing
5.2.3 Pelamis
5.2.4 MoD & Service vessels
5.2.5 Cruise Ships
5.2.6 Ancillary Services
5.2.7 Comparator harbours
5.2.8 Café (& Micro-brewery/distillery)
5.2.9 Culture & Heritage
6.0 Loch Eriboll Harbour Plan
6.1 Background and Vision
6.2 Options Appraisal
6.3 Plan detail
6.4 Capital Costs
6.5 Financing the Plan
6.6 Implementation Mechanism
7.0 SWOT Analysis
8.0 Impacts
8.1 Economic
8.2 Social
8.3 Environmental
9.0 Financial Summary
10.0 Appendices
10.1 Bibliography
10.2 List of Consultees
10.3 Review of Previous Work
10.4 Policy Background on Rurality
10.5 Café & Micro-Brewery/Distillery
10.6 Pelamis Background Paper
10.7 Market Research Background Paper
10.8 Culture and Heritage Research Paper
10.9 Financial Forecasts
10.10 Impacts summary Paper
10.11 Architectural Plans
Loch Eriboll Harbour Business Case
Page 2
1.0 Summary of the Durness Development Group Business Plan for a Harbour at Loch Eriboll
Introduction & Background
This document sets out The Durness Development Group’s business case for the establishment of a
community owned harbour at Loch Eriboll. The plan builds on a number of years work by DDG and
previous input of specialists. The plan is to build a harbour which will provide an integrated approach
to social and economic development in the parish. The project will tackle the issues of isolation, depopulation, an aging demography and limited business base by establishing a harbour business
which will act as an anchor for the economic and social development of the area.
The harbour will
 accommodate fishing, aquaculture, leisure and supply craft
 provide associated shore based buildings will provide a café & facilities for
visiting leisure craft (and potentially a micro-brewery/distillery in the future)
 create nine local jobs, provide additional training opportunities to the local
community, and
 develop community owned and run assets that will deliver economic and social
benefits to the parish.
Vision, Values and Objectives
Vision
Ensuring a growing, happy and sustainable community in Durness Parish.
Aims
To provide economic
opportunity
To ensure social development
To protect and enhance the
environment
Objectives
To establish a harbour at Port
Chamuill, Loch Eriboll, which
will support fishing,
aquaculture, leisure and
supply craft.
To establish and maintain a
Heritage facility at the harbour
in order to maintain and
develop local cultural and
linguistic heritage
To integrate immediately adjacent
rock into the harbour construction
To establish a café (with
potentially a microdistillery/brewery as a
destination venue).
To establish and maintain a cafe
facility integrated into the
harbour provision.
To source and utilise local produce
for use in the café.
To provide toilet/shower
provision for leisure craft
users.
To provide opportunities for
vocational training for local
young people in order to stem
out-migration
To integrate green functioning
into construction undertaken
To create a minimum of nine
permanent, additional jobs
Develop a demographically
balanced community
safeguarding the future of the
primary & secondary schools
Act as a demonstration project
promoting renewables & energy
efficiency
To increase the asset base,
turnover and profitability of
DDG
Ensure that the harbour is equal
opportunities compliant
promoting equal access for all
Utilise local food in the café and
support a local food supply chain.
Loch Eriboll Harbour Business Case
Page 3
Market
In our Market Analysis section, we outline a business based on the following market segments:
Leisure Boating, Tour boats & Cruise Ships; Fishing & Aquaculture; MoD & Service vessels; Ancillary
Services and Culture & Heritage provision. In determining our market, we have:
 Conducted a structured survey with marine based businesses in Durness
 Conducted a structured survey with leisure boat owners in Durness
 Obtained detailed information from industry specialists
 Spoken with comparator harbours
 Discussed our plans and sough opinion from the Crown Estates Commission, HIE,
Highland Council and the Highlands Harbour Manager
 Completed research for the proposed cafe
 Reviewed relevant industry literature
Impacts
We outline the economic, social and environmental impacts of our proposals not least of which is
the creation of nine local jobs.
Financial Summary
Proposed Funding Plan for discussion with potential funders:
Item
Planning & Design
Project Management
Breakwater etc.
Breakwater/Cafe etc.
Breakwater etc.
Funder
HIE/Trusts
HIE/Trusts
HIE
Coastal Communities
Fund/BLF GCA
ERDF
Amount
£125000
£34192
£1000000
£1500000
£1500000
Revenue Calculations
Loch Eriboll Harbour Forecasts
Grants
Ending Income
Expenditure
Surplus/deficit
Total
2017
144,356
144,350
6
144,356
2018
4,023,600
4,022,762
838
4,023,600
2019
139,571
129,390
10,181
0
2020
142,985
139,483
3,502
0
2021
157,244
142,968
14,276
Totals
4,167,956
Funding is being sought to contribute towards the capital costs of the project and to fund the design
and project management of the build.
Loch Eriboll Harbour Business Case
Page 4
2.0 Introduction
This document sets out The Durness Development Group’s business case for the establishment
of a community owned harbour at Loch Eriboll. The plan is to build a harbour which will provide
an integrated approach to social and economic development in the parish. The project will tackle
the issues of isolation, de-population, an aging demography and poor business base by
establishing a harbour business which will act as an anchor for the economic and social
development of the area.
The plan is to provide a harbour which will accommodate fishing, aquaculture, leisure and supply
craft. Associated shore based buildings will provide leisure craft facilities, a café and potentially a
related micro-distillery/microbrewery. The development will create 9 local jobs (excluding those
potentially to be created by a micro-distillery/brewery), provide additional training opportunities
to the local community and develop a community owned and run assets that will deliver
economic and social benefits to the parish.
It was planned to build an adjacent pontoon system to act as a Forward Operating Base for the
wave energy company, Pelamis. However, Pelamis went into receivership coinciding with the
final draft of the initial business plan in 2014. With the demise of other wave energy companies
since, it was found to be unlikely that a major operator such as the former Pelamis would locate
a similar facility at Loch Eriboll.
Funding is being sought to contribute towards the capital costs of the project and to fund the
design and project management of the build.
3.0 Background
3.1 An overview of Durness
Durness lies two and a half hours north of Inverness on the North West edge of Scotland.
The parish of Durness comprises of a string of hamlets from Hope in the East to Gualin. Loch
Eriboll lies 3 miles east of Durness, adjacent to the hamlet of Laid. Durness sits in the North,
West and Central Sutherland Ward, which is a sparsely populated area, with 1.1 people per
hectare (pph) in 2001. This compares with a population density of 8.4pph in Highland, and
67.4pph in Scotland as a whole.
Durness Data Zone and Community Council map:
Loch Eriboll Harbour Business Case
Page 5

Durness and Loch Eriboll is a sparsely populated area, with an ageing and declining
population.
 The population predicted to decline by c. 7% over the next 20 years1.
 Compared to Scotland, the Durness datazone had a slightly higher proportion of
children (19% compared to 17%), and a significantly higher proportion of people of
pensionable age (26% compared to 20%), in 2011. The proportion of the population
in Durness who were of working age, however, was considerably lower than for
Scotland (55% as opposed to 63%).
 In 2011 there were 230 households in the Durness data zone. Just over 16% of these
were living in private rented accommodation, which is double the figure for Scotland
(8%). The social rented sector is less prevalent in Durness, at 17%, compared to
Scotland (29%). This pattern of tenure would suggest there may be more issues
around fuel poverty and poorer quality housing, as these tend to be more common
in the private rented sector.
 There are 17 children in local primary school. Kinlochbervie High School serves the
North West Sutherland corner: Scourie, Kinlochbervie and Durness.
 Employment in this area is very reliant on a land based and tourism economy, nearly
one fifth of the population working in food service and accommodation provision.
 The traditional fishing industry in Northern Scotland is in decline.
 Average earnings are lower than Highland averages and considerably lower than
national averages.
 Living costs are up to 40% higher than urban areas.
 The area suffers from a lack of equity in public service provision
 The budgets that households need to achieve a minimum acceptable living standard
in remote rural Scotland are typically 10-40 per cent higher than elsewhere in the UK.2
 Loch Eriboll is an important resource for naval training exercises, particularly for
weather avoidance and aspects of amphibious and specialist training activity.
