The post you are reporting:
The letter from the DfT rejecting the proposed DHB transfer scheme states:
"The Secretary of State has decided not to confirm the transfer scheme from the Board. He reached this conclusion taking into account his published policy. He concluded that the transfer scheme proposed would not ensure a sufficient level of enduring community participation in the port. He also concluded that in so far as the Board made the application in order to be able to obtain the additional finance necessary to undertake the proposed redevelopment of the Western Docks, there were other options available to secure that redevelopment."
The main objection is therefore to the insufficient level of enduring community participation. DPPT can be congratulated for introducing this element as it has not been taken in consideration in previous privatisations - for example, the ten ports owned by Sealink plus their entire fleet of ships were flogged off lock, stock and barrel for a fraction of their value to foreign buyers and there was certainly no consideration of community obligations.
The additional objection was to the entire premise behind DHB applying for the transfer in the first place, which was to access additional finance to build T2. The DfT states that there are other options available to secure this redevelopment. These include, inter alia, landlord tenant schemes whereby port operators lease areas of the port from DHB and pay for the developments themselves, or a special purpose vehicle company which would develop T2 as a separate enterprise.
The seemingly obvious option would be for DHB to fund T2 from its own resources. This was the expressed intention when T2 was initially proposed and remained so for a couple of years. It was only when anticipated costs rose from £300m to £400m that DHB said that they needed outside finance. This was to be able to build it in the timescale envisaged to accommodate the explosive growth in freight traffic being projected at the time. Then the recession hit and freight levels fell instead of growing exponentially. Any requirement for T2 receded into the distant future giving DHB all the time they needed to accumulate the additional funds required. To this end, they had already put by £60m at the time of the judgement.
Whilst all this has been dragging on, DHB has expended large sums on progressive development of the Eastern Docks, with all the piers being extended to accommodate the largest ferries in existence or contemplated. This future proofs the Eastern Docks for many years to come eliminating the need for T2 for another decade, if ever. The much larger ferries which have come into service in recent years reduce the number of ferry movements and solve one of the principal problems cited by DHB as necessitating construction of T2, that of the number of ferries that can swing off the end of the berths in the Eastern Docks in any given time scale.
The massive Traffic Management Improvement project currently under way, with the demolition of legacy passenger infrastructure from the heady days of Duty Free and replacement with additional traffic lanes and a temporary freight holding area will further facilitate the handling of outbound freight in the same way that the construction of the Dock Exit Road expedited the passage of inbound freight.