Reports that the Department of Transport is kick-starting a ports privatisation programme should be welcomed. There are currently over 50 Trust Ports, all steeped in history. Most are subject to legal complexity: a similar situation applied to the many former Statutory Water Companies prior to water privatisation in 1989.
Dover, a leading Trust Port, is effectively up for sale, with a tentative £300 million price tag. Obvious bidders include the French ports sector - given the heavy freight volumes between Dover and Calais - and other UK ports companies. In fact, apart from the publicly-quoted Forth Ports, which – though Scottish-based – owns Tilbury, most major ports are owned by private equity, whose shareholders place a high premium on their solid earnings. Indeed, the UK’s leading privatised ports group, ABP, was bought out by private equity in 2006 for an impressive £2.8 billion, partly due to its property assets.
At Dover, a local consortium is to the fore; whether it can prevail against the larger funds wielded by both French ports groups and private equity is doubtful. Other Trust Ports may be up for sale, including Blyth, Harwich, Milford Haven, Poole, Shoreham and Tyne. More generally, it is encouraging that the Coalition is pursing privatisation, both through the sale of High Speed 1 and by launching into the complexity of Trust Ports – experienced lawyers in this arcane area should expect heavy bonuses.
In the ASI’s recent publication, The Party is Over, it was estimated that £16 billion could be raised from privatisation sales – prior to any disposals of the Government’s bank shareholdings. The £1 billion earmarked from the sale of Trust Ports may need upgrading.
Given that the venerable Dame Vera Lynn of ‘the white cliffs of Dover fame’ has already set out her views about the planned Dover sale, is the process now underway?