Additional Challenges include
 The A838, the main arterial route through the area is single track carriageway with
passing places for 15 miles to the East and 20 miles to the West. The route flows well
most of the time with relatively low traffic volumes but can be slow during peak
season.
 Poor public transport links.
 Challenging sailing conditions around the north coast.
3.2 The Development Group, its Structure and Leadership
The Durness Development Group was founded in 2001. It is a charitable company limited by Guarantee with a membership open to all residents. DDG has eight
Directors:




1
2
Mike Fitch (Secretary): Remote Editor
Sheila Frazer (Treasurer): Formally local Business woman
Sarah Fuller (Chair): MSC in Environmental Resource Management and
BA Hons in History.
Jacqueline Hird: Local Business Woman
Highland Coastal Development Strategy, Highland Council, May 2010
A Minimum Income Standard for Remote Rural Scotland, HIE
Loch Eriboll Harbour Business Case
Page 6




Andrew Marsham: Estate factor, former fish farmer and hatchery manager.
Iain Morrison: Former off shore worker and fish farmer
Dawn McKenzie: Runs youth club parents committee and school PTA
Martina Macleod: Local Ceramics Artist
DDG is the community anchor organisation for Durness, employing four staff including
Development Officers and Youth Workers. Community Anchor Organisations were first
defined in the UK government report, Firm Foundations, published by the Home Office
in 2004. It stated:
"We are calling them `community anchor organisations` because of the solid foundation
they give to a wide variety of self-help and capacity building activities in local
communities and because of their roots within their communities."
In 2009, Scottish Government and COSLA jointly launched the Scottish Community
Empowerment Action Plan. This plan endorsed the concept of community anchor as the
key feature of when genuine community empowerment takes place. The Durness
Development Group is such an organisation and has a proven record of achievement in:









Over 13 years of continual youth engagement and projects
Calor Community of the Year 2003 (Youth Category)
Currently employing three part time Community Youth Workers and two
part time development workers
Building purchased at £20000, now valued a £80000 and will soon generate a rental income as a domestic residence
Ceannabeinne Township Project: development of a local history trail
Loch Croispol Schoolhouse: £68000 achieved to develop this local historic building
Community Right to Buy Registration for the Tourist Information building and Cape Wrath
Establishment and operation of a cycle hub
Provision of public internet access and campaigns on IT and new generation broadband.
3.3 History and Past Performance
DDG’s previous financial performance is as follows:
Year
2009
2010
2011
2012
2013
2014
Income
£38,560.00
£60,821.00
£113,591.00
£51,475.00
£62,365.00
£78,894.00
Expenditure
£32,079.00
£62,607.00
£115,674.00
£68,408.00
£65,320.00
£75,279.00
DDG has a strong history of enterprise, asset acquisition and management of complex grant
and loan income. This includes:
 Ownership of an £80000 asset, soon to be providing a regular rental income
Loch Eriboll Harbour Business Case
Page 7






The Quaker Housing Trust provided loan funding for affordable housing provision.
Working with Highlands & Islands Enterprise which funds development officer posts
Historic Scotland, Highland Legacy Fund and the Heritage Lottery Fund grant funding
Scottish & Southern Electric Community Grant Fund
Big Lottery Fund
Significant local fundraising
4.0 Vision, Values and Objectives
In order to meet the challenges of ageing, out-migration, de-population and economic
stagnation, DDG has developed a comprehensive vision with aims and objectives:
Vision
Ensuring a growing, happy and sustainable community in Durness Parish.
Aims
To provide economic
opportunity
To ensure social
development
To protect and enhance the
environment
Objectives
To establish a harbour
at Port Chamuill, Loch
Eriboll, which will
support fishing,
aquaculture, leisure and
supply craft.
To establish and maintain
a Heritage facility at the
harbour in order to
maintain and develop
local cultural and linguistic
heritage
To integrate immediately
adjacent rock into the
harbour construction
To establish a café (with
potentially a microdistillery/brewery as a
destination venue).
To establish and maintain
a cafe facility integrated
into the harbour
provision.
To source and utilise local
produce for use in the café.
To provide
toilet/shower provision
for leisure craft users.
To provide opportunities
for vocational training for
local young people in
order to stem outmigration
To integrate green
functioning into
construction undertaken
To create 9 permanent,
additional jobs
Develop a
demographically balanced
community safeguarding
the future of the primary
& secondary schools
Act as a demonstration
project promoting
renewables & energy
efficiency
Loch Eriboll Harbour Business Case
Page 8
To increase the asset
base, turnover and
profitability of DDG
Ensure that the harbour is
equal opportunities
compliant promoting
equal access for all
Utilise local food in the café
and support a local food
supply chain.
5.0 Policy Landscape and Market
5.1 Policy Landscape
The policy framework into which the DDG’s plans fit can be summarised as follows.
The European Union Structural Funds
The Highlands and Islands European Regional Development Fund programme sums up the
approach of DDG well:
“…generating sustainable local communities which are diverse, adaptable and resilient;
sustainable enterprises with well-developed skills and markets; sustainable communities with
confidence capability and social and economic vitality; and sustainable use of natural
resources including the regions primary products, its natural environment and its cultural
assets.”
Key issues in the ERDF approach include:

Economic and social development should be pursued in tandem, as both
contribute equally to making communities sustainable by reversing outmigration.
 Issues to be combatted include long-term population loss, low incomes, limited employment opportunities, dependency on a narrow and often seasonal range of economic activities, poor infrastructure, poor transport, access
and adverse geography.
 Proposals supported include Enterprise-related facilities including ecommerce facilities and business development units to support local enterprises.
http://www.hipp.org.uk/files/downloads/download529.pdf
The Scottish Government Economic Strategy (GES)
GES, published in September 2011, has five strategic priorities aimed at meeting the needs
of people in Scotland. The Trust’s proposals will assist in implementing these priorities,
which are:
 Supportive Business Environment
 Transition to a Low Carbon Economy
 Learning, Skills and Well-being
 Infrastructure, Development and Place
 Effective Government
 Equity
DDG’s proposed work will support the five strategic objectives in the Scottish Government
Economic Strategy, which are to create: a wealthier and fairer, smarter, healthier, safer,
stronger and greener country.
http://www.scotland.gov.uk/Publications/2011/09/13091128/0
Loch Eriboll Harbour Business Case
Page 9
National Volunteering Strategy for Scotland
The Strategy promotes a number of key aims including an increase in volunteering
opportunities for young people; dismantling the barriers to volunteering and closing the
opportunity gap; and improving the overall volunteering experience. DDG is supported by a
strong and committed volunteer base and the organisation aims to expand the range of
volunteering opportunities available.
www.scotland.gov.uk/Publications/2004/05/19348/36993
The Gaelic Language
The Scottish Government recognises that Gaelic is an integral part of Scotland's heritage, national identity and current cultural life and has put in place the necessary structures and initiatives and to ensure that Gaelic has a sustainable future in Scotland. The harbour will have
full bi-lingual signage and incorporate the Gaelic language into its work.
http://www.scotland.gov.uk/Topics/ArtsCultureSport/arts/GaelicLanguage
Social Enterprise
The Scottish Social Enterprise Strategy (2007) and the Enterprising Third Sector Action Plan
(2008) provide support for the third sector. The Government strategy is one of raising the
profile and demonstrating the value of social enterprise, opening up markets to social
enterprise, increasing the range of finance available to social enterprises and developing the
trading capacity of social enterprises. The DDG proposal chimes exactly with Government
social enterprise policy.
http://www.scotland.gov.uk/Publications/2008/06/19085003/0
Sustainable Development
Sustainable development is integral to the Scottish Government's overall purpose - to focus
government and public services on creating a more successful country, with opportunities
for all of Scotland to flourish, through increasing sustainable economic growth. The DDG
proposal has the three legs of the sustainable development stool integrated to its core –
economic, social and environmental.
http://www.scotland.gov.uk/Publications/2011/09/13091128/0
Highland Coastal Strategy
The Highland Council coastal strategy recognised that:
“The north coast has a distinctive character but it is the least accessible of Highland’s three
coasts from the main centres of population in the south. It has experienced higher than average levels of net out-migration in recent decades and the main planning challenge here is to
sustain the viability of key settlements and encourage diversification in the local economy”.
