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Roger Tym & Partners t: 01392 210868
11-15 Dix's Field e: 01392 210869
Exeter e: exeter@tymconsult.com
Devon EX1 1QA w: www.tymconsult.com
Final Report: Summary June 2011
Port of Falmouth Development Initiative
Port of Falmouth Masterplan:
Economic impact assessment of Masterplan options and the
Masterplan
Summary Report for the Masterplan document
Economic Impact Assessment of the Masterplan Options
A643
Author/Amended
by: Authorised by Date: Version:
Zifa Sadriyeva Dave Lawrence 16.06.11 RTP Port of Falmouth EIR Summary Report V4
16.06.2011 – Final
This document is designed to be printed double-sided at A4. If you would like it
available in another format, please contact the Economic Development Service at
Cornwall Council, County Hall, Truro TR1 3AY, Telephone: 0300 1234 100; Email:
enquiries@cornwall.gov.uk www.cornwall.gov.uk
Economic Impact Assessment of the Masterplan Options
CONTENTS
1 OPTIONS APPRASIAL ............................................................................... 2
2 METHODOLOGY ....................................................................................... 3
3 PORT OF FALMOUTH ECONOMIC BASELINE ................................................. 6
Employment ........................................................................................... 6
Turnover and GVA ................................................................................... 8
Net Additional Impact of the Falmouth Docks ............................................... 8
4 DEVELOPING THE PREFERRED OPTION ..................................................... 10
5 ECONOMIC ASSESSMENT OF THE PORT OF FALMOUTH MASTERPLAN ............ 13
Capital Costs of the Masterplan Development ............................................ 16
Value for Money: NPV / Benefit to Cost Ratio / Unit costs ............................ 18
Rationale / Market Failure Analysis ........................................................... 19
Risks ................................................................................................... 22
Sustainability ........................................................................................ 23
Funding and Delivery ............................................................................. 25
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 2
1 OPTIONS APPRASIAL
1.1 Roger Tym and Partners as part of a team led by Tibbalds Planning and Urban
Design have been commissioned by the Port of Falmouth Development
Initiative (POFDI) to produce an Economic Impact Assessment of the Port of
Falmouth Masterplan and the options drawn up during the masterplanning
process.
1.2 This report details the economic impact assessment of the Port of Falmouth
Masterplan.
1.3 The Falmouth Port Masterplan will ultimately meet the following objectives
agreed by the POFDI partners:
Retain Falmouth‟s strategic significance as a deepwater port at the
western approach to the English Channel;
Maintain and develop existing port operations and related businesses;
Introduce and support appropriate new functions and businesses;
Ensure that growth is sustainable, with sea, land and infrastructure
resources being capable of adaptation to meet changing demands ;
Maintain and create high quality jobs through strong links with the
education sector;
Support the wider economy and community;
Support sustainable development and sustainable transport;
Support the development and use of renewable resources and associated
technology;
Ensure development contributes to Falmouth‟s distinctiveness and sense
of place and respects its environmental and heritage assets; and
Ensure that the vision is deliverable.
1.4 The economic appraisal helps to highlight the extent to which the final
Masterplan option could achieve these objectives.
1.5 This Report details the appraisal of the above Masterplan Options and of the
resulting Masterplan. The aim of the Report is to provide appraisal that is
consistent with the ERDF requirements for development of a project business
case. Its structure therefore follows the relevant headings required for a
business case, including economic impact assessment, project costs, Net
Present Value (NPV) and Value for Money, risks, and delivery and funding.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 3
2 METHODOLOGY
2.1 The appraisal period for the Masterplan options is set to 2009-2030. It is
possible to forecast the impacts beyond 2030, however the uncertainty of long-
term forecasts is usually very high and increases with each additional year,
reducing their value and validity1.
Economic Impact of Masterplan Options
2.2 Each of the Masterplan options have the potential to generate an impact on the
economy of Falmouth and the wider economy of Cornwall. The purpose of the
economic impact assessment is to measure the comparative impact of each of
these options as part of the process of evolving and selecting the option that
best meets the overall objectives of the Port of Falmouth Masterplan. These
economic impacts are best measured in terms of the jobs they create and the
value to the local economy generated by these jobs.
2.3 The two principal measures used for the assessment of economic impact are
therefore:
Jobs – expressed as full-time equivalent (FTE) jobs. This adjusts for the
fact that a full time job will be worth more than a part-time job
GVA – Gross Value Added (GVA) is the standard measure of economic
output and accounts for the fact that some jobs will create more value
than others
Additionality of Impacts
2.4 In calculating impact of each of the intervention options it is important to take
account of what would have happened in the absence of a project (or
intervention). In the absence of intervention the economy of Falmouth will not
stand still but will continue on its existing trajectory. The position without a
project / intervention is known as the reference case. The assessment
estimates additional employment and Gross Value Added (GVA) impacts of a
project over and above what would have happened in its absence.
2.5 The key components of additionality are explained below:
Gross direct effects – An estimate of the total effect of a project i.e.
considering wider consequential or induced effects as well as the
immediate effects. These effects include not only impacts of Docks‟
businesses but also impacts from visitor spending associated with cruise
sector, new marina, and marine related events in Falmouth.
1 In addition many structural economic changes may occur in the long-term, which can reduce negative
economic impacts arising from development proposals (if there are any) and therefore may render them meaningless. For example, if a number of jobs is lost due to changes from industrial to residential uses, the economy may be able to replace them in the long-term. However for the purposes of a project
appraisal such argument would make comparison of the options and scenarios impossible.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 4
Leakage effects - Level of activity lost to target area – i.e. the
proportion of jobs or GVA that accrue those outside the target area of
Cornwall.
Displacement effects –The extent to which project will take market
share, labour, land or capital from other local firms i.e. the proportion of
the outputs / outcomes accounted for by reduced outputs / outcomes
elsewhere in the target area.
Substitution - Where a firm substitutes one activity for another (e.g.
recruits a jobless person while another employee loses a job) to take
advantage of public sector assistance. There are not expected to be any
substitution effects associated with the Masterplan options.
Multiplier Effects - associated with additional local income and local
supplier purchases. There are two types of multiplier:
▫ A supply linkage (or indirect) multiplier due to purchases made as a
result of the project and further purchases associated with linked
firms along the supply chain;
▫ An income (or consumption / induced multiplier) associated with local
expenditure as a result of those who derive incomes from the direct
and supply linkage impacts of the project.
Deadweight (reference case) – The extent to which activity generated
would have happened anyway i.e. the target outputs/outcomes that
would occur at the end of the project if the project was not implemented.
