RE:
Government set to rescue £1.5bn Essex port scheme
04 September 2009
By Joey Gardiner
Dubai developer of Laing O'Rourke megaproject in talks to unblock London Gateway container port
The government is working up a rescue package to allow the stalled £1.65bn London Gateway container port scheme in Essex to get off the ground.
The scheme, which is being developed by Dubai Ports World (DP World), is one of the biggest building projects in the UK.
Sources close to the situation say the UAE port operator is also in negotiations with the European Investment Bank (EIB) about providing a loan to allow the scheme to go ahead. Work on site was due to start early this year, only to be put under review because of the downturn in global trade.
Under the terms of the planning permission DP World received in 2008, the company is required to pay for up to £500m of infrastructure, including channel dredging and improvements to motorway junctions in Essex. Much of this work must be completed before the first ship sails into the port.
It is thought the discussions with the government centre on whether infrastructure contributions, such as payments for roads, can be made in arrears.
One source said: "This is one of the largest inward investment projects on the table in the UK. Of course the government is looking at what can be done to enable the project to happen."
A separate source said: "Much of the discussion has been about reducing the initial infrastructure costs. How can the timing of contributions be rephased ? Do we need this bit of new road before the port opens for business?'
"his is one of the largest inward investment projects on the table in the UK
"
Source close to the talks
The scheme, planned on the site of the former Shellhaven oil refinery, will also involve the construction of the UK's largest business and logistics park.
The source also confirmed that there were "certainly discussions going on" with the EIB.
- A communities department spokesperson said: "We have a good relationship with DP World and are in regular contact with them. We'll continue to work with them to ensure the investment at Shellhaven goes ahead."
Mohammed Sharaf
CEO DP World
'Safety begins with teamwork'
Sent from my iPhone
Mohammed,
This came through a couple of days ago and was stimulated by ElB's two day due diligence visit at London Gateway last Thursday or Friday. As EIB is owned by the various European Governments just about all their activities are in the public domain to the extent that in a few weeks we have to publish a one page explanation of our discussions on the EIB website.
The comment to the journalist came from CLG (Communities and Local Government), quite separate from the Mandelsson / Davies side of HMG. In CLG's opinion the particular journalist is sensationalist by nature and has put one and one together and made three. Neither we nor CLG read anything more than this in to the article and we are hoping that it quietly disappears. Any hint of a "rescue package" from HMG that could be deemed to be unfair and anti competitive will have both ABP and HPH reaching for their nearest lawyer. We are finalising LOI's with the various HMG departments and these will all be in the data room for lenders very soon. We are not picking up any indications that any more will be brought to the table by HMG that we don't already have.
Simon