The strategy particularly encourages the development of facilities which can extend the
tourist season, the marine leisure industry and the opportunities developing in the renewables sector. It specifically recognised the potential of a slipway development at Loch Eriboll
and the potential strengthening of the shellfish industry in the loch and its integration with
other sectors.
http://www.highland.gov.uk/downloads/file/1062/highland_coastal_development_strategy
In summary, EU, UK, local and national government, and their key agencies, have strategic
objectives focused on helping rural and remote communities achieve equitable access to
amenities regarded as normal elsewhere, and focused on helping build capability and sustainable communities. DDG’s plans for the community owned harbour fall squarely into this
policy context.
Loch Eriboll Harbour Business Case
Page 10
5.2 Market Analysis
5.2.1 Leisure Boating
Scotland sells itself as one of the top sailing destinations in the world. This is as a
result of a combination of ‘open sea’ conditions linked to the large number of
islands, bays and anchorages, giving sailors the opportunity to test their abilities in
varied conditions with the option to seek shelter at any time. The market has
continuously developed over the last 20 years:










The roads infrastructure into Scotland from England has improved significantly enabling quicker access to the Scottish market
The advent of low cost airlines has resulted in boat owners from all over the
UK now being attracted to berth their boats in Scotland. This means that
you are just as likely to see someone from the south of England berthing
their boat in Scotland as local Scots.
Since 1994 the long term marketing of sailing in Scotland has improved the
awareness of the product and increased the number of English and overseas
boats visiting the Country.
The large UK players such as Sunsail and Neilson don’t currently offer a Scottish product, though evidence shows the demand is increasing.
There are several small sailing operators in Scotland whose sailing itineraries
would fit with Loch Eriboll, if the harbour facilities were suitable (e.g. Classic
Sailing, Western Isles Sailing).
There is also the opportunity to become a “base” for a sailing company, but
the remote location would require a very niche client.
The National Survey of Marine Recreation and Tourism may well have an
impact, to be published until November 2015.
Berthing rates tend to be considerably cheaper than similar facilities on the
south coast.
There has been a marked increase in the number of pontoon berths being
developed throughout Scotland but particularly in the Highlands and the
Northern Isles.
As boat owners get more familiar with Scotland as a result of repeat visits,
the demand for new destinations has increased, which has led in many cases
to the current increase in new pontoon berths in more remote areas.
Report ‘Sailing in the Clyde Estuary’: A Market Assessment, Economic Impact Study and Action Plan –
McKenzie Wilson Partnership.
This increased business has and will be absorbed efficiently as new pontoon facilities
have increased throughout Scotland. Many boats based in the Clyde and the West
Highlands tend to graduate their experiences annually by sailing further west to the
Hebrides and north to the Orkney and Shetland Islands as their crews seek new challenges and different itineraries.
This growing trend tested the availability of pontoon berths in many parts of
Scotland. Previously, the lack of pontoons and moorings in vast regions such as the
far North West Highlands may well have inhibited the movement of boats north to
the rapidly developing new cruising areas around Orkney and Shetland. It is
important for everyone to remember that cruising boats prefer to transit between
marinas and harbours that are not too far apart. Six to eight hours would normally
be the maximum time that a skipper would want to make passage and in many cases
a shorter period of four to six hours sailing would be more preferable. Loch Eriboll is
Loch Eriboll Harbour Business Case
Page 11
around 30 miles from Kinlochbervie. So with good sailing conditions and a
favourable tide, a transit of around 6 – 8 hours would be possible.
Loch Eriboll’s Strategic Location:
The most popular sailing areas in Scotland are on the West Coast and in particular in
the West Highlands. However, the marina facilities in Orkney have attracted much
interest from sailors throughout the UK and Northern Europe. The increased activity
from Northern Europe is also creating greater demand for safe havens on the East
Coast and in the North West Highlands.
In the north, the Caledonian Canal has been a major factor in attracting new
European boats to visit the West Highlands, the Western Isles and Orkney and
Shetland before returning to their homeports. Last year 1,305 boats transited the
Caledonian Canal (ref: Scottish Canals office manager, Inverness). Staff at Inverness
advised that this figure is fairly static from year to year but advised that revenue is
up as many of the transit boats are longer and wider.
The geographic location of Loch Eriboll is very important and this will affect its
potential in relation to neighbouring safe havens and its role with the wider Scottish
marine leisure industry. New pontoons located in more rural settings cannot be
considered in isolation as the quality, number and location of other similar facilities
within reasonable cruising distance of the marina invariably affect their success.
Recommendations in this report are based on these factors and also set out to
qualify the impact that Loch Eriboll could make on the sailing sector in the northwest
Highlands and the influence that these new facilities could have in attracting new
waterborne visitors to the area. It should however be noted that if the quality and
range of the facilities at the new marina do not meet the expectations of the
customer, Loch Eriboll will not attract the affluent sailing and cruising market. It is
therefore important that any new facilities are pitched correctly at the market place
and not compromised by a lack of finance or local factors that may inhibit the
provision and operations of these services.
The availability of water depth at Loch Eriboll meets the requirements of modern
deep keelboats and the position of the safe haven will help sailors who wish to
cruise around between Stornoway, Lochinver, Kinlochbervie and Orkney will
enhance the cruising potential of the North West Highlands and help to create a
‘necklace’ of better facilities linking the West Coast with the Northern Isles, the East
Coast and the Caledonian Canal. Loch Eriboll is strategically placed as it provides an
additional alternate for vessels transiting between Orkney, the Western Isles and the
West Highlands.
Visiting Boats in the North Highlands:
Research into the movement of leisure craft tends to vary, however, we are able to
compare some basic figures from 2004 with approximate numbers from 2013 based
on interviews with harbour masters.
Location
Visiting Boats 2004
Ullapool
Lochinver
Numbers very low
100
Loch Eriboll Harbour Business Case
Visiting Boats 2013
145
163
Page 12
Stornoway
Kinlochbervie
Kirkwall
100
50
478
750
95
751
It should be noted that these figures relate to visiting boats and not visiting boat
nights. In most cases boats will stay for more than one night and in the case of
Highland Council owned harbours, such as Lochinver and Kinlochbervie, they only
sell a 48 hour ticket.
The growth of visiting boats to Orkney and Western Isles in particular has been very
strong in the last ten years. The installation of pontoons at Eriboll would give more
confidence for sailors to make Orkney-Western Isles journeys.
Loch Eriboll Market Forecast:
The harbour will:
 Standardise its pricing with Highland Harbours
 Attract a mix of seasonal & visitor berth holders
 Attract a mix of local and visitor craft
 Base forecasts on a conservative baseline with conservative growth.
We have based our assumptions in the financial forecast for the leisure market on
the following:
 Telephone & face to face survey of immediately local leisure boat owners
utilising Highland Council pricing policies
 Discussions with specialists in the Scottish marine leisure market (Mckenzie
Wilson & Badachro Marine)
 Discussions with Crown Estates Commission staff (Paul Bancks & Joan
McGrogan)
 Interviews with harbour masters at 6 comparator harbours
 Interview with the Highland Council Harbour Manager
 A post initial research review by “fresh eyes” (appendix 3).
Our assumptions are initially low, with a conservative build in numbers over 5 years.
5.2.2 Business Users
The following groups of people and businesses have been identified as potential
users of the harbour facility. This market information is based on:
 face to face and phone interviews with all relevant existing businesses (incl.
fishing, boat trips, local transport, boat builder)
 face to face interviews with all willing residents near proposed site
 A review of earlier reports on the harbour development.
During the interviews we discussed the potential pricing as well as services required
at the harbour (berthage, wharfage, slipway etc.). Details of the survey
questionnaire can be found in the appendix.
Creel Workers
There are currently 1 full time and 2 part time people working on creel boats in the
area. The harbour development would provide sheltered boat facilities and easy
access to the water, easier landing of catch straight from the boat and loading and
Loch Eriboll Harbour Business Case
Page 13
offloading in comparative ease.
Anecdotal evidence suggests that employment could increase to 5-6 people, based
on the current village demographics. This potential to increase the volume of
production could increase in the viability of the jobs for example, by leading to
product uplifts being made locally as opposed to workers having to take their
produce to a central pick up point.
