Shetland Plans £1.5 Billion Undersea Tunnels to Connect Its Islands

Shetland Islands Council has voted to study building four subsea tunnels to connect its remote archipelago, a project valued at roughly £1.5 billion. The council will also develop a 30-year funding plan to figure out how to pay for it, according to the Financial Times.

The four tunnels would connect: the main island to Yell, Yell to Unst (the northernmost inhabited island in the British Isles), the main island to Whalsay, and the main island to Bressay. Together, this would cost around £1.5 billion — one of the biggest infrastructure projects currently planned by a local authority in the UK.

Why These Tunnels Matter

Each crossing solves a specific problem. The Yell-to-Unst tunnel would replace a chain of ferries — meaning residents and businesses could drive across instead of waiting for ships. Right now, that journey costs time and money. The Whalsay and Bressay tunnels would help two of Shetland's most populated outer islands, where the fishing industry, schools, and supply chains all revolve around ferry schedules.

For Shetland's roughly 23,000 people, fixed links would remove one of the biggest barriers to getting jobs, moving around, and accessing public services. Ferry costs are high, both for the council that pays to keep them running and for the people and businesses that schedule their lives around them.

How This Compares Elsewhere

Subsea tunnels connecting island chains already exist. The Faroe Islands built 11 kilometres of tunnels over two decades, with the Eysturoy tunnel opening in 2020 to connect five islands without any ferries. Norway's western fjord towns have used the same approach since the 1990s. What makes Shetland different is the money question.

The Faroe Islands and Norway could draw on their national governments' budgets to pay for these projects. Shetland Islands Council is a local authority — closer to a city council than a country. The council will have to negotiate with the Scottish Government and possibly the UK Treasury to find the money. That fundamentally changes how the project can be structured.

The Funding Puzzle

The council's decision to commission a study, made in June 2025, followed an earlier planning update from September 2023 that already favored these four tunnels over other options. The time in between was used to develop a stronger case.

The choice to plan for 30 years of funding is strategic. A long-term capital programme — spreading costs across decades in stages — works better with UK infrastructure funds, the UK Infrastructure Bank, and Scottish Government grants than asking for all £1.5 billion at once. The feasibility study will also test whether private financing could work: for example, investors funding the tunnels in exchange for tolls or a share of the ferry savings that would result.

Whether any of these funding combinations could actually work is what the study needs to answer.

The Technical Challenge

Here is where geography becomes a constraint. Shetland sits about 170 kilometres north of mainland Scotland. The seabed, tides, and construction conditions are harder than in a Norwegian fjord, where contractors have experience and equipment already in place. Building tunnels in remote, cold northern waters adds cost and schedule risk — and the feasibility study will need to measure those carefully before any responsible financing plan can be designed.

The broader context here is that Shetland is trying to solve a real problem — ferry dependency — with a solution that exists elsewhere but has never been tried in these particular conditions. The council is taking the right first step: commissioning engineers to see what this would actually cost, where the money might come from, and whether the numbers work. Everything that follows depends on what they find.