Portsmouth council-owned Portico lost £3.3m last year
THE COUNCIL is set to spend £3m on expanding its shipping company this year, despite making a loss of £3.3m in 2019.
Portico, which operates at Portsmouth International Port, lost £1.8m more than had originally been expected last year due to ‘loss of business and reluctant departure’ of fruit company Fyffes.
It had been expected Portico would be in the red for £1.5m, however, the total losses have been accommodated within the revised budget for 2019/20.
Within Portsmouth City Council's capital budget for this year £3m has been allocated for dredging work for the benefit of Portico and the port.
But council leader Councillor Gerald Vernon-Jackson explained how the authority needed to ‘spend money to make money’.
He said: ‘The dredging is needed for the cruise ships because if you're having bigger cruise ships coming in they will not be able to turn around.
‘We are spending money to make money. We are looking to triple the number of cruise visitors over three years.’
A further £3m was also spent recently by the council on a new crane for Portico.
A council spokeswoman said: ‘The crane is on loan to Portico and remains a council asset.
‘This has bought forward a planned replacement schedule and will mean Portico is one of the only UK ports capable of managing tandem lifts up to 250-tonnes, this mobile crane will secure the future for Portico as it offers existing and potential customers greater opportunity to handle large scale goods.’
This year's budget has predicted a £0.3m loss for Portico, which takes into account the departure of Danish shipping company Maersk that recently announced it would take its business to Southampton.
The spokeswoman added: 'Maersk's departure opens up an opportunity for prime slots which can be marketed on more favourable financial terms.'
Last year a £15m loan was agreed for Portico. However, the council confirmed Portico would only 'draw down' on its approved £15m loan from the council, if it underpins new agreements.
The full council budget will be discussed at a cabinet meeting on Tuesday, February 4 and then again at full council the following week.