P&O's port proposal gets conditional okay from government |
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Fri, 22 Jul 2005 07:05
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LONDON: The British government has given a conditional approval for the 1.4 billion-pound London Gateway project in Thurrock proposed by Peninsular and Oriental Steam Navigation Co (P&O). Transport minister Derek Twigg said Wednesday he was "minded" to approve the project if P&O met certain conditions.
P&O has submitted the ambitious plan, which will see the setting up of a world class container port, the largest in Britain, and an adjoining business park. The project envisages creation of some some 16,000 plus jobs.
The port can initially handle one million 20-foot containers a year. However, when fully commissioned, it will be equipped to handle 3.5 million regular containers a year, and will be bigger than Felixstowe in Suffolk, the U.K.'s largest now.
Among the conditions put forth by the government is the one for P&O to ensure that the roads reaching the port are wide enough to handle the spurt in traffic. This will have to be done in conjunction with the the Highways Agency.
P&O has estimated that the port will cost around 700 million pounds, and an equal amount for the self-funding business park. The company has 175 million pounds in cash derived from the sale of its stake in Royal P&O Nedlloyd to AP Moller Maersk.
In addition to these costs, there will be expenses on account of building the road as well as payment to Shell, which owns the 607-hectare Thurrock site. Shell, which has stopped refining activities at the site, is known to have agreed to sell it to P&O once the project gets an approval. Shell is also keen to be a joint partner with the ports operator in running the business park.
The government has given P&O three months to come up with confirmed proposals.
P&O chief executive Robert Woods said, "There is a national need for more container terminal capacity in the U.K. London Gateway Port will ensure that this requirement is met for at least the next 10 years."
The port is expected to make up around 10 per cent of P&O's total port capacity in the next decade.
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