Harwich: Hutchison Ports objects to Liverpool subsidy concession

BOSSES at Harwich International Port are to object to a Government proposal to lift restrictions on a potential rival in the lucrative cruise trade.

Liverpool City Council has asked Ministers to lift a ban on its cruise terminal, operated by Peel Ports, being used as a start and finish point for cruises.

The bar on “turnaround” business was imposed by the previous Labour government when the facility on the River Mersey opened in 2007 after receiving nearly �18million of public money towards a total cost of around �20million.

It was restricted to handling “transit” calls, by ships in mid-cruise, so that it did not compete unfairly against privately-funded facilities at ports including Harwich and Southampton.

A request for the restriction to be lifted was rejected by the then government in 2009 but the city council has now made a fresh application, which the Department for Transport (DfT) has said it is minded to approve.

In a consultation document, the DfT proposes to require grant money totalling �5.327m to be repaid in return for lifting the ban, but the payments would be phased over 15 year which rival operators says would, on a discounted basis, effectively reduce the repayment to less than �3m.

An informal industry group calling itself the UK Cruise Port Alliance (UKCPA), claims that allowing Liverpool to handle turnaround business could cost the rest of the industry around �80m in the first year alone and argues that the public subsidy should be repaid in full if the restriction is to be lifted.

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The alliance estimates that a turnaround cruise ship visit can be worth as much as �2m to the home port, with local suppliers, hoteliers, restaurateurs and taxi drivers among those to benefit.

Harwich International, part of Hutchison Ports UK which also owns the Port of Felixstowe, is scheduled to handle 18 turnaround cruises this year as well as 10 transit calls.

Paul Davey, corporate affairs manager at Hutchison, said: “We are not a member of the alliance as such but we do have concerns, and we will be objecting to the suggestion by the Government that they are minded to alter the conditions attached to the grants the Liverpool terminal received.”

Jimmy Chestnutt, chairman of the UKCPA, said lifting the restriction without requiring the grant money to be repaid in full would be “a disgraceful misuse of public funds.”

He added: “Our concern is not about competition – it is about unfair competition.”