In the case of Masterplan options, we consider that the „Do Nothing‟
Option can be used as the „reference case‟ and the outputs associated
with that Option represent what would be achieved if the Masterplan was
not delivered.
2.6 To calculate direct impact in terms of jobs, turnover, and GVA, specific leakage
and deadweight rates, and specific indirect and induced multipliers, we carried
out a survey of businesses based at the Falmouth Docks that would be affected
by the proposals. The survey was undertaken by telephone and direct
meetings, which ensured a high response rate and good quality of responses.
We experienced good level of co-operation from all of the businesses who
provided detailed responses to the survey questions.
Appraisal of Masterplan Options
2.7 The quantified economic indicators measure the contribution each Option would
have to the local economy, but they say nothing about how much this costs,
how likely it is to be delivered, or how effective it is in meeting policy
objectives. Therefore to appraise each option they need to be subject to a set of
wider assessment criteria.
2.8 The other appraisal criteria draw directly from the Treasury Green Book, which
provides guidance on appraisal of projects, and are outlined briefly below
Strategic Fit
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 5
2.9 We reviewed the extent to which the options fit with the objectives agreed by
the POFDI partners (set out in the Introduction). The Masterplan Options were
assessed in terms of what they would do to advance these objectives. They
were also assessed in terms of wider regional and national policy conformity as
well as links with local plans and other projects that are being developed. The
Masterplan options appraisal looks at the strategic fit of each of the selected
development options as a whole, i.e. inclusive of all industries at the Docks.
2.10 The options are rated based on the significance of their contribution towards
objectives on the scale from „moderate‟ to „sufficient‟ and to „significant‟.
Rationale/ Market Failure
2.11 This part of the analysis examines the rationale for public funding of particular
elements of the options identifying specific types of the market failure.
Value for Money
2.12 Value for Money will assess costs per one unit of benefits achieved, e.g. cost
per one additional job or per one pound generated in the economy; net present
value of cash flows, and analyse the Benefit to Cost Ratios for all options to
enable a comparison of value.
Risks
2.13 The levels of risks are identified shown for each option. The risks include factors
such as reputational, environmental, funding, and business risks rated by
likelihood and impact.
Sustainability Appraisal
2.14 This provides a high level analysis of whether the options are sustainable both
economically and environmentally.
Delivery and Funding
2.15 A high level analysis of the deliverability of each of the options will be provided
under this section without going into the detail of particular funding sources.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 6
3 PORT OF FALMOUTH ECONOMIC BASELINE
3.1 This Chapter presents the baseline assessment of Falmouth Docks‟ businesses
showing the economic value of the Port in 2009. It is based on a survey of
businesses carried out in February 2010 and hence businesses could only report
financial and employment data for 2009 at the time.
Employment
3.2 RTP had undertaken a survey of businesses located at the Docks to update the
economic impact assessment estimates made in April 2004 by RTP. RTP carried
out a thorough survey of Docks‟ businesses at the time (in 2004) and reported
that these businesses employed a total of 1,120 employees: 671 full time
permanent staff; 25 part time permanent staff; 9 full time agency / contract
staff and 415 temporary / casual agency / contract staff. Although an estimate
of the FTE jobs was not provided at the time we can convert this number to
approximately 1,000 FTE jobs.
3.3 RTP undertook a survey of the Docks businesses in February 2010 and a follow-
up survey in June 2010. The RTP survey of 16 businesses2 out of 18 businesses
and organisations based and operating at the Docks found that there were
1,465 employees employed by these businesses in 2009. This number includes
150 FTE jobs that are physically located outside the Docks but are directly
dependent on the operations of one business at Falmouth Docks3. The
breakdown of employees and FTE jobs by type of contract is presented below in
Table 3.1. The survey result shows an increase of 40% in employment at the
Docks or 6% annual growth since 2004.
3.4 The full-time equivalent of part-time jobs is estimated based on total hours
worked by part-time employees. In the case of part-time temporary employees
the hours worked were reported to be so high that the FTE jobs estimates are
higher than the numbers of employees.
Table 3.1 Employee numbers and FTE jobs at the Falmouth Docks, 2009
Directly
employed by businesses
Employed
through agencies
Total
Full-time
Part-time
Full-time
Part-time
Actual employees 923 189.3 325.2 27.5 1,465
FTE jobs 923 111.4 325 41.4 1,401
2 We can assume that the response rate is 100% because two organisations that did not respond are neither carrying out any productive activities at the Docks, nor employing any staff. 3 In case this business was not able to carry out its operations at Falmouth then these jobs in Cornwall
would have been lost and created elsewhere in the UK (out of Cornwall).
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 7
3.5 The breakdown of employment by main sectors is shown below. Shiprepair
employs almost half of the workforce, with the superyachts sector employing a
third. A number of different businesses servicing the cargo, the shiprepair and
the superyachts sectors are flourishing alongside and have seen continuous
growth.
Figure 3.1 Employment share (FTE jobs) of different sectors at the Port
of Falmouth in 2009
3.6 Nearly two-thirds of employees live in Falmouth and Penryn area. Of the
remaining third most live in Truro
and the rest of Cornwall with a
small proportion of employees
living outside the South West
region and in continental Europe
outside the UK.
3.7 Total salary / wage payments of
the Docks‟ businesses to directly
employed staff amounted to
£22.96 million p.a. and to
agencies / sub-contractors for
staff employed through them –
to £8.4 million p.a.; this results
in a total wage bill of £31.35
million annually.
3.8 The average salary at the Docks was therefore £21,400. The average annual
payment per agency / sub-contractor staff was estimated at £23,7854. This is
higher than the average £20,222 annual pay of both full-time and part-time
employees in Cornwall in 2009.
4 Estimated based on the agency/sub-contractor staff wage bill and a number of agency/sub-contractor
staff FTE jobs
Figure 3.2 Proportion of employees by area of residence
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 8
Turnover and GVA
3.9 The total turnover of Dock‟s businesses was estimated at more than £116
million. During the past five years businesses reported an average 12% annual
growth in turnover. The Dock‟s businesses appear to have been growing so far
despite the recession.
3.10 Gross Value Added represents the contribution of a business or industry to the
UK‟s economy and is the value of total output less the value of all inputs. GVA
is formed by compensation of employees, taxes less subsidies, and operating
surplus.
3.11 Based on the survey data the total amount of GVA (total estimated turnover
less the value of inputs) equals to £75 million. The GVA per job at the Falmouth
Docks is therefore £53,570, considerably higher than the South West average
of £44,350 per FTE job5.
