Argyll and Bute Council (ABC) has announced that it will not be part-funding the creation of a yacht berthing facility in Oban Bay, following a review of the scheme's viability.

The local authority had earmarked £900,000 to help fund the project as part of the wider £30m CHORD programme, which aims to regenerate five towns - Campbeltown, Helensburgh, Oban, Rothesay and Dunoon. In September 2009, ABC commissioned consultancy AECOM to assess the viability of Oban Bay Marina's (OBM) proposals for the facility, which found a number of "challenges and uncertainties".

After OBM had been given the opportunity to revise its plans in light of the report, a second AECOM study was conducted on behalf of the council and uncovered "outstanding concerns over capital and revenue funding". In addition to the council's contribution, a loan of £800,000 from the Crown Estate would not cover an estimated funding gap of £898,000. AECOM also suggested income streams would not enable the venture to break even.

ABC leader and chair of the CHORD programme management board, Dick Walsh, said: "Their report into the revised proposal makes it clear that, in their professional opinion, the capital funding gap and annual projected revenue losses are such that this project is not financially viable. "Our decision has been based on a realistic assessment by AECOM of the commercial and financial aspects of the project both in the short and longer term. In this period of public sector austerity, we must base the decision on sound business principles."