Fish Farms e.g. Scottish Sea Farms
There is currently one major fish farm on the Loch which is owned and managed by
Scottish Sea Farms. It currently employs 6 staff. The fish farm has operated for
approximately 30 years.
However, they have indicated that they could have a requirement to use the
harbour depending on how their fish farm develops in the future. Their basic
requirement would be a slipway that is accessible at all states of the tide, but also a
pier that is wide enough for lorries to drive down so that feed bags and mooring
components can be unloaded directly onto the workboat. Currently all harvest fish
are shipped away live for killing and processing in Shetland. If the harbour
development was big enough then a mobile harvest station could be positioned on
the pier and the fish sent down to their factory in Oban for processing.
If the pier was suitable for their operations then there could be a possibility for 1500
tonnes to be harvested during a 6 month period every 2 years. However, for this
option to be considered there would need to be a minimum draft of 5m at SLW over
the length of the harvest vessel (40m) The pier would also need to be wide enough
to allow the fish tankers to reverse down it.
Careful harbour management would be required to ensure that the conflicts
between “industrial” and “leisure” uses of the harbour are minimised. Good models
of this approach can be seen in Highland Council’s NW Highlands harbours.
Mussels e.g. Loch Laxford Seafood Ltd
Loch Laxford Seafood Ltd (LLSF) is a leading member of the Scottish Shellfish
Marketing Group, which supplies all retailers in the UK. They have a considerable
interest in the development of the harbour.
Loch Eriboll is an excellent loch for growing mussels once they are established, as it
has high nutrient levels and good water currents. LLSF acquired two mussel farms
from Caspian Shellfish Ltd in 2009, when that company ceased operating in Loch
Eriboll. The leases were operated during 2009/10 in order to harvest the growing
crop which was also acquired. However, the difficulties of obtaining mussel seed
settlement in Eriboll, and operating a mussel farm vessel in the loch without a
harbour or sheltered anchorage, resulted in cessation of mussel production . Since
then the leases have been used mainly for conducting trials in order to try and
establish a reliable culture system for the loch. In 2013, LLSF applied for and
obtained a seed collecting site in Loch Glencoul to supply those other leases it owns,
such as the sites in Eriboll, where there is difficulty obtaining a reliable seed
settlement. Now that the seed supply issue has been overcome, the major difficulty
in establishing a reliable mussel operation in Eriboll is the absence of a pier and
sheltered mooring.
Loch Eriboll Harbour Business Case
Page 14
One of the risks to mussel farming is the presence of naturally occurring biotoxins in
the water during the summer months, which can close harvesting for health
reasons. During 2013 for example, all the lochs in the northwest and in Shetland –
which together comprise the bulk of farm production – were closed for a period of
over two months. This starved the SSMG processing factory in Bellshill of much of its
regular supply. In mid-August, when the west coast sites in Lochs Inchard, Laxford,
Glendhu, and the Shetland farms were all closed due to the presence of the DSP
biotoxin, a sample was taken from Loch Eriboll which showed that it was clear. Had
the Eriboll sites been operating, a major difficulty would have been avoided, and a
significant loss of production and factory revenue avoided.
The leases that LLSF own are easily capable of producing 150 tons of mussels per
year of approximate farm gate value of £135k. This level of production will support
three FTEs for the mussel operation itself. It will also contribute to the local
economy through purchasing of services and supplies – e.g. boat and machinery
maintenance and repair, fuel, and most significantly, transport of production to the
SSMG processing factory.
Loch Eriboll has the capacity to produce 500-600 tons of mussels per year. LLSF
currently hold 3 licenses and there are 6, licenses held in total for the Loch currently.
LLSF envisage producing an additional 50 tons per annum, in total, 200 tons.




Production could be more than the existing 2 LLS leases because other mussel licence holders may ask LLSF to operate the lease under contract (or may
wish to pass the lease on). This would save huge set up and learning curve
for other licence holders
Therefore revised figures could be 200 tonnes for LLSF, (4 jobs). £950 per
ton (farm gate price) so potential income £190k for LLSF
The boat would be stationed at Eriboll harbour for 6 months of the year
Demand for mussels is strong – current businesses cannot meet all demand.
Previously, several other mussel farms, leased to local businesses were forced to
close because of safety and logistical issues between the shore and the loch. A
harbour facility would remove these issues and the indication is that at least one
other business would be seeking to resume operation with an anticipated 70
tonnes harvest per annum.
Oyster Farm
There is not currently any oyster farming in Loch Eriboll. There is one interested
party who is currently in the process of applying for planning permission for an
oyster grow-out farm in Kyle of Durness. However, Loch Eriboll is considered to
be a good nursery for oysters and good for the “cleaning” phase. An operation
in the Loch would need to be supported with a land based shed for cleaning
near good quality water.
5.2.3 Pelamis
Pelamis went into administration in November 2014 and closed fully in December
2014. Pelamis was the Edinburgh based inventor, designer, manufacturer and
operator of the Pelamis wave energy machine. Pelamis Wave Power was privately
Loch Eriboll Harbour Business Case
Page 15
owned and had raised some £45m to fund the development of Pelamis technology
from a variety of backers, in addition to approximately £19 million revenue from
sales and services. as well as a degree of government funding.
In 2010 Pelamis Wave Power was successful in securing a seabed lease option from
The Crown Estate at Farr Point, as part of the world’s first leasing round for marine
energy projects. The wave energy license has now been transferred to HIE which has
established a public innovation company “Wave Energy Scotland”.
There are no current development plans for Pelamis or other wave energy projects
in the area. Since the demise of Pelamis, Aquamarine Power has called in administrators to manage the business and to seek a sale or further investment. The company had already downsized operations during 2014.
The Pelamis system did not require it to come out of the water for servicing,
therefore Loch Eriboll was a sufficient base, but most other devices would require
larger on-land servicing facilities for which Loch Eriboll is not suitable.
A replacement for Pelamis at Loch Eriboll is unlikely.
5.2.4 MoD & Supply Boats
MoD
Cape Wrath is a significant military installation adjacent to Durness. Loch Eriboll is an
important resource for naval training exercises, particularly for weather avoidance
and aspects of amphibious and specialist training activity. This forms part of
exercises around the North West coast which take place for three two-week periods
per year. Loch Eriboll has for many years been used as a deep water anchorage by
the Royal Navy.
We directly discussed with MoD staff at Cape Wrath and their Property Advisor their
potential usage of the harbour. We discussed prices and services required. They
indicated that they would take two annual berth tickets for rigid inflatables with an
expectation of additional usage related to their annual military exercises.
Supply Boats
We talked to GulfMark, a major support vessel supplier in the North Sea. They
indicated that whilst Orkney and East Coast harbours would be preferential, there
would be a role for a small number of supply vessels to be stationed at Loch Eriboll,
given the potential developments in the oil and renewables industry west of Orkney
and in the Pentland Firth.
There are a couple different types of vessels within the OSV market that would
potentially make use of a harbour at Loch Eriboll. GulfMark own and operate 31
OSVs from the North Sea. They specialise in Platform Supply Vessels (PSV) and
Anchor Handling Tug Supply vessels (AHTS). These are two of the most common
vessel types, although within the OSV market you also have tug vessels which are
much smaller and Dive Support Vessels (DSV) which can be much larger which far
deeper drafts.
Loch Eriboll Harbour Business Case
Page 16
We have anticipated that the harbour would build to 2 supply vessels by Year 4 of its
operations. Again, a conservative baseline has been utilised, particularly since the
international downturn in oil markets.
5.2.5 Cruise Ships
To date there has been no adequate facility to enable larger cruise ships to berth in
Loch Eriboll. Although Loch Eriboll is a deep water sea loch it is unlikely that it will
attract cruise ships to berth there regularly. Stornoway however had 40 cruise ships
last year and Orkney attracts around 80 vessels annually.
The difficulty currently in Loch Eriboll includes the following: 



No alongside berth resulting in any visiting ships having to anchor and use
the ship’s tenders to get passengers ashore, which is a time consuming and
costly exercise for ships
A lack of quality visitor attractions within a two hour maximum radius of the
anchorage
Access to luxury coaches for shore excursions resulting in vehicles having to
be brought to Loch Eriboll from other parts of the Highlands
Single track roads, which limit the speed and movement of coaches thereby
reducing further the travel range to attractions
It is therefore unlikely that large cruise ships would choose to anchor in Loch Eriboll
when they can get alongside a harbour berth at Stornoway or Orkney. However,
there are a small number of ‘explorer’ ships, which may be interested in visiting a
more remote area. We identified the Hebridean Princess as one such ship and,
based on our discussions with them, have built in an annual visit from them building
to two visits later on.
