Setting the groundwork
Carly Fields examines the potential impact of Forth Ports’ heavy investment in infrastructure
UK port operator Forth Ports is at a critical juncture. It’s making heavy investment in infrastructure at two of its key hubs, one of which will be put into commercial operation before the year is out, testing its faith in the market need for a non-contract backed development.
The operator has ploughed £10m into heavy-lift capabilities at its Port of Dundee, to deliver what it claims will be the strongest heavy-lift quayside in Scotland.
Speaking to Port Strategy, Stuart Wallace, divisional director of Forth Ports, acknowledges that making an investment of that scale without a contract to back its development could be seen as risky, but it’s a risk that he is certain will pay off when it comes to servicing the burgeoning oil and gas decommissioning market in the North Sea.
Indeed, he describes the project as a “gamechanger”. “It’s a blended type of operation, building an asset that’s not just about decommissioning. It’s also about replacement and offshore wind.” The strengthened quayside – which will be ready by the fourth quarter of 2017 - has been designed to handle the largest offshore wind turbines currently in service.
Nearly 500 miles south, changes are also afoot. The consultation phase for Tilbury 2 – the £100m development of a port to support the existing Port of Tilbury on the UK’s east coast - is steaming ahead, with the non-statutory element already completed and the statutory process due to be completed before the end of the year.
Mr Wallace says that there was a good level of engagement from the public and the consultation didn’t throw out anything that the operator didn’t expect. There were the obligatory concerns on traffic volumes, air quality and noise pollution – all aspects that would be raised by the formal statutory consultation.
Now, Forth Ports is immersed in the process of collating, analysing and responding to those concerns. “We have to demonstrate that we have listened to and taken on board the feedback that we’ve had through this process,” says Mr Wallace. “We then need to feed it through to the final decision making process.
Spanning 152 acres and including a deep water jetty, Tilbury 2 is no small undertaking. “It’s almost like creating a brand new port; it’s a fundamental step change in our business to bring something like that to reality. It’s both exciting and daunting.”
Tilbury 2 has opted for the designated consent order route, meaning that the work is front loaded. Much needs to be done before the operator heads to the planning inspector in October 2017. “There’s a lot of man hours and pulling together consultants and external advice to get ready for that in October,” Mr Wallace explains. If everything goes to plan, it will be fully operational by 2020.
He is adamant that there is a need for the new port, pointing to growth at the existing Port of Tilbury and the opening up of DP World’s London Gateway. “It’s finding the right niche market, the right commodities and the right customers. We absolutely believe that demand is there going forward.”
From north to south, it’s the diversity of business model and cargoes that Mr Wallace believes gives Forth Ports a stable outlook for the future. “If you look at what we’ve got on the east coast, Tilbury is number one for forest products in the UK; number one for paper imports in the UK; a real strong hub for short sea; and with a new port coming along that’s going to be ro-ro and bulk handling. Then you go up to Scotland and you’ve got emerging markets like decommissioning, and Scotland’s biggest container terminal.
“It’s that variability and complexity across the business that actually works well in terms of what Forth Ports can offer.”
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