THIS week's announcement that work on the new deep- water terminal planned for Teesside has been delayed was perhaps inevitable given the current economic climate, but it is nonetheless hugely disappointing.
Much has been written about the importance of this project, not just to Teesside, where it was hoped to generate some 5,500 jobs, but to the whole of the North East and beyond.
It is particularly sad that this delay has occurred now, almost a year on from the Government granting planning permission for the landmark development in record time, which was a great tribute to the hard work that went into the project from the team at PD Ports.
Anyone who has visited the dockside in Middlesbrough recently cannot fail to have noticed the enormous new distribution centre that is being constructed by Tesco and which is due to open within the next couple of months. It quite simply dwarfs the existing centre owned by Asda which sits alongside it.
The sizeable investment by these two retail juggernauts is a massive vote of confidence in the ambitions of the PD Ports management to realise their dream of making Teesside an even better international gateway for freight destined for the north of England and Scotland.
The delay to the deep-water terminal is most certainly a damaging knock to the confidence that the Tesco and Asda developments had brought to the area.
Moreover, the uncertainty surrounding the ownership of PD Ports itself will also not help matters. It emerged this week that its Australian parent company Babcock & Brown is in "ongoing discussions over the sale of an equity stake".
However, it was reassuring to hear guarantees that there was no prospect of PD Ports being broken up as a result of this process, given the £300m of securitised debt within the business.
In our report yesterday, PD Ports group chief executive David Robinson was realistic about the challenges facing the deep-water terminal in the current economic climate, but he has nonetheless expressed his belief that it will still be open for business in 2013.
The company’s record of delivery on its pledges to date gives rise to confidence that this ambition will be realised. With this in mind, it would be nice to think that the extra 12 months could be used productively to ensure that the infrastructure improvements required to support the new terminal are put in place.
Improving the road and – in particular – the rail links to Teesside is essential if the value of the new facility is to be fully realised.
It is a point that PD Ports will no doubt be pushing home.
just a brief summary of PD ports.
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