The Hebridean Princess is currently active in this marketplace and usually visits Loch
Eriboll as an overnight stop over by dropping anchor, approximately twice a year.
They have indicated that they would be very encouraged by a development in Loch
Eriboll and have considered this to be an unmet opportunity for their clients in
previous years and have been seeking a suitable landing during this time.
The main requirements of these companies will be for an opportunity to drop
anchor and to be able to transfer passengers in small boats to the shore. They are
not seeking to bring the vessel alongside a harbour and they avoid slipways and
harbours due to impact of the tides. Transport access to the road will be necessary
to enable the passengers to be collected by a coach and taken to visitor sites, for
example, they may land for 3-4 hours for passengers to visit Smoo Cave & Durness
Golf Course. Other than that, their requirements are relatively minimal. In the case
of the Hebridean Princess, they will dine on board and therefore local facilities will
not be key.
Smaller boats exploring north, for example Northern Lights Charters, who currently
visit Loch Eriboll, indicated that they are very cost dependant and cannot meet the
fees of the larger harbours. If these were affordable, they would be keen to take on
water and recycling facilities would be excellent. However, they can only take on
water if they are berthed.
5.2.6
Ancillary Services
Loch Eriboll Harbour Business Case
Page 17
Ancillary services include:
 Slipway
 Fuel
 Ice
 Toilets/showers
 Seasonal Boat storage
Slipway
Numbers of anticipated usage are based on:
 Our business survey
 Our local leisure craft users survey
 Tourist boat numbers identified by local businesses
We have built the numbers annually on a conservative basis influenced also by the
opinions of the marine leisure specialists whom we consulted. Pricing was based on
the Highland Council annual charge and additionally, a weekly visitor ticket price.
Fuel
Fuel consumption was based on:
 Interviews with the Highland Council Harbour Manager
 Interviews with local business and leisure boat owners.
 Discussions with Pelamis fuel need related to their Multi Cat which are now
redundan.
We have anticipated a £0.02 per litre profit based on the advice of the Highland
Council Harbour Manager.
Ice
Ice requirements were based on:
 Indications of need from Loch Laxford Seafood
 Highland Council pricing
 Profitability ratios from the ice machine manufacturers
Toilets and Shower Needs
We have based the shower income on very conservative estimates:
 Forecasts of external leisure craft berthing x two people per day
 Pricing at £1 per use
Seasonal Boat Storage
Based on:
 Local business survey
 Local leisure boat survey
 Marine leisure specialist information
 Pricing based on Highland Council rates.
Loch Eriboll Harbour Business Case
Page 18
5.2.7 Comparator Harbours
We discussed the model operations of Highland harbours with: Stornoway Pier &
Harbour Commission (Harbour Trust), Lochinver Harbour, Kinlochbervie Harbour
Orkney Marinas, Ullapool Harbour and Scottish Canals (Inverness). Additionally, we
talked with the Highland Council Harbour Manager. Areas covered included:
 Costing and Pricing
 Leisure craft usage and forecasts
 Fishing and support vessels
 Ancillary services
 Visitor spend levels
Our forecasts, costing and pricing have all been influenced by these discussions.
5.2.8 Café
See attached appendix 5.1 for detail.
Market Research
To enable a business model to be developed for the café, we carried out market
research into the potential demand and current service offering in the area for food
and beverage facilities.
Competition:
Market research on the café facilities in the neighbouring areas has been carried out
and approximately six businesses were identified, these were:
 Cocoa Mountain Café
 White Heather Tearoom
 Smoo Cave Hotel
 Sango Sands Oasis Restaurant and Bar
Examples on A836:
 Betty Hill Cafe
 Weavers Café, Tongue
They offer a range of food and beverages suggesting an average spend of approximately £5.00 per person. There are a limited range of facilities and several opening
in the summer season only.
Visitor Traffic:
To provide an indication of the volume of traffic in the area, we examined the Road
level Annual Average Daily Flow (AADF) estimates. These indicate an average of between 429 and 526 motor vehicles passing on average per day. We have based our
customer numbers on an average 3% of the average of the road traffic flow statistics.
Geographical Advantages
 On the North Coast 500 route
 Sited within the Geopark
 Proximity to a SSSI
Proposed CHARACTERISTICS:
 View
Loch Eriboll Harbour Business Case
Page 19
None of the cafes in the area take full advantage of the “view”. A café with lots of
natural light and a view of the Durness coastline or scenery would be a unique sales
point.
 Local Produce
None of the café menus in the area reflected their location. A café with a simple
specials board with local produce e.g. mussels, would be a draw to tourist and locals.
 Theme
None of the cafes in the area reflect the local landscape and culture. A café that
combined a Scottish and coastal themes would attract tourists.
 Gift Offering
There are good quality, reasonably priced, locally made craft gifts that could be sold
in the café at a reasonable margin.
 Information/Heritage
The tourist information office in Durness focuses on a huge area of the Highlands. It
would be beneficial to have an offering that purely focused on Durness, current and
heritage related (see next section).
 Outdoor Seating
Simple pub benches on a patio.
 Excellent Customer Service
Friendliness and efficiency. Some customers will be short of time if they have arrived
on a coach trip. Processes should be in place to deal with orders quickly and efficiently.
Proposed Café Income/Expenditure
INCOME
%age of customers
Spend
Buy a coffee
30%
£2.00
Buy a coffee and cake
Buy a drink and food
Buy a gift
20%
50%
5%
£3.50
£8.00
£4.00
EXPENDITURE
Food and beverage
Staffing Costs
April - Sept 9 - 5
(7 days a week)
Oct-Mar 10 – 2
(5 days a week)
Gifts
Overheads
Total income PA
40% cost
£8 per hour plus 20% on cost. £9.60
per hour.
8 hrs per day.
£307.20 per day
3 Staff
(183 days per
year)
4 hours per
£76.80
day. 2 Staff
(185 days per
year)
50% cost
10% of
turnover
£10,950.00
£12,775.00
£73,000.00
£3,650.00
£100,375.00
Annual Total
£38,690.00
£42,163.20
£7,104.00
£1,825.00
£10,037.50
£99,819.70
The café will operate as a social enterprise and as such will be aiming to provide
both a social and commercial return to the organisation. Based on the market
research above, the estimated number of customers is conservative. It will have the
Loch Eriboll Harbour Business Case
Page 20
potential to provide important employability opportunities for those entering the
workplace, with work placements being provided and volunteer roles being
available. We have not anticipated that the café will be a major net contributor to
finances, however, it will “wash its face”.
Café’s Potential Expansion: Micro Brewery/Distillery
Although there are an increasing number of micro-breweries/distilleries and real ale
is reaching unprecedented levels, there does not seem to be a deceleration in the
market place. Small, unique, local and lifestyle projects are en vogue and in the
Highlands: Rock Rose Gin, John O’Groats Brewery and the rebirth of Wolfsburn
Distillery . They are also benefitting from Scotland’s increased focus on food and
drink, becoming internationally renowned for the quality and variety of its food and
drink.
Drinkers want to experience the location in the bottle. This potential lends itself to
Durness. The marketing message can paint pictures of the coastline, landscape and
uniqueness. There is potential to create a product to piggyback on the North Coast
500 marketing initiative. Issues to bear in mind:
 Branding is key: all micro-breweries/distilleries have a brand story. Product
portrayed as a luxury item that is worth a premium price.
 All follow the trend of independent and boutique, rather than mass market
products.
 Online presence is mainly high quality websites.
 Presence at events, creating your own events.
 All have good social media presence, Facebook as a minimum, and some have
twitter. All have email signup.
 Tours are reasonably common, but “visitor centres” are less common for this
size of business. Many state they will build a visitors centre as a second phase of
development.
 Trend for locally sourced and produced food and beer has moved across to
spirits.
 Applications for distillery licenses in the UK have trebled over the last year (from
20 to 65 in 2014-15)
Loch Eriboll Harbour Business Case
Page 21

Visitors spent almost £50m on distillery tours and in the shops and cafes, almost
double the spend in 2010.