Net Additional Impact of the Falmouth Docks
3.12 We estimate that the total net number of FTE jobs (gross direct FTE jobs minus
leakage and displacement plus multiplier effects) supported by the Falmouth
Docks was 1,689 in 2009. The net additional number of FTE jobs (total net FTE
jobs minus deadweight) within Cornwall was 895 (as set out in Table 3.2).
3.13 Based on the GVA per job at the Docks the net total GVA was £82 million in
2009 (i.e. including supplier linkages and induced effects) – almost as much as
the total Docks‟ turnover, and net additional GVA was £39 million.
Table 3.2 Direct, net, and net additional jobs supported by Falmouth
Docks
Number of FTE
jobs in 2009
Direct FTE jobs 1,401
Leakage (64)
Displacement (27)
Indirect FTE jobs 107
Induced FTE jobs 272
Total net FTE jobs 1,689
5 Estimated based on GVA in broad sectors: „Manufacturing‟, „Electricity, Gas, and Water‟, „Construction‟, and „Transport, storage, and communications‟; and estimated FTE jobs in these sectors (with part-time jobs converted to FTEs applying the ratio of one part-time job equating to 0.4853 of a full-time job) in
the South West region in 2007.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 9
Number of FTE
jobs in 2009
Deadweight (what would still be
preserved if the Docks disappeared)
(794)
Total net additional, Dock-related,
FTE jobs
895
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 10
4 DEVELOPING THE PREFERRED OPTION
4.1 Through the masterplanning process the consultants‟ team developed a series
of options which were each assessed in terms of their economic impact and
other effects. The five scenarios developed en route to the Masterplan are
summarised below:
Option A „Do Nothing‟ – this option is a „reference case‟ option to
investigate the likely loss of existing infrastructure in the future, and
hence the viability of existing businesses without significant investment.
Option B „Do More‟ – this option implied that port uses are maximised
without dredging and the possibility of a limited amount of port land
being redeveloped for alternative uses was investigated.
Option C „POFDI Priorities Plus – emphasis on shipping and shiprepair‟ -
this option represented a „high investment‟ scenario, maximising the
potential of all usable spaces for port uses and investigating the
maximum benefit that dredging might bring to deepwater uses, such as
the cruise sector, cargo shipping, and shiprepairs, without any non-port
uses being introduced.
Option D „Maximising mixed-use opportunities‟ – this option investigated
the potential of using residential / mixed-use areas to cross-fund
investment in the Port and the effects that a reduced site area may have
on port uses. It consolidated cargo operations to a single area, on an
extended Western Breakwater and Wharf.
Option E – this option was developed after the assessment of the four
preceding options and additional consultations with POFDI partners, and
represented consultants‟ recommendations for combining the most
effective elements of the other Options tested.
4.2 The total net additional impacts of each option over and above the reference
case are summarised in the Table 4.1 below. The figures are displayed in terms
of the estimated net annual impact in 2015 and 2030.
4.3 Option E delivers higher level of benefit compared to all options with an
additional c.a. 4,508 jobs and £216.5m GVA over and above the „Do Nothing‟
reference case.
4.4 The reason these options generated the largest impact is due to adding a lot of
additional capacity to the superyachts sector and, in the case of Option D in
particular, due to the larger marina that would increase wider economic
benefits. Option E, however, differs from Option D in achieving all of the
Masterplan objectives as it keeps Falmouth Docks in port-related use. Option E
provides more room for growth in the long-term compared to Option D, which
gives up valuable wharfage space to residential uses.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 11
Table 4.1 Net additional FTE jobs and GVA in 2015 and 2030 (2015 /
2030 achieved benefits minus ‘Do Nothing’)
FTE jobs GVA
Docks'
businesses
Wider
economic benefits
Total Docks'
businesses
Wider
economic benefits
Total
2015
Option B - Do
More 604 11 615 £29.71m £0.27m £29.98m
Option C - POFDI
Priorities Plus:
emphasis on shiprepair 1,071 18 1,089 £52.25m £0.45m £52.70m
Option D -
Maximise mixed-use opportunities 1,115 34 1,150 £54.51m £0.87m £55.38m
Option E 1,577 19 1,595 £76.76m £0.47m £77.24m
2030
Option B - Do
More 1,788 14 1,802 £87.10m £0.35m £87.45m
Option C - POFDI
Priorities Plus:
emphasis on shiprepair 3,345 69 3,414 £161.83m £1.73m £163.56m
Option D -
Maximise mixed-use opportunities 3,667 85 3,752 £177.37m £2.15m £179.52m
Option E 4,438 70 4,508 £214.74m £1.75m £216.49m
4.5 All of the options deliver a good economic return in relation to the costs of the
scheme. The Net Present Value of the Masterplan options is estimated using the
costs up to 2030 and forecast values of generated net additional GVA. A
discount rate of 3.5% was applied as per the HM Treasury Guidance. This
shows a high positive return to the local economy with the value of the output
generated far exceeding the costs of the scheme for each of the options. In
terms of value for money Option E delivers the highest net present value of
cumulative GVA until 2030, and scores higher than Option C with a Benefit:Cost
Ratio to the local economy of 8.3 and a cost per 1 FTE job of £37,861. Option
B and Option D provide similar value for money, however Option B delivers
least number of jobs and GVA, whereas Option D fails other assessment tests
(Masterplan objectives, planning issues assessment, and long-term economic
sustainability) and in the course of the work on Masterplan Options has been
proven undeliverable.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 12
Table 4.2 Net Present Value of the Masterplan Options
Masterplan Options NPV of net
additional
GVA
BCR –
based
on NPV
Cost
per £1
GVA
Cost per 1
FTE job
Option B - Do More £612m 8.9 £0.11 £38,381
Option C - POFDI Priorities Plus: emphasis on
shiprepair £1,042m 6.9 £0.14 £44,078
Option D - Maximise mixed-use opportunities £1,166m 8.5 £0.12 £36,385
Option E £1,413m 8.3 £0.12 £37,861
4.6 The most cost efficient option is therefore Option E, which combines the best
features of Options C and D. Option C stands out as the least efficient in terms
of costs per 1 FTE job generated mainly due to the lack of additional
employment space as envisaged under Option E.
