Written evidence from UK Major Ports Group
(TE 22)
1. SUMMARY
The UK Major Ports Group welcomes the Transport Committee's
decision to set up a new inquiry into transport and the economy.
It is our strong view that good transport infrastructure plays
a vital role in the development of the UK's economy. While ports
themselves are financed through private investment and do not
seek any financial help from the taxpayer, road and rail links
to and from ports are rightfully part of the publicly financed
national transport infrastructure system. The importance of these
international gateways was recognised in the Eddington report
and schemes to enhance capacity and remove bottlenecks should
continue to receive priority within what will inevitably be a
constrained Department for Transport spending programme. Our strong
view is that continued investment in connections to ports will
promote economic recovery, not hinder it.
2. ANALYSIS
UKMPG is one of two associations representing ports
in the UK. Our nine member groups handle over 70% of the UK's
international trade by volume, and therefore play a significant
role in supporting the UK economy and promoting exports. UK ports
are privately financed and do not seek any financial help from
the taxpayer. Annual investment in upgrading and developing port
facilities has been running at £200-300 million per year
and this will increase as several large development projects (which
have already received planning approval) are taken forward.
3. The ports sector gave a strong welcome to
the Transport Study by Sir Rod Eddington published in December
2006. We were particularly pleased to see the report's recognition
that, given the international nature of the UK's economy, good
links to international gateways such as ports were crucially important,
offered a high rate of return and should be a priority area for
future DfT investment. We were also pleased that the previous
Government acted quickly to implement Eddington's findings through:
- ¾ setting
up a new streamlined planning system for major infrastructure
projects through the provisions of the Planning Act 2008;
- ¾ putting
major ports at the centre of the strategic transport corridors
set out in the white paper "Delivering a Sustainable Transport
System", published in November 2008; and
- ¾ bringing
forward several major road and rail projects improving links to
ports under the Transport Innovation Fund, Strategic Freight Network
and accelerated Highways Agency programmes.
4. In 2008 the independent consultants Oxford
Economics carried out an assessment of the economic importance
of ports as part of a wider review of the UK maritime sector.
Their main conclusions based on 2007 data were that
- ¾ Ports
directly employ over 130,00 people and support a further 230,000
jobs.
- ¾ Ports
directly contribute around £8 billion to UK GDP and indirectly
generate a further £10 billion.
- ¾ There
are further unquantifiable benefits for instance enabling other
sectors such as fishing, marine aggregate dredging and offshore
oil and gas to operate as well as supporting a number of industries
based on or near port estates.
5. UKMPG considers that despite the recent economic
downturn, the economic realities addressed in the Eddington and
Oxford Economics reports have not changed. The UK continues to
be an economy which is more dependent than most on international
trade and ports remain central nodal points in that process. Indeed,
any rebalancing of the economy away from finance and services
to the export of manufactured goods would increase the role played
by ports. Secondly, in an increasingly carbon conscious world,
ports are key players in facilitating the use of the most carbon-efficient
transport modes, i.e. water and rail (over 50% of UK rail freight
now starts or finishes at a port). Ports are also important in
the development of renewable energy, particularly offshore wind
and biomass.
6. It is our strong hope that the new coalition
Government will continue to pursue Eddington principles in reaching
difficult decisions on the future allocation of public expenditure.
The private sector has shown confidence in the future of the UK
ports sector, with a major expansion of the UK's largest container
port, Felixstowe, now well advanced and initial development of
a large new port on the Thames at London Gateway now underway.
The Government should demonstrate similar confidence. Port-related
road and rail schemes tend to score highly in economic appraisal
terms even though the methodology used in DfT's NATA (New Approach
to Transport Appraisal) methodology does not yet take sufficient
account of the additional value generated by international traffic
movements. We trust that NATA will continue to be the basis for
scheme appraisal and that economically important freight projects
will not lose out to more politically attractive though economically
less worthwhile schemes.
7. UKMPG notes that as part of the Government's
localism agenda, regional spatial strategies are being abolished
and Regional Development Agencies are to be replaced by local
enterprise partnerships. We look to the Government to ensure that
economic priorities are secured through the successor arrangements
and that improving local road network links to ports will continue
to be an investment priority (including a commitment that transport
infrastructure improvements will be a priority area for the new
Regional Growth Fund). For their part, ports will continue to
work closely with local authorities and other key stakeholders
so that there is a good overall understanding of ports' future
development plans, bearing in mind the need to react quickly to
changing market circumstances. Port masterplans can have a role
to play here, though in line with Government guidance it will
be up to individual port authorities to determine whether in the
light of local circumstances masterplanning represents a good
use of time and resources.
8. At national strategic planning level, UKMPG
ports will continue to work closely with Network Rail and the
Highways Agency in preparing schemes designed to improve access
to ports. National road and rail links to ports are rightly the
responsibility of the state to finance (as is the practice in
all other EU countries). Expecting ports to pick up part of the
cost (other than for sections directly into ports which are for
the exclusive use of port customers) simply adds to the cost of
port development projects and reduces their comparative viability,
making them less attractive to mobile international capital.
9. We also hope that the Government will take
a positive approach to encouraging the development of coastal
shipping, which has the potential to become as important a mode
for commercial freight in the UK as the inland waterways network
is for the transport of freight in continental Europe (with around
a quarter of the port of Rotterdam's traffic now being transhipped
onto barges). Coastal shipping does of course have the benefit
of requiring relatively low infrastructure investment compared
with other transport modes and makes a positive contribution to
reducing carbon consumption (because shipping is the most energy
efficient way of moving goods) as well as reducing congestion
on the hard pressed national road network.
10. CONCLUSION
We hope that these considerations will be of use
to the Committee in its investigation, and look forward to updating
them as necessary when the results of the Government's comprehensive
spending review are published.
September 2010
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