An opportunity exists to develop a café with heritage offering linked to its own
micro-brewery/distillery in Durness. A unique offering aimed at increasing visitor
spend and stopping time. Appendix 5.1 details financing and legal options for the
proposal.
5.2.9 Culture & Heritage
A full outline of the Heritage aspect of this plan can be found in the appendices. We
carried out a desk based review, interviews and focus groups with local people and
mapped current heritage offerings.
Research and site visits have shown that Durness and surrounding area is rich in
local heritage from Geology Bronze Age and Iron Age structures to Norse and early
Gaelic influences, Medieval Christianisation to Clearances, to more recent marine
history on Loch Eriboll to name a few. The visitor to Durness finds comprehensive
outdoor display panels, a Tourist Information Centre with ample information,
brochures and books about the area and places to visit such as Smoo Cave or the
John Lennon Memorial Garden. There is neither a shortage of information, nor of
places to visit for this small, dispersed community of 400 in the most north-westerly
corner of mainland Britain. The information available varies from professional
display panels to home-made signs and brochures.
In the current financial climate heritage offerings have little direct commercial
benefit but are a valuable source for local pride, activity, tourism. They inform,
engage and enhance the visitor’s experience to the area. Based on our research, the
planned heritage structure should be envisaged as a multifunctional space (office,
hospitality, information centre, meeting space, harbour facilities, training space,
community facility etc.). Heritage offerings can be integrated easily into this
structure and its environs. They can be made available by means of display (panel,
objects, interactive, digital) or activity. Walking trails, places of interest or activities
out with the structure can be advertised to enhance the offer.
6.0 Loch Erribol Harbour Plan
6.1 Background and Vision
As we have previously described, Durness is an isolated, fragile, community with limited
services. The population is aging and declining in numbers. The harbour project was
developed by community members to assist in reversing this situation.
DDG is planning to build a new harbour and associated services which will integrate a
social, economic and cultural approach towards regeneration. Through this project, the
DDG aims to:
 Provide a community owned and run assets
 Create a financially self-sustaining businesses for the regeneration of the
economy – creating high grade employment opportunities, training and
volunteering opportunities
Loch Eriboll Harbour Business Case
Page 22

Develop a stronger, more cohesive community with an improved economic, environmental and social future
By embarking on these plans, DDG aims to:
 Halt population decline
 Create a younger demographic
 Reverse outmigration, and
 Build a socially inclusive and economically viable community based on
environmental best practice.
6.2 Plan detail
Situation
Loch Eriboll is the only deep-water sea loch on the north coast of Scotland. It is 15.5 km long
with a surface area at high water of 32.4 sq.km. Its average depth at low water is 26m and
its maximum is 68m. The Loch can be distinguished from most other sea lochs in the Highland area by its northern aspect and its alignment in a NNE/SSW direction and has, for many
years, been used as a deep water anchorage by the Royal Navy.
There is significant salmon and mussel farming interests at Loch Eriboll which provide important employment opportunities. There is potential to increase this and in the future. Expansion is limited by the current harbour facilities on the loch, constraining potential for
growth. At the same time tourism in the Durness area is enjoying a period of growth, and
there is considerable potential in developing new tourism services that offer greater financial returns per visitor than are possible simply through accommodation provision.
Proposed Development
A number of possible sites have been explored, but the preferred option, following from
previous work by DDG, is at Port Chamuill, approximately one kilometre north of the old
Portnacon Pier (a facility too small for today’s requirements and in private ownership with
no public rights of use). A rough driveable track connects the shoreline with the A838 public
road at this point, and the area is already used as a launch point for small fish farm boats
and for storage of fish farm equipment.
There is currently no harbourage on the Loch Eriboll shore that is accessible to boats at all
states of the tide. The priority is therefore to create a facility with moderately deep-water
access at all times. In addition there is very little in the way of proper sheltered harbourage
in certain wind conditions, and this greatly hampers fish farm operations at such times. The
intention is therefore to build two breakwaters so as to provide a sheltered useable harbour
in all conditions.
The main features of this infrastructure development are:
 Two breakwaters
 A floating pontoon mooring system for commercial and leisure craft within the
breakwaters.
 A slipway
 Improved shore facilities – Café, toilets, shower block, laundry, telephone and
broadband with the added attraction of local/heritage information.
The landowner of Rispond Estate has agreed to a 99 year lease for the site of the harbour
and shore facilities for a ‘peppercorn’ rental. In addition he will gift the materials for the
Loch Eriboll Harbour Business Case
Page 23
construction of the breakwater.
6.3 Capital Costs
We have based this plan on the following anticipated costings:
 Planning & Design: £125000
 Project Management: £34192
 Breakwater, pontoon & café, office/toilet construction: £4 million
6.4 Financing the Plan
It is envisaged that the plan will be financed in the following manner:
Item
Planning & Design
Project Management
Breakwater etc.
Funder
HIE/Trusts
HIE/Trusts
HIE
Coastal ComBreakwater/Café/Toilets
munities
etc.
Fund/BLF GCA
Breakwater etc.
ERDF
Amount
£125000
£34192
£1000000
£1500000
£1500000
Highlands & Islands Enterprise
DDG is an account managed organisation via HIE. HIE has funded the costs of the local
Development Officers and the majority of the initial costs related to the harbour
development market exploration.
European Funding
The EU have part funded similar projects in the Highlands and Islands. Potential areas for
accessing this funding include:
 http://ec.europa.eu/maritimeaffairs/policy/coastal_tourism/index_en.htm
 http://www.scotland.gov.uk/Publications/2008/07/29142448/0
Although ERDF is currently in abeyance, the new fund will be on stream by the time DDG is
ready to submit an application. The role of ERDF Priority Three in the previous programme
was in supporting the sustainability of fragile areas, those threatened by peripherality,
limited access to services, out-migration and a weakened enterprise foundation.
“The Programme will be directed at generating sustainable local communities which are
diverse, adaptable and resilient; sustainable enterprises with well-developed skills and
markets; sustainable communities with confidence capability and social and economic
vitality; and sustainable use of natural resources including the regions primary products, its
natural environment and its cultural assets.”
Key issues in ERDF included:
 Economic and social development should be pursued in tandem, as both contribute
equally to making communities sustainable by reversing out-migration.
 Issues to be combatted include long-term population loss, low incomes, limited employment opportunities, dependency on a narrow and often seasonal range of economic activities, poor infrastructure, poor transport, access and adverse geography.
Loch Eriboll Harbour Business Case
Page 24
Priorities included:
 removing the barriers and lack of incentives to entrepreneurs and growing enterprises
 Enhancing the sustainable use of the region’s natural, historical and cultural environment.
 Increasing business development.
 Improving sustainable community infrastructure
Coastal Communities Fund
Applications to CCF closed in April 2014 and are not planned to reopen in the near future.
http://www.biglotteryfund.org.uk/global-content/programmes/uk-wide/coastalcommunities
However, the programme does exemplify an approach which could, if re-started, be utilised
to support the Loch Eriboll plan.
Realistically, the DDG proposal would require Highlands and Islands Enterprise, Highland
Council, The Crown Estates Commission and Social Investment Scotland jointly planning a
partnership approach with the local community towards delivering the harbour.
6.5 Implementation Mechanism
Key Project Plan Timescales
2016/17
Planning &
Design
Funding in
Place
Initial
Construction
Standard
Operations
2017/18
2018/19
2019/20
Staffing
The necessary staffing will include project management, procurement/construction and
then operational management:
Procurement and Construction
The procurement and construction stage will involve the commissioning of a number of construction professionals. These include:
 The Design Team (Architect, Engineer and Quantity Surveyor) appointed to develop the project and obtain planning consent). Also, a Construction Design and
Management co-ordinator to develop the Health and Safety processes
 A Project Manager to oversee the tendering process, schedule the works, liaise
with the contractor and certify payments.
The management of the tendering process, appointment of the contractor, construction and
fit out will be the responsibility of the Project Manager employed or contracted for that
purpose subject to Board approval. This will be a 0.5 post for 21 months on an employed or
contracted basis.
