Port of Southampton

Steve Brine Excerpts

Wednesday 18th January 2012 Westminster Hall

[Mr John Denham (Southampton, Itchen) (Lab)]

I am grateful to Mr Speaker for granting this debate quickly, which, as will become clear, is appropriate. There are pressing issues facing the future of the port of Southampton that have to be resolved literally in the next few months if the full future of the port is to be secured. I am grateful for the strong and cross-party support here today from hon. Members from across Hampshire and the Isle of Wight.

May I say briefly that there is another issue about the future of the port of Southampton, which relates to investment in the cruise terminal and an application by Liverpool for a cruise terminal? That is not the subject of my remarks today. The arguments are well rehearsed, we believe in fair competition and the Minister is due to make an announcement on this in the fairly near future.

I want to concentrate on a different issue that is of equal importance to the future of Southampton and, in this case, critical to the future of the container terminal there. The debate has huge local, but also national, significance. Frankly, it presents a rare opportunity in the current economic climate, because a private sector company, Associated British Ports, is offering—indeed, is desperate—to invest £150 million of purely private money in infrastructure in the coming year. That investment is not just important for Southampton; it is vital for the infrastructure of UK plc. A study for Marine South East estimated that the contribution of the port of Southampton to the UK’s economy was £1.75 billion a year. Southampton is the fourth largest port in the UK, and the container terminal, operated by DP World, employs approximately 1,000 people. It is estimated that four jobs in the wider local economy are dependent on each of those jobs in the terminal.

Currently, most investment in UK infrastructure depends on public money for pump-priming, partnership and initial investment. However, ABP’s planned investment in Southampton is entirely private—it does not depend at all on matching investment. That is such good news that one might wonder why we need to have a debate in Westminster Hall. The problem is that over several years the project has suffered from entirely avoidable delay—mainly, it has to be said, at the hands of Government agencies, and partly due to the action of rival port operators who have exploited mistakes made by the Government machine to mount a legal challenge that is not in the public interest, but is purely to pursue their own commercial, competitive advantage.

Hon. Members from Hampshire and the Isle of Wight have come together today to urge the Minister to do everything he can, with his colleagues across Government, to ensure that there are no further delays. I am grateful for the briefing I have received from ABP, DP World and Unite, the union. All have exactly the same position on what needs to be done. Even in the days since requesting the debate, there has been some progress, but the project is so time-critical that any further slips, delays or mishaps—anyone taking their eye off the ball—could do immense damage.

Let me set the scene and the history. As I have said, the port is immensely successful. Productivity is high and Southampton is in the right geographical location for China and other south and east Asian trade, but the container business is changing. Some 13 years ago, the typical vessel was 4,000 TEUs—twenty-foot equivalent unit, which is the standard measure. Recently commissioned ships already in service are typically 9,000 to 10,000 TEUs, but in the next two years, ships as large as 16,000 TEUs will come into service. This is happening right across the industry with all the major carriers, and it certainly applies to Southampton’s major customers: the CMA CGM organisation and the G6, an alliance of Hapag Lloyd, OOCL, NYK, APL, MOL and Hyundai Merchant Marine. They have come together precisely to optimise the deployment of new and larger vessels.

Southampton can accommodate the larger, super-sized container ships if—but only if—it can reconstruct its existing container berths, known as 201 and 202, and carry out more extensive dredging both nearer the berth and the wider channel. That is what gives rise to the £150 million investment at the heart of the debate. Those ships are coming into service now and in the next two years, so the investment is time-critical. The risk is obvious—if there is any further delay and Southampton cannot offer its customers the capacity they want, business will be lost.

[Steve Brine (Winchester) (Con)]

I congratulate the right hon. Gentleman on securing the debate, which is as important to my constituents as it is to his and to those of other hon. Members here today. He rightly says that any further delay could be fatal. Will he confirm that the September 2012 to March 2013 “piling window”, as it is known, is the critical date window that we are tied to here? Any further delay would result in an additional 12-month delay in doing the work that is needed out in the channel.

[Mr Denham]

The hon. Gentleman is absolutely right, and I will explain the reason why that September to March period is so critical. For entirely legitimate environmental reasons, that activity cannot take place all year round, so we could miss that deadline. As I will say in a moment, contracts need to be let ahead of September if work is going to be started in September—that is critical. If it is not done by next year, the port clearly will be unable to offer the capacity it would like to for the latter part of 2012 and, in particular, 2013.

This debate should not be necessary. The need for investment was identified in a scoping study submitted by ABP to the Marine and Fisheries Agency, the predecessor of today’s Marine Management Organisation, in 2007—in what most people regard as perfectly good time to get the necessary approvals and to get the work under way. In January 2008, following consultation with various bodies, the MMO issued a formal scoping opinion that advised ABP of the scope and content of the required environmental impact assessment. That point is crucial, because not for the last time in this process, ABP was advised and directed to take a particular course of action, and it complied fully. ABP submitted its application on 15 December 2008. The applications were advertised using a form of words directed by the MMO. In February 2009, issues were raised in consultation by Natural England, the Environment Agency and the Royal Society for the Protection of Birds and, I understand, successfully resolved. However, in December 2009, nearly two years after the MMO’s original scoping opinion, the MMO then decided that the public notice it had supplied was incorrectly worded. ABP was asked to place further public notices, using replacement wording supplied by the MMO. That mistake delayed the process by a full 10 months. It is worth noting that Hutchison Ports, the operators of Felixstowe, did not raise any objections during the original consultation. However, following the re-advertisement and during the second consultation, it then did, arguing that the original environmental impact assessment, which was drawn up to the MMO’s specification, had not considered operational impact issues.