4.7 This options appraisal process was an input into the final preferred Masterplan
option. The Masterplan derived from the options appraisal process is set out
and assessed in the following chapter.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 13
5 ECONOMIC ASSESSMENT OF THE PORT OF FALMOUTH MASTERPLAN
Masterplan scenario
5.1 The delivery of the Port of Falmouth Masterplan would be phased over a period
of 15 years. Phase I – to be developed broadly during the next five years –
would include the majority of the infrastructure and facilities required to ensure
the growth of the shiprepair and superyachts sectors. The shipping and the
shiprepair sectors would be boosted by the dredging of the main approach
channel and new workshops. The superyachts business would benefit from a
new dock basin and a pier, as well as workshops, expanding its capacity to
work with larger superyachts. In addition, Phase I will improve and upgrade oil
bunkering facilities, provide new Port control and workshop facilities, develop
290 berth marina, and would commence the delivery of a development at the
Docks‟ gateway that would see a number of mixed port-related uses. These
projects are set out in Figure 5.1
Figure 5.1 Phase I development projects
5.2 The future phases of the Port development would further expand and modernise
shiprepair workshops and facilities, rationalise and re-build port related
business and operational units, and will expand the marina. The extent of this
expansion is subject to future investigation as it will impact the usage of the
County and Duchy Wharves by larger ships. Western Wharf will be expanded
providing additional quay length.
Economic Impact
5.3 Under the Masterplan scenario, there would be a total of 4,125 FTE jobs
generated by Falmouth Docks by 2030. This represents a net addition of 3,273
FTE jobs over the „Do Nothing‟ scenario alternative.
5.4 Phase I generates a total of 2,713 FTE jobs by 2015 or a net addition of 852
FTE jobs over the „Do Nothing‟ alternative. Phase I projects will lead to
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 14
additional investment into „Potential Future Projects‟ after 2015 that would not
have happened without Phase I investment. The long-term impacts of Phase I
therefore include those of subsequent projects that are kicked off by Phase I6.
5.5 The impacts of the Masterplan development in their entirety are detailed in
Table 5.1 below which provides a comparison of the difference between the
Masterplan and the „Do Nothing‟ scenario.
Table 5.1 Masterplan Employment Impacts (Phase I projects7)
2009
(baseline)
2015 2020 2025 2030
Gross direct FTE jobs
Do Nothing 1,401 1,552 1,154 693 687
Masterplan 1,401 2,165 2,957 3,216 3,335
Total net FTE jobs = Gross direct FTE jobs – Leakage – Displacement + Indirect FTE jobs +
Induced FTE jobs
Do Nothing 1,689 1,843 1,371 823 816
Masterplan 1,689 2,610 3,565 3,876 4,020
Masterplan: Net additional FTE jobs directly at the Docks
0 767 2,194 3,053 3,204
Construction total net FTE jobs
Do Nothing 0 0 0 0
Masterplan 78.2 78.2 78.2 0.0
WIDER ECONOMIC IMPACTS
Cruise sector benefits: total net FTE jobs8
Do Nothing 14.0 18.3 23.7 29.3 36.2
Masterplan 14.0 25.3 55.8 73.4 94.2
Masterplan: Net additional FTE jobs in Cruise
sector
0.0 7.0 32.1 44.1 58.0
Marina benefits: total net FTE jobs9
Do Nothing 0 0 0 0
Masterplan 10.9 10.9 10.9 10.9
Masterplan: Net additional FTE jobs for the
Marina
10.9 10.9 10.9 10.9
TOTAL CUMULATIVE NET FTE JOBS
6 It is assumed that the marina size will stay the same at 290 berths due to high uncertainty associated with increasing the size of the marina in the future. This is related to navigation and planning issues and competition from other marinas in the area. 7 Including impacts of the subsequent investment in Potential Future Projects that cannot happen without Phase I projects. 8 Include direct, indirect, and induced impacts 9 As above.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 15
2009
(baseline)
2015 2020 2025 2030
Do Nothing 1,703 1,862 1,394 852 852
Masterplan 1,703 2,713 3,699 4,028 4,125
TOTAL NET ADDITIONAL FTE JOBS
Masterplan 0 852 2,304 3,175 3,273
5.6 Gross Value Added was estimated using average GVA per job at the Falmouth
Docks. For GVA generated by indirect employment GVA per job of £44,350 in
„Manufacturing‟, „Construction‟, „Electricity, gas, and water supply‟, and
„Transport, storage, and communication‟ sectors in South West region in 200710
is applied. Induced impacts are estimated using GVA per job of £25,175 in
„Wholesale and retail trade‟ and „Hotels and restaurants‟ in South West region in
2007.
5.7 The figures for both the Masterplan and „Do Nothing‟ reference case are set out
in the Table 5.2 below. The gross direct annual GVA generated by Docks
businesses is forecast to grow to £116 million by 2015 and £178.7 million by
2030 – more than doubling the current output of the Port.
5.8 By 2015, the Masterplan development will have generated an additional £41m
per annum to local GVA and by 2030 it will have raised GVA by an additional
£156.6m per annum.
Table 5.2 GVA Impacts of the Masterplan Development (Phase I
projects11)
2009
(baseline)
2015 2020 2025 2030
Gross direct annual GVA
Do Nothing £75.00m £83.14m £61.83m £37.12m £36.80m
Masterplan £75.00m £116.00m £158.44m £172.27m £178.68m
Total net GVA = Gross direct annual GVA – Leakage – Displacement + Indirect GVA + Induced
GVA
Do Nothing £81.76m £89.73m £66.73m £40.06m £39.72m
Masterplan £81.76m £126.36m £172.59m £187.67m £194.65m
Masterplan: Net additional GVA
directly at the Docks
£0.00m £36.63m £105.86m £147.61m £154.93m
Construction total net GVA
Do Nothing £0 £0 £0 £0
10 Latest data on GVA by broad sectors that was available in 2010. 11 Including impacts of the subsequent investment in Potential Future Projects that cannot happen
without Phase I projects.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 16
2009
(baseline
)
2015 2020 2025 2030
Masterplan £4.78m £4.78m £4.78m £0.00m
WIDER ECONOMIC IMPACTS
Cruise sector benefits: total net GVA12
Do Nothing £0.35m £0.46m £0.60m £0.74m £0.91m
Masterplan £0.35m £0.64m £1.41m £1.85m £2.37m
Masterplan: Net additional GVA in
Cruise sector
£0.00m £0.18m £0.81m £1.11m £1.46m
Marina benefits: total net GVA13
Do Nothing £0 £0 £0 £0
Masterplan £0 £0.27m £0.27m £0.27m £0.27m
Masterplan: Net additional GVA for
the Marina £0 £0.27m £0.27m £0.27m £0.27m
TOTAL CUMULATIVE NET GVA
Do Nothing £82.11m £90.19m £67.33m £40.80m £40.63m
Masterplan £82.11m £131.38m £178.38m £193.90m £197.29m
TOTAL NET ADDITIONAL ANNUAL GVA
Masterplan £0.00m £41.19m £111.05
m
£153.10
m
£156.66
m
Capital Costs of the Masterplan Development
5.9 Capital costs of the Masterplan projects are shown below by Phase of
implementation. The total investment required during Phase I amounts to
£101.3 million during the next five years.