Loch Eriboll Harbour Business Case
Page 25
Control Systems
The overall approach to Control procedures that DDG will implement include:
 Detailed project management plans e.g. Prince II
 Regular, Project Management Meetings to consider key risks and document
decisions
 Transparent, documented administrative systems
Project Management Plans
The application of effective planning by DDG will militate against undue risk, reduce costs
and result in a better quality building. DDG has developed a project management approach
which includes:
 An overall plan and costing split into preliminaries and separate phases.
Each phase plan includes timescaled actions and lead responsibilities,
breaking down areas of work into “packages”.
 Additionally, each package of work will have a specification. This specification will be based on the building warrant or QS.
 The responsibility for delivering the plan would lie with the project manager, reporting to the DDG Board.
 Planning for business start post construction – Harbour Manager responsibility.
Management Meetings
The DDG Directors are investing responsibility for overseeing the Development in a
Development Plan (DP) Sub Committee. The DP Sub Committee’s remit is to:
 co-ordinate all operational aspects of the development
 agree detail of programme planning
 assess options with pros and cons and make recommendations for all Directors approval
 assess progress and report reasons for variance to Directors
 approve payments
 monitor budget
 agree on variances to budget for recommendation to sub committee
In short, all operational issues will be routed through the DP Sub Committee. The Sub
Committee will assess options and make recommendations to the full board of Trustees. Its
make-up will consist of the Internal Project Manager and selected Directors.
Administrative Systems
Internal Administrative Requirements in contracting will be dealt with by the project
manager -issuing contracts, contract documentation, quotation details, contract issuing and
management, tender processes and ethics in procurement. All will be documented. Whilst
elements of this will lie with the external staff, internally, transparency and documentation
in project management will be a requirement of the project manager.
Governance
It is envisaged that the following governance arrangements will be put in place:
 DDG will own the physical assets
 DDG will set up a wholly owned subsidiary which will be a private company.
 The private company will operate the harbour/cafe and covenant profits to
DDG after developing a sufficient reserves base
Loch Eriboll Harbour Business Case
Page 26
DDG operate in a rural area which has a limited base to draw on to appoint volunteers and
Directors. A concern does exist amongst locals of the potential of volunteer fatigue. This
recommendation of a trading subsidiary has borne this in mind, however, the advantage
outweigh the disadvantages:
 Protection of other DDG assets/projects against insolvency of harbour
operations
 Protection of the harbour assets for community ownership in the event of
insolvency
 Protection of Directors liabilities
OSCR remains neutral on the governance of charity’s trading subsidiaries. Their position is
that a trading subsidiary is not a charity and therefore does not fall under their remit.
However, the English Charity Commission is forthcoming:
(http://www.charitycommission.gov.uk/Publications/cc35d.aspx ):
“As a matter of good governance [in a Charity trading Company], there should be both:
 at least one person who is a trustee, but not a director or employee of the trading subsidiary; and
 at least one person who is a director of the trading subsidiary, but not a trustee
or employee of the charity.
These people are described as 'unconflicted' as they have no conflict of interest in their roles.
These unconflicted trustees and directors should advise their colleagues as to the proper
course of action where the duties of those with dual responsibilities are in conflict. This
reduces the risk of any transaction between the parent charity and the trading subsidiary
being challenged or questioned.”
So, DDG should as, a matter of good governance in its Charity Trading company, appoint a
director to the trading subsidiary who is unconflicted.
The Directors are aware that there will be a qualitative and quantitative leap in their
governance role once the centre becomes operational. Key issues include:
Financial Planning
 Budgeting: the implementation of the Trusts five year budgeting process with
rolling annual updates linked to the operational plan. This would be delivered by
the new harbour manager in conjunction with the DDG treasurer.
 Accounting: the implementation of software based accounting practise.
 Reporting: the establishment of a monthly reporting system which furnishes adequate financial management information to Directors linked to operational
plan outputs.
Harbour Set-up
Three months prior to building handover, a p/t Harbour Manager will be appointed whose
duties would include the planning of the opening and operational phase of the harbour;
marketing ; stocking the harbour where necessary; devising appropriate operating
procedures; arranging insurance, licences and other compliance issues and the rest of the
operational responsibilities, as well as liaising with the community.
Operational Planning
Loch Eriboll Harbour Business Case
Page 27
Alongside the budget, the harbour manager will develop a solid, grounded five year
Operational Plan based on commitments made in the business plan and funding
applications. The Operational Plan, like the financial one, would be updated on an annual
rolling basis. It would address:
 Targets: Specific, measurable and time scaled targets for all operational
business areas.
 Staffing: a staffing plan detailing key areas of responsibilities, reporting
functions, appraisal and development methodology and targets
 Governance: a plan for a revised governance programme ensuring that the
Trustees fully reflect the on-going changes in the community including
membership participation.
 Finance: a clear link will be maintained between the Operational and Financial
Plans.
 Process: the process of operational planning will be led by the manager but will
have the full participation of the board and a reporting mechanism to Trust
members at its core.
7.0 SWOT Analysis









Strengths
Strong Community Anchor Organisation
Well-developed understanding of barriers to development
Already an asset based organisation
History of strong project and financial
management (including loan finance)
Detailed business plan
Supportive community
Opportunities
Economic development opportunity
with existing local marine businesses
Economic development opportunity
with marine leisure potential
Potential “destination venue” offering











Weaknesses
Large Capex vs. perceived small returns
No large “anchor” tenant
Geographic isolation
Aging population
Outmigration
Population decline
Limited business base
Volunteer ‘burnout’ and population
decline may impact on stability
Threats
Failure to source adequate funding
Design & Costing result in a prohibitive
cost
skillsets of local boards/committees
8.0 Impacts
8.1 Economic
The economic impacts of the harbour can be summarised as follows:
 Jobs created
 New enterprises established
 Enterprises and Jobs supported
Job Creation
Construction Phase
General construction
Loch Eriboll Harbour Business Case
Type of employment
opportunity
Use local subcontractors where
Hours
Unknown – will be in
detail of QS estimates
Page 28
Rock extraction from
harbour shore site
Project Manager
Trading Phase –
Centre
Harbour Manager
possible
Use local subcontractors where
possible
High skill opportunity
to do client side
management of
construction
Type of employment
opportunity
High skill opportunity
to develop the harbour
Seasonal Assistant
Caterers
Supervisory &
operational
Shell Fish
Additional Spend
Posts*
Total
Operations staff
Tourist staff
Unknown – will be in
detail of QS estimates
18 hours per week for
21 months
Hours
0.2 FTE
Summer season casual
staff
Approx. 728 hours per
year initially – can rise
with café growth
6 x FT
0.75 FT – 1.5 FTE
9 FTE Staff
* Lochboisdale Regeneration Initiative Impact Analysis, 2010 calculated that for every £40000 of visitor spend, 1FTE job
would be created. Marine leisure specialists indicate that £150 per visiting boat is spent per day. Therefore, the additional
spend anticipated would be £29000 in trading Y1 rising to £58000 in Trading Y5.
New Enterprises
It is the intention that DDG will proactively exploit the opportunity to develop new
enterprises. They will include:
 The harbour itself
 The harbour café
 Additional shellfish business/es. This may be simply an expansion of existing
businesses.
 RNLI 2FTE should trial go ahead
Enterprises and Jobs Supported
The Trust will support the development of potential new supplier enterprises:
 Minibus and taxis (a business venture that could start up on the basis of incoming leisure craft)
 Local food & drink production e.g. potential Distillery, Brewery, Smokehouse &
Bakery enterprises could receive a kick start through the harbour development
 Laundry service for local B&B’s and visiting craft
 Letting of small business units via Rispond estate
8.2 Social
The social impacts anticipated as a result of the work of the harbour fall into the
following areas and are detailed in an appendix:
 Social cohesion
 Equality of opportunity
 Voluntary activity
Loch Eriboll Harbour Business Case
Page 29
 Culture, language and heritage
The overall targets are to increase population, develop a younger demographic and to
halt outward migration.
