Shetland set to back £1.5bn plan to connect islands with undersea tunnels

A significant story is unfolding on the international scene. Shetland set to back £1. 5bn plan to connect islands with undersea tunnelsImage source, Estunlar. foImage caption, The Faroe Islands serve as the inspiration from the Shetland tunnels projectByJames Cook, Scotland Editor and John Johnston, Scotland, Reporting fromLerwickPublished29 June 2026Updated 2 hours agoUndersea tunnels connecting some of the UK's most northerly islands could be in place within eight years, under plans expected to be approved on Tuesday.

A feasibility study for Shetland Islands Council proposes replacing ageing ferries with tunnels from Shetland's mainland to Yell and from Yell to Unst, describing them as "economically transformative". Two more tunnels, to the islands of Whalsay and Bressay, could follow under the plans, which are estimated to cost £1. Council leaders say the tunnels would be cheaper than building new ferries and replacing harbours.

The Details

The council is expected to explore funding from a mixture of private investment, public subsidy and borrowing, along with tolls covering maintenance costs. The undersea tunnel network that could transform Shetland's fortunes Published15 July 2025The council's transport chairperson, Moraig Lyall, said the report showed there were no technical barriers to building tunnels, which would be "cheaper in the long run" than ferries. The council currently runs ferry services to nine islands, carrying around 750,000 passengers each year on 12 vessels at a cost of £23m per year.

Image caption, Moraig Lyall says tunnels which would be "cheaper in the long run" than ferries. Costs have risen sharply in the past decade, with some routes struggling to meet demand for vehicle places. Lyall said: "The system we have that has served us well for decades is now no longer able to do that.

"It doesn't have the capacity and we're struggling with other things, like the ability to crew the system adequately. "These barriers to giving the islands a really good service are not going to be easily overcome by replacing ferries with other ferries. "The tunnel is the answer that we believe will help us solve these problems.

What Experts Say

"Image caption, Boat builder Brydon Barclay said a tunnel would be transformative for his businessUnst is the UK's most northerly island and home to the UK's only spaceport, at Saxavord, as well as a sizeable aquaculture industry. The feasibility study says tunnels could boost direct economic activity related to the spaceport as well as spin-off benefits such as other aerospace industrial development and tourism. It says tunnels would improve the rocket facility's "competitiveness, efficiency and scope for growth" as well as improving access to labour for island businesses.

Boatbuilder Brydon Barclay of Fluggaboats on Unst predicted a tunnel would transform his company's prospects. "It's absolutely essential," he said. "At the moment, we're running with a ferry service that just isn't meeting the demand at all.

The story has become one of the most prominent items on the global agenda.