'Eye-watering' £38m Portico investment at Portsmouth Port defended following criticism
A Portsmouth resident has criticised Portsmouth City Council for investing “eye-watering” amounts of taxpayers’ money into Portico Shipping.
At a full council meeting, James Gunston raised concerns over the council’s anticipated £38 million investment into the council-owned cargo handling business, located at Portsmouth International Port.
The council acquired Portico in 2008, but Mr Gunston argued that the company “has not achieved sustainable profitability” and currently owes the council £15.9 million in debt. Additionally, the council has forecast a cumulative investment of £38 million over the next 20 years, which Mr Gunston described as an “eye-watering” sum taken from “hard-pressed taxpayers”.
The report suggests the investment would make Portico more efficient, diversify its operations, and enable it to become profitable by 2031/32. Visit our newsletter page to sign up for free Portsmouth news and sport emails
Mr Gunston proposed transforming the 23-acre site into a technology hub, similar to Cheltenham’s Golden Valley development.
In response, Cllr Steve Pitt, Leader of Portsmouth City Council said: “Independent consultants have robustly reviewed Portico’s business, looking at all options for the best return on investment for the council.
“It was concluded that supporting Portico provides the greatest financial return over and above any alternatives, and is forecast to provide over £30m within the next 20 years.
“Portico’s business plan will be annually reviewed by the council to monitor the progress of investment.
“As a deep sea port and one of the UK market leaders for fresh produce, Portico plays a significant role in the industry.
“Issues concerning delays to the Border Control Post (BCP), impact on global trade due to recession and planning delays have impacted up to £12m loss of commercial enquiries.
“Our concerns are to provide the best outcome for council taxpayers and this comprehensive review from external experts has provided guidance that Portico is a vital organisation for the local, regional and national supply chain.”
The council approved an investment requirement of £20m over the next ten years, The funding will come from £1.9m from Portico’s existing loan facility, £13.6m from an increased loan facility, and £4.5m directly from the council for equipment, which will be leased to Portico.
The ten year investment is expected to return £4.4m at today’s value.