Crunch time for the Highlands Green Freeport as up to £28 billion of investment rests on a successful business case
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The stakes could not be higher for the Highland Green Freeport with up to £28 billion in ScotWind offshore wind power up for grabs, £3.5 billion in investment that would create more than 10,000 local jobs resting on a successful business case
The development of those plans is the most decisive phase for the Inverness and Cromarty Firth Green Freeport which – if successful – would see it come into full operation around March next year.
With failed freeport bids in Aberdeen and Glasgow as well as foreign competition breathing down its neck, the Highland freeport must now clear the last remaining hurdles to acquire full status recognition.
Freeport chief executive Calum MacPherson says it is essential to get that full recognition just to be “at the ball game” as the interest of those looking at investing is “predicated” on the tax relief provided by being a freeport.
He went on to say the company has to make the most of this “once in a generation opportunity” to arrest near catastrophic population decline with the Outline Business Case set to be presented to the Scottish and UK government.
To underline its importance Highland Council – which is the “accountable body” for the public funding aspect of freeport – staged a special full meeting to hear from Mr MacPherson and considered the business case.
Mr MacPherson said: “First of all, some of you will be aware of the opportunity through ScotWind but it is worth just restating – around 20 projects which have already seen approval out in the North Sea.
“Each of those has been pursued vigorously by private operations and consortiums and the spend, estimates vary, but at least £28 billion or that order.
“The UK government has been on the front foot this time and is seeking to ensure that 60 per cent of the spend relating to that £28 billion happens in Scotland and the UK.
“So there's an estimated £1.4 billion of investment for each of those projects translating to about a billion pounds of investment per gigawatt.
“The scale of the opportunity out there is significant and these are not entirely hypothetical numbers, I might add – there are businesses out there right now spending millions of pounds to pursue this work.”
But he added: “A number of those involved told me this makes the difference between something being viable and not viable. Indeed, a number of those who have already expressed an interest have said their interest is predicated on us achieving freeport status.”
Translating that into what it means on the ground, he said: “And as a headline, we're looking at over the next 25 years being in order 16,000-plus jobs created but 10,250 of those in the Highlands, not just in the Moray Firth but in the Highlands.”
That breaks down at around 9800 within the designated freeport area (Nigg, Port of Cromarty Firth, Port of Inverness and Ardersier), a further 450 across the Highlands as a whole, 4000 in the rest of Scotland and 2000 in the rest of the UK.
“In job creation terms we've gone through a really rigorous process as to how they've been derived,” he said. “We have spoken to individual landholders, individual sites, individual businesses and asked them to predict for the next 5-10 years what they anticipate being created.
“We hope they will, those will be exceeded but we've been extremely prudent in what we have presented because believe me, once we submit our own business case and move on to the financial business case, our colleagues at Treasury and other places will be going through this with a fine tooth comb.”
The cash flowing into the Highlands over the next quarter century is set to be significant: “Private investment will be significant at £3.5 billion over the next 25 years and for some of those who might think that number is extremely high, as I initially did and questioned it, if you sit back and look up the investment, it's going to happen in each of the sites and start breaking it down, it's actually not fanciful figure and it's founded in fact.”