Table 5.3 Schedule of Costs: Masterplan - Phase I (2011 – 2016)
development projects
Schedule item Capital Cost, £
Dredging of the main channel and deep water berth £23,000,000
Marina - 290 berths including car park £10,000,000
Upgrade of fuel tanks £12,000,000
New low flash slops facility (including relocation of helipad if
required) £1,500,000
Refurbish Eastern Jetty / Breakwater £3,330,000
New crane adjacent to No. 2 Dock £1,250,000
Queens/ Northern Wharf infill / extension £8,000,000
12 Include direct, indirect, and induced impacts 13 As explained in previous footnote.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 17
Schedule item Capital Cost, £
New shiprepair workshops (Stage 1) [4,750 sqm GEA 1,900 sqm
mezzanine levels] £4,000,000
Gateway development Stage 1 of the total 18,200sqm GIFA including relocation of Port weighbridge and Port health building /
facility £14,000,000
Remediation, capping and car park over former landfill site £3,000,000
Superyachts dock basin and new pier £10,000,000
Enlarged workshop facilities at Dock No. 1 £1,500,000
Superyachts workshops and bunkering offices [6300sqm GEA] £2,500,000
Combined Heat and Power (CHP) plant [note: excludes cost of docks heat main] £3,000,000
Port control building and small workshop on Queens Wharf £2,000,000
Installation of berthing dolphin - Queens Wharf £250,000
Sustainable transport package £2,000,000
Total £101,330,000
5.10 The cost of one Phase I project has not been identified at this stage:
Docks heat main
5.11 Potential Future Projects that can be implemented after Phase I is completed
have also been identified and their costs estimated. At this stage, however
these projects are less certain and will depend on what will be achieved during
Phase I. The value of investment will need to be reviewed at a later stage. The
schedule of costs shown below would require an additional £70 million at
current prices.
Table 5.4 Schedule of Costs: Masterplan - Potential Future Projects (2015-
2026)
Schedule item Capital Cost, £
New shiprepair workshops (Stage 2) [10,000 sqm GEA + 4,000
sqm mezzanine levels] £6,000,000
Port related business space and operations units [11,340 sq.m.
GIFA] £12,300,000
Cliff face multi-storey car park [400 vehicles] £3,200,000
Multi-use shiprepair and renewables workshops [5,000 sqm GEA +
2,000 sqm mezzanine levels] £3,500,000
New superyachts workshops [1,700 sqm GEA] £3,000,000
Western Wharf load-out £15,000,000
Enlarged and relocated marina [650 berths assumed] £13,000,000
Consolidated marina car parking [450 vehicles in multi-storey car
park] £3,600,000
Dredging of Eastern Jetty pocket for bunkering £570,000
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 18
Schedule item Capital Cost, £
Gateway development Stage 2 of the total 18,200sqm GIFA £10,000,000
Total £70,170,000
5.12 The cost of two potential future projects have not been identified at this stage:
County/Duchy wharf area. Future port use undecided
Potential expansion of Falmouth Harbour Commissioners marina
Value for Money: NPV / Benefit to Cost Ratio / Unit costs
5.13 The Net Present Value (NPV) of the Masterplan is estimated using the costs up
to 2030 and forecast values of generated net additional GVA (Table 5.5). The
discount rate of 3.5% was applied as per the HM Treasury Guidance.
Table 5.5 Net Present Value of the Masterplan
NPV of net
additional GVA
Masterplan development £1,029.4m
5.14 The Masterplan produces significant additional positive benefits over the course
of 2010-2030.
5.15 Benefit to Cost Ratios for the Masterplan have been estimated based on the
cumulative net present value of additional benefits derived above and on the
annual additional GVA benefits as follows:
Table 5.6 Benefit to Cost Ratios
Masterplan indicator
BCR – based on NPV 10.2
BCR – based on annual additional GVA in 2030
1.5
5.16 The cumulative measure of additional GVA benefits to 2030 represented by the
NPV exceeds total costs by 10.2 times. The annual measure of GVA benefits
achieved in 2030 exceeds total costs by 1.5 times.
Another useful measure of the value for money is the cost per unit of
outcomes.
5.17 Table 5.7 shows how much it will cost to generate £1 of net additional GVA
(cumulative net present value) until 2030 and 1 net additional FTE job achieved
by 2030.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 19
Table 5.7 Costs per one additional FTE job and £1 of additional GVA
generated
Cost per £1 GVA £0.10
Cost per 1 FTE job £30,957
5.18 The Masterplan performs well in terms of cost per £1 of net additional GVA
generated by 2030 with the cost of £0.10 per £1.
5.19 For comparison purposes, the reported cost per net additional job achieved by
English RDAs on physical regeneration programmes between 2002/03-2006/07
was on average £63,271 for all projects and £42,101 for projects that were
bringing land back into use14. Achieved cost per net additional jobs for „Science,
R&D, and innovation infrastructure‟ projects‟, which helped develop science
parks was £37,938. The preferred Masterplan Option therefore will result in
better value-for-money compared to these benchmarks.
Rationale / Market Failure Analysis
5.20 Market failure provides the rationale for public investment which should only be
directed to projects which the private sector is unable to fund itself.
5.21 Preliminary discussions with Docks businesses show that most of the capital
investment would come from the businesses themselves. However, some of the
more expensive port infrastructure elements may not be possible to fund
privately in their entirety. For Phase I these are:
Dredging of the main approach channel estimated at £23 million
Enlargement and merging of the Queens and Northern Wharves – c.a. £8
million
Dock basin at the superyachts site and pier – c.a. £10 million
New workshops for the two shiprepair and superyachts businesses - £6.5
million
Enlarged workshop facilities at Dock No. 1 - £1.5 million
Remediation of the Eastern Former Tip site - £3 million
Port control building and a small workshop - £2 million
CHP plant - £3 million
5.22 Excluding the dredging of the channel these projects total £33.75 million. In
addition, a number of proposed employment space developments will cost £14
million during Phase I and potentially further £25.8 million during the
14 BERR, 2009. „Impact of RDA spending – National report – Volume 1 – Main Report’.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 20
subsequent future development (port related business space and operational
units and fabrication workshops for marine renewables).
Rationale for public funding of the dredging project
5.23 Despite the increasingly obvious business opportunities that dredging can offer
to Falmouth the high cost and the accessibility of the approach channel to all
users create a market failure whereby businesses are unable and unwilling to
finance this project. It makes the approach channel a public good similar to
road infrastructure. Furthermore, the European Commission itself confirmed
that it views dredging as a public good in its Communication “Reinforcing
Quality Service in Sea Ports: A Key for European Transport”15.
