‘Blue wall’ mayor bids to create a super-port
Tees Valley mayor Ben Houchen aims to absorb PD Ports' vast Teesport container gateway into the freeport zone
The Tees Valley mayor Ben Houchen is in talks with ministers and Middle East investors over a deal to create a new super-port and “level up” Britain’s former industrial heartlands.
Teesside is already set to become the largest freeport in the UK, after winning the new tax-friendly status to encourage investment and jobs in March’s Budget.
Some 4,500 acres of land including the former SSI steelworks is now owned by the South Tees Development Corporation (STDC) chaired by Mr Houchen, representing the biggest regeneration project in the UK.
But the mayor, who is seeking re-election next month, is now mulling an audacious takeover of PD Ports, currently owned by Canadian fund giant Brookfield. Mr Houchen aims to absorb PD Ports’ vast Teesport container gateway into the freeport zone and spur further investment.
Mr Houchen - a key ally of Boris Johnson in the so-called “blue wall” that helped deliver his resounding General Election victory - is understood to be in early talks with Downing Street and the new Office for Investment headed by Lord Grimstone over the possibility of buying PD Ports, whose major asset is the Teesport facility.
The move could be backed by Abu Dhabi based sovereign wealth fund Mubadala, which last month agreed a joint investment deal with the UK government which could see up to £5bn spent on life sciences, technology, clean energy and infrastructure over the next five years.
The senior source said: “One of the projects that we’re working on with Number 10 and Mubadala is the acquisition of PD Ports, and then to bring PD Ports into the wider ownership of Teesworks [the STDC] with various private partners, and then to turn the whole 4,500 acre site into a world-leading fully automated freeport with another £1-1.5bn worth of investment - to turn it into a brand new inward trade port into the UK.
“Bringing all of this together, it would probably make this the most advanced port in the UK with the investment from the Middle East.”
If realised, Mr Houchen’s ambitions would dwarf his previous £40m deal to take the region’s airport to public ownership - a key pledge when he was first elected in 2017 - after it was threatened with closure. Houchen said at the time that “international investment doesn’t arrive on a bus”.
PD Ports’ main asset is the Teesport site, which employs 700 people and handled 28m tonnes of goods last year. But it is surrounded by the STDC land with just a single point of access, a risk to the business as the wider regeneration project gathers pace and construction work begins elsewhere on the vast site.
Insiders said the access issue is hampering Brookfield’s efforts to dispose of the company after putting PD Ports up for sale last year with a rumoured £1.2bn price tag through investment bank RBC.
Several buyers are understood have looked over the business but are unwilling to proceed without a second access to the port. “They can’t sell the business before this issue is resolved,” the source said.
The problem has gained added urgency as US conglomerate GE Renewable Energy has committed to a major new manufacturing facility building giant blades for wind turbines, which should create 2000 jobs.
“There is one road in and out of the port but if we build a massive shed for GE there is no prospect of getting a second access,” the source said. The STDC has recently taken PD Ports to court to establish that the company only has one legal access.
The Department for International Trade refused to comment on “commercial transactions by independent parties”. Lord Grimstone, Brookfield and the STDC all declined to comment while Mubadala was approached for comment.
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