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Cabinet – 21 August 2003

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Cabinet – 21 August 2003 By: Director of Planning Services Main Portfolio Area: Economic Development, Regeneration and Maritime To: Cabinet – 21 August 2003 Subject: GUIDANCE AS TO FUTURE OPTIONS FOR COMMERCIAL PORT AND PORT LAND AT RAMSGATE Classification: Unrestricted Summary: Authority is sought to appoint a specialist consultancy to advise Members on the economic viability of the Port and which will enable Members to decide on the basis of objective opinion as to the future course of action that should be adopted. For Decision 1.0 Introduction 1.1 Objective professional economic advice is required to enable Members to have a constructive debate as to the future of the Port and Port land. This report puts forward the initial steps needed to obtain that advice. 2.0 Financial Implications 2.1 It is likely that such a study will be essentially a desktop study by specialists in transport economics, supported by appropriate Development Surveyors. The likely cost of such a study is thought to be in the range of £30-40,000. 2.2 No budget provision has currently been made for this work. It will therefore have to be obtained from contingency reserves, if Members decide to proceed. 3.0 Background Information 3.1 Members have for several years struggled with the operation of the Commercial Port at Ramsgate. The current operation does not produce a profit; there is no immediate prospect of a second operator and Port fees are a constant contentious issue for the current operator. This against a background of forecast expansion in ferry traffic, but also of stiff competition and potential capacity expansion elsewhere, notably in Dover. 3.2 To enable Members to conduct an informed discussion as to the future of the Port, some objective professional advice is required as to the market conditions, the level of demand likely and the supply of capacity to meet that demand. 3.3 Alternatively, the Council has on various occasions considered the use of Port land for non-Port related development which would bring a substantial capital receipt and for the right mix of development would be likely to add to the regeneration prospects of Ramsgate. 3.4 In order to facilitate a constructive debate as to the development of a 5-10 year Business Plan for the Port and Port land, objective specialist advice is required. 3.5 Attached to this report Members will find a first draft of a potential brief to consultants which is the first step towards obtaining objective information as to the potential options - 1 - for inclusion in the appropriate Business Plan. The document is in draft form and is currently out to internal consultation to ensure that it addresses the issues which the Council wishes addressed. Risk Assessment 3.6 The Port and Port land make up the majority of the Ramsgate Renaissance landholding which is the core strategy for the regeneration of Ramsgate. Lack of clarity as to the future of the Port is detrimental to any form of development. At various times, Members have indicated that if the Port does not succeed, alternative development options will be pursued. However, that very lack of certainty as to future operations undermines the market potential of the site both for Port activity and for non-Port activity. 3.7 The development market requires a degree of certainty as to the Council’s future position in relation to this land and it is essential if that certainty is to be given that the Council must have an informed discussion as to future options and develop an agreed Business Plan for the immediate and medium term future that will give all developers certainty as to what they may expect. 3.8 Failure to have such a discussion and to produce a clear statement of intent is likely to undermine developer confidence and put at risk the Ramsgate Renaissance Strategy. 3.9 Objective professional economic advice is the cornerstone to such a debate. 4.0 Recommendation (a) Thanet Members accept the principle of obtaining objective professional advice as outlined above and in the attached brief; (b) that the draft brief be amended to take on board where feasible the comments of those to whom it has been copied; (c) that the Chief Executive be given delegated authority to approach a number of specialist consultancies as outlined in the brief to receive proposals to undertake the specified work; (d) that a budget of £30-£40,000 be agreed, the funding being obtained from contingency reserves. 5.0 Decision Making Process 5.1 This matter does involve making a key decision which has not been included in the Forward Plan. It is impracticable to defer making a decision because the delay would cause the report to miss the next Council Meeting and delay the process of obtaining advice to an unacceptable degree. 5.2 The decision recommended is in line with the Policy Framework but contrary the Budget approved by Council and must be referred to full Council for decision. 5.3 The decision of Cabinet is subject to call in. 6.0 Background Papers 6.1 None. Contact Officer: Mr R T Herron - Director of Planning Services – Tel: 577005 - 2 - DRAFT BRIEF TO CONSULTANTS OPTIONS FOR THE FUTURE OF THE PORT OF RAMSGATE SUMMARY The Council is seeking an objective view as to the economic future of the Port of Ramsgate (Commercial Port). Ramsgate currently offers a freight only service to Oostende, operated using five ships by Transeuropa. Over the past few years various discussions have been undertaken with a view to providing a second operator, currently without success. Freight traffic continues to increase steadily in line with the general growth in freight movement across the Channel. The land reclaimed for Port activity is also of potential interest for non Port related development to complement the marina and other activities of the Royal Harbour and to facilitate the economic regeneration of Ramsgate. The Council, therefore, seeks objective support to facilitate an assessment as to the options available and to enable it to decide upon which course of action to follow – to maintain the Port in full operation, in the expectation that business will improve sufficiently to both make the Port economically viable and, if successful, to contribute to the local economy, or, to seek alternative development opportunities (either in part or in whole for the site) which would bring a financial return to the Council and which will also contribute to the interest and character of the area and where the right development will contribute to the economic regeneration of Ramsgate. What is sought, therefore, is an objective, essentially desktop study to enable the Council to understand the background economics to current and future Cross Channel activities and the economic case for both options, (or for alternative options) which will facilitate the Council in the development of a business plan for the future of the Port and Port land. Consultants are required with expertise in market/economic analysis, preferably with an experience in looking at the shipping industry (or other similar transport industries); property market expertise, including valuation; financial and cost consultancy, and business planning. BACKGROUND 1. Ramsgate Port was created approximately 25 years ago. It is essentially constructed on reclaimed land to the west of the original Royal Harbour. During the 1980’s and early 1990’s it was UK Home Port to the Sally Line which ran passenger and freight services to Dunkerque and latterly to Oostende. At the peak it operated a throughput of 3 million passengers per year and ………… freight units per year. Sally/Hollyman (as it became) ceased operation in 1998? 2. As a result of the problems of vehicular access through the town of Ramsgate caused by the Port, a new Port Access Road was constructed following a Public Inquiry in 1997? The cost to the public purse was some £30 million. The road was justified on the basis of the traffic carried at that time and subsequent closure of the Sally/Hollyman operation and the introduction of Transeuropa has meant that the Port Access Road carries only a fraction of its traffic capacity. 3. The Council at various times has met with other operators with a view to expanding the Port operation to include a second ferry operator. Potential routes to Boulogne and Dunkerque have been examined by operators who, having spent considerable time looking at the prospects, decided either not to pursue the opportunity, or to operate from Dover instead. There is currently no additional ferry operator in view. - 1 - 4. The Port has developed limited additional capacity in aggregates and there is certainly the possibility of expanding this market. However, it is likely that in order to do so, further infrastructure investment would be required to create new alongside berthing facilities and aggregate handling facilities. This has a potential environmental consequence, particularly if other developments are contemplated in the Port area, ie residential/leisure use. In addition, whilst there is undoubtedly a future market in aviation fuel for Manston airport, that market does not currently exist and may not exist for some years depending on the level of future development of Manston Airport. Again, however, there are major environmental consequences to bulk handling aviation fuel in what is an environmentally sensitive location, which would have to be resolved if the operation is to become economically significant. 5. Recent market forecasts (most recently in the SEAPLAG study) indicate that there is substantial growth potential in both the freight and passenger market across the Channel. However, the Council is aware that any spare capacity is likely to be competitively sought by both the Channel Tunnel and the Port of Dover.
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