Businesses in the Northern Isles will benefit from further improvements to freight shipping serving the islands, Transport Minister Stewart Stevenson said today.

Mr Stevenson was commenting as he announced the award of a contract for a lift-on-lift-off (lo-lo) freight shipping service to Shetland Line (1984) Ltd, in a move aimed at securing freight operations for the islands.

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Stewart Stevenson said: "These freight services are absolutely vital to the Orkney and Shetland Islands' economies and I am delighted that we have managed to secure them for the next six years.

"This contract will bring many benefits to Northern Isles businesses, providing an efficient and effective shipping link for goods to be transported to and from the mainland."

The service requirement is for two round trips to Orkney and Shetland per week on the Aberdeen - Kirkwall - Lerwick route.

Up to a set limit, subsidy will be paid on each tonne carried. The amount of subsidy will depend on the level of usage, expected to be around £600,000 in the first year of the contract. The new contract will start from May 31 2008.

(GK/JM)