Social Cohesion
The key issues for social cohesion include:
 Creating a demographically balanced community based on incomers with skilled
posts
 Protecting the future of the local primary school
 Reducing net outward migration
Equality of Opportunity
DDG is committed to the elimination of inequalities and the promotion of equality
between women and men, as well as other equality issues such as ethnic origin, religion
or belief, disability, age, sexual orientation and geographical location. Specific areas
include:
 creating a fully Disability Discrimination Act (Equalities Act) – compliant harbour,
enabling people of limited mobility to access all parts of the harbour – disabled
accessible parking space, disability friendly entrance, disabled access toilet
 an information hub for the community and visitors alike
 enable elderly, infirm and disabled people a daily opportunity to drop in to the
cafe for socialising
Culture, Language and Heritage
DDG will:
 curate exhibitions, interpretation and cultural/heritage activities
 provide for the use of Gaelic in its signage and publications; encourage the
learning and use of Gaelic by staff and volunteers
 work with others to develop and deliver a package of guided historical/geological walks around community
8.3 Environmental
DDG has recognised the importance of environmental sustainability both in the design
and towards the longer term sustainability of the harbour. DDG will:





Make best use local materials thus reducing travel and construction costs.
Provide a highly insulated building making use of heat pumps for space heating
and using local materials, readily available on-site.
act as a demonstration project promoting energy efficiency and act as a model
to help the community prepare for the transition to a low-carbon economy
be a direct benefit to the environment by helping to reducing car travel and increasing sea travel
In the café promote local food products and local supply chains helping to support local producers and encourage local sourcing of food.
9.0 Financial Summary
See Appendix 9
Loch Eriboll Harbour Business Case
Page 30
Loch Eriboll Harbour Forecasts
Grants
Ending Income
Expenditure
Surplus/deficit
Total
2017
144,356
144,350
6
144,356
2018
4,023,600
4,022,762
838
4,023,600
2019
139,571
129,390
10,181
0
2020
142,985
139,483
3,502
0
2021
157,244
142,968
14,276
Totals
4,167,956
10.0 Appendices & Bibliography
10.1 Bibliography
10.2 List of Consultees
10.3 Review of Previous Work
10.4 Policy Background on Rurality
10.5 Café & Micro-Brewery/Distillery
10.6 Pelamis Background Paper
10.7 Market Research Background Paper
10.8 Culture and Heritage Research Paper
10.9 Financial Forecasts
10.10 Impacts summary Paper
10.11 Architectural Plans
Appendices:
10.1 Bibliography
Harbours & Harbour Development Policy
Eriboll Aquaculture Framework, Highland Council, 2000
Loch Eriboll Harbour Economic and Social Impact Assessment, HISEZ, 2013
Marine Consultation Areas Scotland, NCC
Planning Guide for Boating Facilities, RYA,
Report on DDG Ambition to set up a Harbour at Loch Eriboll, GHRL 2014
Port Chamuill Technical Study, Babtie 2004
Pelamis
National Renewables Infrastructure Plan, Stage 2, HIE and Scottish Enterprise 2010
Pelamis Wave Power Supply Chain Study, 2013
Farr Point Wave Farm Briefing, 2014
BRIEFING NOTE: Navigation Risk Assessment, Pelamis
The Pelamis Wave Energy Converter A phased array of heave + surge point absorbers, Ocean Power
Delivery Ltd
Sailing and Leisure Boating
Sailing in the Clyde Estuary, McKenzie Wilson, 2006
Marine Leisure and Tourism in the Highlands and Islands, CEC, 2013
Loch Eriboll Harbour Business Case
Page 31
Marine Development Opportunities in Scotland, RGA Waterfront Ltd for SDI, 2008
Sailing Tourism in Scotland, Scottish Enterprise, 2010
Sailing in the West Highlands, HIE 2009
Policy & Research
Highland Coastal Development Strategy, Highland Council, May 2010
A Minimum Income Standard for Remote Rural Scotland, HIE
Scottish Government Economic Strategy:
http://www.scotland.gov.uk/Publications/2011/09/13091128/0
Scottish Government Volunteering: www.scotland.gov.uk/Publications/2004/05/19348/36993
Scottish Government Gaelic Language Strategy:
http://www.scotland.gov.uk/Topics/ArtsCultureSport/arts/GaelicLanguage
Scottish Government Social Enterprise Strategy:
http://www.scotland.gov.uk/Publications/2008/06/19085003/0
Scottish Government Sustainable Development Strategy:
http://www.scotland.gov.uk/Publications/2011/09/13091128/0
Funding
http://www.hipp.org.uk/files/downloads/download529.pdf
http://ec.europa.eu/maritimeaffairs/policy/coastal_tourism/index_en.htm
http://www.scotland.gov.uk/Publications/2008/07/29142448/0
http://www.biglotteryfund.org.uk/global-content/programmes/uk-wide/coastal-communities
Other
Trading Subsidiary Guidance: http://www.charitycommission.gov.uk/Publications/cc35d.aspx
Eskdale Development Group Business Plan, 2013
Lochboisdale Regeneration Initiative Impact Analysis for HIE, 2010
Outline Development Plan for Cape Wrath, HIE 2013
Café/ Micro-Distillery/Brewery References:
Community Food and Health (Scotland): http://www.communityfoodandhealth.org.uk/
Café Sunlight is a community interest company: http://cafesunlight.org.uk/
Inverness social enterprise café http://www.cafeartysans.org.uk/
Glasgow social ent café : http://www.gsen.org.uk/news/case-studies/the-luv-caf/
Bike themed social ent café : http://www.socialenterprisescotland.org.uk/our-story/directory/422
Balnakeil report:
http://www.developingdurness.org/uploads/2/1/1/5/21151184/8015_balnakeil_final_190314_final.
pdf
How to start a coffee shop: http://www.howtostartacoffeeshop.co.uk/milk-and-coffee-costexample.html
Sources
Tourism Intelligence Scotland http://www.tourism-intelligence.co.uk/
“At Your Service” A practical guide to delivering the best food and drink experience in Scotland.
Visit Scotland - The key facts on tourism in 2013 Report http://www.visitscotland.org/pdf/Tourism%20in%20Scotland's%20Regions%202013.pdf
Tourism in Northern Scotland 2011
- http://www.visitscotland.org/pdf/Tourism%20in%20Northern%20Scotland%202011.pdf
Business Register and Employment Survey 2011
Loch Eriboll Harbour Business Case
Page 32
Traffic Figures: http://www.dft.gov.uk/traffic-counts/cp.php?la=Highland
http://www.ourplacewye.org.uk/uploads/running-a-community-cafe.pdf
HIGHLANDS AND ISLANDS ENTERPRISE - CAITHNESS AND SUTHERLAND - SERVICED
ACCOMMODATION NEEDS OF BUSINESS TOURISM REPORT - October 2010
List of sources for Distillery materials:
http://scottishcraftdistillers.org/membership/member-distilleries/ 15 members listed with
websites.
http://foodanddrink.scotsman.com/drink/gin/15-scottish-gins-we-recommend-you-try/ - 15 Gins
http://foodanddrink.scotsman.com/drink/everything-you-need-to-know-about-scottish-vodkas/ - 4
vodkas
http://www.heraldscotland.com/life_style/13117869.Micro_distilling_Small_is_beautiful_for_iconoc
lastic_new_breed_of_distillers/
http://www.bbc.co.uk/news/uk-scotland-south-scotland-23003748 - new distillery funding
http://www.spiritofspeyside.com/news/299_a_whole_new_meaning_to_diy_micro_distilleries_in_s
peyside
http://www.bonappetit.com/drinks/article/scotland-gin
http://imbibe.com/news-articles/spirits-cocktails/vodka/featuresgetting-into-spirit-rise-rise1129/
http://www.economist.com/node/16889440 - micro distillery market
http://www.sipsmith.com/blog/articles/regional-british-gin-distilleries
http://foodanddrink.scotsman.com/drink/gin/15-scottish-gins-we-recommend-you-try/
10.2 List of Consultees
Durness Development Group, Staff and Directors
Local Leisure Boat owners x 19
Local Water Based Business Owners x 5
Pelamis Wave Energy x 2 staff
Crown Estates Commission x 2 staff
Badachro Marine
McKenzie Wilson
Scottish Sea Farms
Durness Grazings Committee
Bidwells
Fraser Stewart Architect
Wallace Stone
Loch Laxford Shellfish Ltd
Highland Council Harbours Manager
Rispond Estate
RYA Scotland
RNLI
Local people interested in Heritage Offering x 5
Loch Eriboll Harbour Business Case
Page 33