Stagecoach has said that it now has in place a joint venture agreement with Bland Group and a combined £14million funding package as it moves forward with plans to establish a permanent hovercraft service across the Forth River.

The transport group said it had agreed heads of terms with Bland Group, the 200-year-old family-owned business who own Griffon Hoverwork Ltd, the world’s leading hovercraft manufacturer and Hovertravel, the highly successful hovercraft service that links Portsmouth and the Isle of Wight.

Under the agreement, Stagecoach and Bland Group would manufacture and operate the two hi-tech hovercraft required for a permanent service between Kirkcaldy and Portobello. Stagecoach and Bland Group will each inject £7million into the project.

The Perth-based transport group said it also supported a proposed passenger ferry between Burntisland and Granton and there was scope for both transport links.

Stagecoach said it expected to submit detailed planning applications to both Fife Council and City of Edinburgh Council before the end of the year. A series of consultation meetings will be held in the next few weeks with communities on both sides of the Forth in advance of the submission of the planning applications.

Brian Souter, Stagecoach Group Chief Executive, said: “We believe it is important to maintain the momentum behind the project and we are delighted to have a joint venture partner and significant private sector funding now in place.

“This is a further step forward in our plans. Securing planning permission is a critical element of the project and we will be looking to progress this while continuing our discussions on public sector support.”

James Gaggero, Chairman of Bland Group said “We are delighted to have secured a joint venture agreement with Stagecoach to operate a hovercraft service across the Firth of Forth.

“Our hovercraft have been sold to 39 countries across six continents, whilst our fast frequent service between Portsmouth and Isle of Wight serves more than 800,000 customers annually, and is a tourist attraction in itself. We look forward to working with Stagecoach and the planning authorities to introduce commercial hovercraft to Scotland and build on the successful trial in 2007.”

Stagecoach is seeking to operate two purpose-built state-of-the-art hovercraft on the route, with crossings every 25 minutes at peak times and an hourly off-peak service. The 150-passenger craft, which would be fully accessible for passengers with disabilities, would also be equipped with the latest propeller technology to ensure low operational noise levels.

The hovercraft would offer a fast journey time of less than 20 minutes. It would also be integrated with bus services on both sides of the Forth, including shuttle bus links from Portobello to Ocean Terminal in Leith and Waverley Bridge in the heart of Edinburgh.

An estimated 870,000 passengers a year are predicted to use the hovercraft link after it is fully established.

More than 32,000 passengers used the Kirkcaldy-Portobello trial Forthfast service in

summer 2007, with both

commuters and leisure travellers ditching the car in favour of an integrated hovercraft and bus journey from Fife to Edinburgh. Retailers on both sides of the Forth also reported increased footfall and sales during the trial, which was part-funded by SEStran.