DP World's £1.5 billion (Dh9.66bn) bet on the London Gateway, the UK's biggest ports project in a generation, has appeared to pay off with all of its slots for shipping companies sold off a full three years before the port is even set to open. The Dubai-based global ports operator has signed agreements with five major shipping lines to serve the first two phases of its London Gateway project, according to Michael Moore, the senior vice president of commercial operations at DP World.
That leaves just one additional slot available for shipping firms when phase three opens around 2015, DP World said. The early signs of success must come as a relief for the world's number four ports operator, which has invested roughly one quarter of its committed foreign development funds into the London Gateway. One reason for its heavy investment into the new port, which is being built on the Thames River in Essex, some 50km from central London, is its expected big impact on UK shipping.
The first phase comes online in 2012, just in time to handle the additional demand generated by the London Olympics. Port capacity is at an all-time high. Major ports such as Southhampton and Felixstowe have never been busier, forcing secondary ports such as Tilbury, halfway up the Thames River to London, to pick up the slack. With local ports straining to handle the demand for imported goods, some shipping lines have even been unloading their larger vessels in Europe and making the last leg of the voyage to Europe on smaller feeder ships, DP World officials said.
"There is a looming capacity crisis," said Mr Moore, who called the current status quo in the UK, and globally, "utterly unsustainable." While infrastructure projects in the developing world may be hard to get off the ground due to a lack of investor confidence, adding new capacity in Europe and the Americas is often dogged by bureaucratic bottlenecks. The London Gateway project was first proposed more than a decade ago by Peninsular and Oriental Steam Navigation Company, which DP World purchased in 2006.
After taking ownership of the project, DP World finally received clearance to begin construction in May, and in August awarded a London-based construction firm a £400 million contract to build phase one of the project, consisting of three berths and a 1.2 kilometre quayside. When the port project is fully complete sometime between 2018 to 2023, it will be able to handle up to 3.5 million standard-sized containers and also contain a fully integrated logistics park.
The port aims to increase container handling efficiency by 50 per cent compared to existing UK ports. email@example.com