5.24 During the RTP survey and interviews with key businesses it became clear that
without dredging there would be a limited amount of private investment at the
Docks, comprising an expansion of the superyachts business and the upgrading
of the tank farm by the oil bunkering business. The „Do Nothing‟ scenario
therefore has been developed to reflect what will happen to the Port of
Falmouth without large scale investment into upgrading and rationalisation of
the infrastructure and facilities within the Docks. The dredging project is
therefore a main driver of the investment in a majority of projects with the
principal exception of the superyachts sector.
Rationale for public funding of the rest of port infrastructure and
facilities
A&P Workshops, New Crane, Queens and Northern Wharves, and Port Control
Building
5.25 Marine renewables sector is currently heavily supported by the government due
to its infancy and the high cost of starting up business activities. The latter is
due to high costs of infrastructure, e.g. connections to the grid, high capital and
borrowing costs, and therefore an uncertain or insufficient return on
investment. These identified market failures (mainly the public good nature of
some of the goods and services, imperfect competition, and environmental
externalities of traditional energy generation) are being targeted by
government regulation and funding. For example, the Government announced
in October 2010 that it would invest £60 million in port infrastructure to help
15 Cf. Commission Communication COM (2001) 35 final of 1.2.2001, p. 11 reads as follows:“Public (general) infrastructure is open to all users on a non-discriminatory basis. It includes maritime access
and maintenance (e.g. dikes, breakwaters, locks and other high water protection measures; navigable
channels, including dredging and icebreaking navigation aids, lights, buoys, beacons, floating pontoon ramps in tidal areas); public land transport facilities within the port area, short connecting links to the national transport network or TENs; and infrastructure for utilities up to the terminal site. Investments in
such infrastructure are normally considered by the Commission as general measures, being expenditures incurred by the State in the framework of its responsibilities for planning and developing a maritime transport system in the interest of the general public provided the infrastructure is de jure and de facto
open to all users, actual or potential in accordance with Community legislation”.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 21
establish offshore wind manufacturing sector in assisted areas of the UK.
Assessments of supply chain gaps in offshore wind sector16 clearly identify the
lack of vessels for offshore wind as one of the key constraints. The
modernisation of the Port of Falmouth is required both to respond to business
opportunities arising from wave energy and offshore wind sectors and to enable
these emerging sectors to fully develop in the UK.
5.26 The port control building would benefit all of the Port of Falmouth users.
Dock Basin and Pier, Enlarged workshop facilities at Dock No. 1, Workshops for
the Superyachts Sector, and Remediation of the Eastern Former Landfill Site
5.27 The superyachts sector presents the highest growth opportunities at the
Falmouth Docks. It urgently needs to expand its capacity due to recent
acquisition of a superyacht brand and the current business growth. It has
become clear that failure to increase capacity in Falmouth will lead to the loss
of opportunity for the local economy as additional capacity will be sought either
elsewhere in the UK or in continental Europe with uncertain implications for
operations in Falmouth. Currently the superyachts sector provides 27% of
highly skilled jobs at the Docks and is effective in training and skills
development through its training centre and apprenticeships programme. In
addition, the sector contributes to the image of Falmouth as a town with marine
heritage and tourism. It brings in high net worth customers increasing their
awareness of the town, and their yacht crews for temporary stay during yacht
refits and repairs. The sector therefore has a high value in terms of its potential
to positively affect the local economy both in terms of directly generated visitor
expenditure and future tourism growth as a result of impact on the town‟s
image and brand. The superyachts sector will not itself capture these visitor
and tourism related benefits. Hence the danger of the sector expanding to
locations outside of Falmouth that was indicated during early stages of work on
Masterplan options and on Option A „Do Nothing‟ in particular. Local
communities therefore need to secure the presence of the superyachts sector in
Falmouth in order to safeguard and gain additional wider benefits it generates.
Such wider benefits are a positive externality of the superyachts sector and the
private business itself will not be willing or able to support it without public
assistance.
Combined Heat and Power plant
5.28 The Combined Heat and Power (CHP) station would reduce CO2 emissions
related to the energy used by the Docks‟ businesses. It could therefore address
one of the key environmental policy issues of the government. The project will
address the negative environmental externality of the current energy
consumption at the Docks.
16 BVG Associates, 2010. „ Towards Round 3: Building the Offshore Wind Supply Chain‟
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 22
Risks
5.29 The levels of risks involved in the development of the Masterplan are shown
overleaf. Risks are scored by assigning a likelihood (probability) of each risk
and their impact on the delivery of the Masterplan and Masterplan objectives.
The scales are from 1 to 5 where 1 is low and 5 is high. The risks, if
materialised, can have time, cost, and environmental implications. The extent
of these is not identified at the present level of analysis, however the „totals‟
provide information on how many of these implications have been accumulated.
5.30 The Masterplan performs better in terms of risks than previously developed
Options as a result of combining their best and most deliverable features. The
Masterplan was developed in the course of more than one year, which saw the
POFDI partnership continuing the work despite any setbacks. The likelihood of
failing to continue the partnership has therefore been reduced. The probability
of public funding not being available for the dredging project has also been
reduced reducing the risk associated with it. Shiprepair sector has a high risk
score due to the higher risk associated with more capacity for shiprepair
because there is more uncertainty with the forecast turnover in this sector. The
superyachts sector in contrast is less likely not to achieve the forecast turnover,
even with more capacity available.
Table 5.8 Risk assessment of the Masterplan
Risk Risk Effect:
Lik
eli
ho
od
Im
pact
Ris
k R
ati
ng
Tim
e
Co
st
En
vir
on
men
tal
Failing to continue successful POFDI
partnership cooperation 1 5 5 X X
Failing to establish a delivery task force
2 4 8 X X X
Securing landowners co-operation
and commitment 3 5 15
Failing to reach the projected turnover after the implementation:
Shiprepair 3 5 15 X X
Cruise sector 2 3 6 X
Cargo 2 2 4 X
Superyachts sector 2 5 10 X X
Other supporting businesses; marine engineering
1 4 4 X X
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 23
Risk Risk Effect:
Lik
eli
ho
od
Im
pact
Ris
k R
ati
ng
Tim
e
Co
st
En
vir
on
men
tal
Marine renewables: wave energy 3 4 12 X X X
Leisure boating 1 3 3 X X
Marine related events 2 3 6 X X
Commercial property lettings/sales 3 4 12 X X
Residential property lettings /sales - -
Damage to the environment 3 4 12 X X X
Pollution incident 2 4 8 X X X
Planning risk 2 5 10 X X
Delayed approval of landside environmental consents / licences
2 3 6 X X X
Delayed approval of dredging &
disposal licences 5 4 20 X X X
Availability of private funding for new business spaces
2 4 8 X X
Availability of private funding for new port infrastructure
3 5 15 X X
Availability of private funding for dredging
5 5 25 X X
Availability of public funding for new business spaces
2 4 8 X X
Availability of public funding for new port infrastructure
3 5 15 X X
Availability of public funding for dredging
3 5 15 X X
TOTAL
242 22 20 6
Sustainability
5.31 The main public sector POFDI partners have a specific agenda set by the
Government and by local communities to ensure sustainable economic growth.
