Port rivals at loggerheads over plans for 'Gateway to the North'

A dispute is threatening to break out between two of Britain's biggest port operators over rival plans to develop new import terminals in the north of England to ease the pressure on the overcrowded road network of the South-east.

PD Ports, the owner of the UK's second-biggest port, Teesport, is promoting a £300m plan to build a deep sea container terminal on the Tees. It says the scheme, known as the Northern Gateway, would regenerate the North-east's economy by creating up to 7,500 direct and indirect jobs and take more than 1 million containers a year off roads in the South, reducing both congestion and pollution.

But Associated British Ports, the UK's biggest ports operator, is also working on ambitious plans for a major expansion of its facilities on the Humber involving the construction of a terminal in the Port of Hull which could cost more than £100m.

ABP has so far avoided giving specific details about what kind of goods the new facility at Hull would handle or how big it would be, although its chief executive Bo Lerenius has suggested it could handle a mixture of coal and containers.

Graham Roberts, the chief executive of PD Ports, said: "We can't see exactly what ABP has in mind. If it is not a deep sea terminal then it will not be a rival to our project. If it is, then it is unlikely that both schemes could get built."

The rivalry between the two companies is further complicated by the fact that PD Ports has already agreed to partner ABP on another container terminal at Hull which the Government has said it is "minded" to give approval to. The terminal will cost £35m to develop and will double the port's existing capacity, enabling it to handle 500,000 20-ft containers a year. PD Ports, has agreed to invest £12m-£13m in the project, known as Quay 2005, and in return will operate the terminal.

However, Mr Roberts said: "If ABP went ahead with the second terminal development it would be completely against the spirit of the discussions we have been having on Quay 2005. We have no interest in taking on the management contract for a terminal that could have a direct competitor built next door."

PD Ports wants all of the UK's northern port operators to present a united front in persuading the Government to veto any further terminal development in the south. ABP suffered a setback last year when a £600m scheme to develop a giant new container development at Dibden Bay near Southampton was refused planning permission.

PD Ports says that if planning permission for the expansion of Teesport was obtained by next spring then the giant new container terminal could enter service in late 2008 or early 2009.

Port industry sources believe that Mr Lerenius has begun talking up the idea of a second new facility in Hull to console investors after the Dibden Bay decision, which forced ABP to write off £50m.