AB Ports plans huge expansion

Associated British Ports, the UK's biggest ports operator, is seeking planning permission for a massive expansion of its container business in Southampton.

Associated British Ports, the UK's biggest ports operator, is seeking planning permission for a massive expansion of its container business in Southampton.

The idea is to add capacity of up to 2.5 million units a year to the existing one million units handled at Southampton. The investment, expected to run to hundreds of millions of pounds, would make Southampton one of the biggest container ports in Europe, rivalling Rotterdam.

ABP said the Dibden Bay development was needed to meet increasing demand for container shipping. International containerised trade is growing at about 5 per cent a year.

The company is also looking to accelerate the sale of its £675m property portfolio, which is mainly in the form of surplus land and warehousing, in order to concentrate on the core ports business.

ABP, which recently rejected a £1.1bn takeover approach from Nomura, the Japanese bank, expects to deliver the planning application to the Department for the Environment, Transport and the Regions in June or July. It is already talking to partners for the development.

Bo Lerenius, ABP's chief executive, said that the new container facility, across the river from the existing terminal, would be built after the company had secured customers.

He said that he planned to sign long-term contracts with two or three companies before starting the scheme. ABP may split the financing of the scheme with those customers.

The scheme was attracting a lot of interest, Mr Lerenius said. "I want this to be risk free for my company, with guaranteed income."

The company is also planning to expand its existing Southampton container operation, which is a joint venture with P&O, the cruise and sea transport group. At present it handles one million units - measured in 20ft containers - but this is likely to be raised to 1.5 million units annually.

The new facility, at Dibden Bay, would offer up to six berths, which would be tailor-made for customers, and provide 1,850 acres of quayside. The proposal is certain to go to a public inquiry, but if given the go-ahead, the first berths could be ready in 2004.

The scheme is expected to be accompanied by a major environmental programme to help mitigate the impact of the terminal on the countryside. For every two acres of port-related development, one acre will be used as part of the environmental package, which includes the creation of a mile-long inter-tidal creek for wading birds and other wildlife.

ABP will also build a series of hills to hide the terminal and its cranes from those who live in the area, and plant 280,000 trees. Mr Lerenius said: "There's virtually nothing we will not do to satisfy local concerns."