The socio-economic analysis of the Port of Falmouth and the economic impact
assessment of the earlier Masterplan options against the background of the „Do
Nothing‟ scenario show that the Docks play one of the major economic roles in
Falmouth and Penryn area and any action would be more sustainable than the
inaction under the „Do Nothing‟ scenario. The Masterplan combines the best and
most deliverable features of previously developed Masterplan Options, including
the dredging of the approach channel. This ensures a longer period of growth
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 24
for Falmouth Docks and overall a long-term resilience to whatever the future
will bring in terms of much larger vessels and large marine structures for
marine renewables or any other future business opportunities.
5.32 A marina provides better integration with the superyachts sector and marine
related events. Indicative plans for a much larger marina during the next phase
of the Masterplan delivery would require giving up wharf space, which would
limit the capacity of the port for potential growth after 2030, and are therefore
provide less sustainability compared to the Phase I marina with 290 berths.
Growing demand for mooring capacity in Falmouth can be satisfied by other
operators and businesses including Falmouth Harbour Commissioners who have
outlined plans to enlarge their marina.
5.33 The economic appraisal demonstrates that delivery of the Masterplan is more
sustainable economically in the long-term compared to „Do Nothing‟ scenario,
bringing in more jobs to the local area, and supporting a diverse industrial base
in Falmouth, which is evolving and responding to the requirements of the
future.
5.34 In terms of environmental sustainability, the Masterplan may have some
adverse environmental impact due to dredging. Dredging will result in some
contaminated waste arisings and, in the absence of appropriate mitigation,
could lead to contaminated sediment entering the water environment. The
dredging could therefore have an adverse impact on the Special Area of
Conservation (SAC). Although the short-term impacts from sediment
remobilisation during dredging cannot be completely mitigated, they can be
minimised through the implementation of a rigorous environmental
management plan which would incorporate the adoption of appropriate
methods as fully explored and presented in the EIA of the dredging project17.
5.35 Modern construction practices may reduce CO2 emissions per sq.m. of premises
at the Docks, however due to future growth the emissions would still increase
overall. The development of the CHP power plant will therefore be beneficial
and will save CO2 emissions, perhaps offsetting those generated by the Docks.
The Masterplan delivery will require careful traffic management due to future
anticipated increases in the number of employees at the Docks.
5.36 The Masterplan implementation will provide significant economic benefits,
though the impact of dredging on the environment will need to be minimised.
17 Royal Haskoning were commissioned to undertake a scoping study which was submitted in 2006. The scope of the EIA was approved by the Marine and Fisheries Agency and Royal Haskoning were
subsequently commissioned to undertake this work in 2007. The Environmental Statement was completed in July 2009. It included details of a proposal for relaying maerl as a mitigation scheme to offset adverse environmental effects of the proposal. There was ongoing consultation with relevant
interest groups and authorities during the development of the EIA.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 25
The cost of dredging is high as a result, however the economic benefits exceed
all costs identified.
5.37 In terms of the impact on the local community Falmouth is a strategic location
in Cornwall: a unique place with unique environment, history, and communities.
It has been chosen as a location for the Combined Universities in Cornwall,
which will assist in safeguarding its vibrancy and will help to restructure its
economy. Falmouth Docks have always played an important role in the town‟s
evolution and are one of the key economic engines providing jobs in the
Falmouth and Penryn area. The development of the Docks coupled with its
strong links with the education sector would further support the growth of local
communities in the long-term.
Funding and Delivery
General
5.38 The Masterplan process has established effective working between the key
public agencies and businesses at Falmouth Docks, and provides a platform for
delivery. The Masterplan itself provides a physical strategy for development
which will make the most efficient use of existing assets and investment
opportunities which can maximise the economic potential of the total site. With
the continuing development of human capital and investment on the scale
envisaged by the partners in POFDI, delivery of the Masterplan proposals can
be realistically anticipated if the partners continue to work together to co-
ordinate proposals and if they each continue to progress the proposals or
actions within their individual remit.
5.39 During the process of preparation of the Masterplan each of the main
businesses – A&P; Pendennis Shipyard; and Falmouth Petroleum Ltd.–
expressed strong commitment to the future operations and investment in the
Docks, and brought forward proposals for development which are now
integrated through the Masterplan. It is important that this integration is
maintained, to maximise the potential for each of the businesses alone and for
the Docks as a whole. It is also important that all of the partners to POFDI,
particularly the public sector agencies, apply their various powers and resources
to assist the businesses in implementing their proposals.
5.40 It is therefore important that each of the partners formally adopts the
Masterplan proposals in principle and in detail within their business plans,
development plans and budgets. This should be requested through POFDI as
soon as possible, with the partners all signed up by the end of summer 2011.
5.41 The partners should then move to confirm and deliver a programmed
investment strategy for the Docks which provides confidence and mutual
support to maximise the economic potential and delivers development as soon
as possible.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 26
5.42 This process of continued joint working will require some level of support, co-
ordination and leadership, so it is proposed that POFDI should continue in its
present structure, but its processes and priorities be refocused on co-ordinated
delivery of key investment projects by individual businesses and agencies –
thus with an emphasis on communication and programming rather than
visioning and planning. The partners should jointly discuss and confirm how this
can be achieved.
Delivery Principles
5.43 Deliverability of the Masterplan thus depends on the following factors:
Investment of private funds by businesses to deliver various elements of
the Options
Commitment of public funds to support business investment and the
delivery process
Ability to obtain consents
Continuous partnership work within POFDI and wider stakeholders
Business Investment
5.44 The main business partners have all expressed their intention to invest in key
projects within their own sites. Each of the businesses will need to make their
own decisions about scale, priority and timescales for investment, but it is
hoped that they will continue to work to the timescales for delivery discussed in
2010/11. The total level of investment proposed within relatively short
timescales will imply an intense phase of construction work on the site, and it
will be important for the partners to co-ordinate with each other to minimise
potential conflicts and maximise value for money in contracts. They may wish
to consider using the POFDI process to assist in this.
