​Detective Sergeant Jason von Tunk, of the Portland police crime investigation unit, ​said emergency services were contacted at 2.50am Tuesday after a fire broke out at the Portland Claremont Holiday Village.

When police attended at the Garden Street caravan park they found a 23 foot Bruce Harris shark cat boat with twin 200 horse power Mercury motors was well alight.

The outfit is valued at $72,000.

"Initial investigations indicate that an electrical fault in the  front steering of the boat caused the fire. The boat was almost completely destroyed," he said.

"The Portland Country Fire Authority unit attended, extinguished the fire and made it safe. The cause of the fire is not suspicious."

Detective Sergeant von Tunk said the situation could have been far worse.

"The CFA is now suggesting that all boat owners check their vessels, including the outboard motors for leaks and similar safety issues," he said.

"This situation would have been extremely dangerous if the shark cat had been out at sea with a crew onboard," he said.