UK-based passenger shipping company Steam Packet has announced an investment of £170m to improve the port facilities on the Isle of Man.

The company intends to allocate the funds on a range of services, including new vessels, port facilities and fare reductions, aiming for increased passenger capacity within a year, as well as introducing special offers and a new frequent traveller scheme.

The investment will also be used for two new vessels, and retaining the Ben-my-Chree vessel, in a bid to restore an all-round passenger and freight back-up for the fleet.

"If a new Strategic Sea Services Agreement, to guarantee services beyond 2026, can be reached this year we will bring forward our planned investment."

Committed to futuristic strategic sea services for the island, the company intends to extend the duration of their services beyond the scope outlines of the current user agreement, which ends in 2026.

Under the agreement, Steam Packet was authorised by the court of Tynwald to use the King Edward Pier linkspan, in return for their help in securing modern ships, market growth, competitive fares, and improved services. The extension of service is subject to an approval by Tynwald court.

Steam Packet Company chief executive Mark Woodward said: "Since the start of the user agreement there has been major private investment in vessels, much lower fares (halved in real terms) with improved offers and availability, and significant marketing each year to promote the Isle of Man.

"We want to consolidate these benefits and provide a platform for further investment and improvements in service delivery for another generation.

"If a new Strategic Sea Services Agreement, to guarantee services beyond 2026, can be reached this year we will bring forward our planned investment."

After the agreement is reached, the company will deliver the replacement vessels for the Ben-my-Chree and Manannan ships in 2019 and 2022 respectively, with the retention of Ben-my-Chree as the company’s permanent third vessel.

The vessel, MV Arrow will be retained as freight back-up until Ben-my-Chree is replaced, which is expected to add to capacity and self-sufficiency during the Tourist Trophy races, and the Festival of Motorcycling.

An increased passenger and freight capacity will cater to the needs of a growing population. A new frequent traveller scheme will also be introduced to benefit more passengers than the previous scheme, which was discontinued.

Another agreement will provide the company with access to extra revenue growth, above an agreed threshold, to fund additional low fare and marketing initiatives.

An agreed proportion of profits would be used to target specific potential growth areas of the visitor economy, or other initiatives aimed at increasing passenger numbers.

It also includes the restoring of a Manx RPI cap on standard fare increase; a commitment to formal service reviews every three years, and a promise to publish Irish Sea fare comparisons every year.