The  £72.676 million budget allocated to the Liverpool ferry terminal of Prince Half-Tide Dock has been fully exhausted. Contractors are being negotiated upon commercially to determine the actual price. The Isle of Man Government acknowledged that all the approved construction funds  £70.676 million core capital and  £2.12 million inflation reserves had been fully drawn.

In June 2024, the terminal was opened to boost maritime connections between the Isle of Man and mainland UK. It modernizes ferry services and at the same time offers a long term operating base to the Isle of Man Steam Packet Company. Nevertheless, construction delays, the impact of the pandemic, as well as design complexities were strong contributors to cost over the life cycle of the project.

Initially, the scheme was estimated by the authorities to an tune of  £38 million. However, significant work was necessary in further design and difficult conditions of site. The building program was complicated by marine infrastructure works and dock integration. Besides, there were structural reinforcing and compliance requirements which led to further delays. There were also cost projections affected by inflation, and international supply chain demands during the COVID-19.

Budget Escalation Scope on Liverpool Ferry Terminal and Project Close-Out

Accounts have remained open to the project authorities to solve contractual issues effectively. The amount of the final figure is not confirmed, but the outturn cost is likely to be higher than the initial amount of £72 million. Reconciliation process authenticates the work done, approximates variations and closes reference to additional payments and recoveries.

The terminal was built in an active dock, and the coordination of the construction required a gradual transition with the already running maritime traffic. Marine projects are hazardous since tidal boundaries, geotechnical factors, as well as the integration of the project with the established port infrastructure are at risk. According to industry analysts, the long-term nature of the projects makes long term projects very sensitive to inflation and scope alterations.

Since the time it opened, the facility has provided a new passenger terminal, freight handling and docking facilities. The technical tests are still in progress to determine the compatibility of the vessel in the different tidal conditions. Any necessary changes by the engineer will be processed under the larger project close-out system.

Lessons and Strategic Insights of Procurement

The project reveals the significance of contingency planning in marine infrastructure projects that are funded by the government. Initial cost estimates were done on the basis of constant market conditions. Nevertheless, the pressures of inflation in 2020-2023 impacted capital intensive projects in the UK and Europe.

Even after the budget raise, the authorities consider a terminal a maritime resilience investment in the long term. It will last 30-50 years, which will serve passengers and freight, which is essential to the economy of the Isle of Man.

Project Factsheet: Liverpool ferry terminal budget

• Country: Isle of Man
• Place: Prince half-tide dock, Liverpool, UK.
• Sector: Maritime transport infrastructure.
• Name of project: Liverpool Ferry Terminal.
• Initial preliminary estimate:  £38 million.
• Capital budget that is approved: £70.676 million.
• Inflation allocation £2.12M.
• £72.676 million of overall approved funding.
• Status of the budget: Exhausted.
• Final outturn cost: Under consideration (subject to contractual reconciliation)
• Owner of the project: Isle of Man Government – Department of Infrastructure
• Status of operation: opened June 2024.
• Risks of critical nature: Marine construction complexity, exposure to inflation, contractual variations.
• Strategic goal: Long-term maritime connectedness and modernized ferry operations.