5.45 It will be important to achieve a level of commitment to each of the projects
identified in the Masterplan as soon as possible, in order to build a funding
package of support from public agencies.
5.46 Dredging is critical to the delivery of particular elements of the Masterplan, and
also seen as fundamental to securing the long-term future of the Docks,
increasing the business performance at the Docks and securing a stable future
for the area. Without dredging the shiprepair sector is perceived as non-viable
in the long-term and therefore private investment will not be released - as
reflected in the „Do Nothing‟ scenario. A commitment of funds to dredging is
therefore a key to securing some of the business investment required, and it is
therefore essential that there is a continuing focus in the work of POFDI on
securing the overall funding package, which can help to release this programme
of investment.
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 27
Public Funding
5.47 There are several potential sources of public funding available to support
investment in the Docks; these potential sources of funding are as follows:
ERDF Priority 4 funds: the Convergence Programme Strategic Investment
Framework (SIF) had allocated c.a. £11 million of funding to Falmouth
Docks, indicating that this is to be established following the masterplanning
work.
Funding by Cornwall Council: the Council can fund economic
development projects and infrastructure projects through its own budgets
and through prudential borrowing.
Grant for Business Investment (GBI) is available for assisted areas.
Cornwall is a Tier 1 Assisted Area with the highest rate of public
intervention.
Regional Growth Fund (RGF) is a £1.4 billion government fund for
England that will operate until 2014. The deadline for bids is 1st of July 2011.
European Investment Bank provides loans to individual capital projects
complementing EU cohesion and convergence activities.
5.48 The following projects may need public funding:
Table 5.9 Phase I projects that can be supported by public funding
Schedule item Capital Cost,
£
Potential
funding source
Dredging of the main approach channel and deep water berth
£23,000,000 Cornwall Council
Port infrastructure package:
Sustainable Transport Package £2,000,000 ERDF
Northern and Queens Wharves merged and enlarged
+ berthing dolphin
£8,250,000 ERDF
New shiprepair workshops - 4,750 sq.m.+ 40% mezzanine levels
£4,000,000 ERDF
Remediation, capping, and car park over the former Eastern landfill site
£3,000,000 ERDF
Superyachts dock basin and new pier £10,000,000 ERDF
Enlarged workshop facilities at Dock No. 1 £1,500,000 ERDF
Additional superyachts workshops expanded to the east: 6,300 sqm
£2,500,000 ERDF
Port control building, and small workshop at Queens Wharf
£2,000,000 ERDF
CHP plant £3,000,000 ERDF
Total Port infrastructure package: £36,250,000
5.49 Potentially the above port infrastructure package could be eligible for ERDF
convergence funding. At 30% intervention rate this would provide £10.88
million of ERDF financing. As noted above, POFDI will need to work with the
Convergence Programme to define a package of funding for Falmouth Docks to
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 28
be sought from the Programme; it will also be important to consider the
timescales for bidding and delivery of projects, as time is now short in which to
implement projects of this scale within Convergence Programme limits.
Consents
5.50 A number of different forms of consent are required for these various projects,
of which two issues key are noted – the need for dredging consent, and the
issue of planning consents for development.
5.51 The issue of achieving consent to dredging is critical to a large part of the
Masterplan development proposals. The lead partner is the Falmouth Harbour
Commissioners, and it is important that the POFDI partners work closely with
FHC to progress any processes which are now required to make the case for
dredging and to support necessary submissions by FHC.
Delivery
5.52 The Masterplan will thus be delivered by individual POFDI partners and Docks
businesses and with the support of FHC.
5.53 The delivery of the Masterplan is phased with Phase I covering immediate
requirements for port infrastructure upgrade at the Docks. Potential Future
Projects will provide additional employment space, new Western Wharf, and
new workshops to satisfy growing demand associated mainly with renewables
sector. Phase I is expected to be completed by 2015, and can thus take
advantage of Convergence Programme support – if the investment proposals
can be kept on track. It is crucial that the dredging of the approach channel is
carried out as soon as possible to enable business growth at the Docks and
therefore unlock investments into Potential Future Projects.
5.54 We envisage the role of POFDI gradually diminishing as Phase I is completed
and the further development projects slot into place. It is important however
that priority is maintained to the work of the Initiative, and that all the key
stakeholders continue to work together to integrate their actions as far as
possible.
Conclusions and Recommendations : Short-term Actions/Quick
Wins
5.55 In order to achieve the most effective delivery of the Masterplan, a number of
actions should be completed as soon as possible (Summer/Autumn 2011):
Confirmation of the final Masterplan following discussion between POFDI
and consultants
Adoption of the Masterplan by Cornwall Council for planning and
budgetary purposes; and commitment of funding to implement dredging
(this will entail a variety of related actions including confirmation of the
consent process with FHC and work to obtain consent; and negotiations
with Docks owners to confirm the nature of their relationship re funding
Economic Impact Assessment of the Masterplan Options
Final Report: Summary | June 2011 29
for dredging – however the principle of CC funding should be confirmed
as soon as possible)
Formal adoption of the Masterplan by all POFDI partners as part of their
business planning and budgetary processes and confirmation to POFDI of
each partners investment intentions
Confirmation of the continued work of POFDI, based on the now agreed
Masterplan, and preparation of a new work programme for POFDI
focussed on delivery, to include early work on:
o Confirmation of projects and timescales, to form a delivery
programme and defined responsibilities
o Identification of an investment programme based on the above
investment principles and strategy, with a particular focus on
defining a “Port of Falmouth Funding Package” comprising
Convergence Programme alongside CC and private sector
investment.
o Confirmation of FHC (and Docks‟ owners) approach to obtaining
dredging consent and work programme/process to achieve this
o Further detailing of proposals for various development projects
within the Masterplan, including for the gateway area, the
superyachts basin and workshop proposals, Falmouth Petroleum
Ltd. facilities, etc. (responsibility of individual businesses, to be
presented to POFDI as soon as possible/progression with CC/etc).
5.56 If these actions can be completed through summer/autumn 2011 and thus a
confirmed approach to delivering all early projects is achieved by the end of the
year, there is a possibility of achieving all of Phase 1 by the end of 2015. It will
require focussed and co-ordinated effort by all of the partners and the support
of Cornwall Council in the various ways identified.
5.57 It should also be noted that the proposals have achieved a good level of
support from the wider community of residents and businesses in Falmouth.
The proposals will yield substantial benefits for the area in a variety of ways,
and it will be important to maintain that level of support by continuing to
communicate the benefits being achieved and engaging with residents and
businesses in the area.
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