The London Gateway project is to go ahead on the north bank of the Thames estuary, the port arm of Dubai World has announced.
DP World has decided to proceed with the delayed £1.5bn project’s “essential infrastructure” following its review of the development.
The decision followed a steep downturn in the global market and DP World’s financial problems. But while DP World said construction work would now begin, it added that development work would be kept under review.
“The board of DP World Limited has reviewed a number of options for the London Gateway project in light of the current market downturn and is pleased to announce it has decided to proceed with construction of essential infrastructure that lays the foundation of the facility,” said the group.
“DP World will continue to review the development of the port and park operations in line with market demand.”
The announcement comes after doubts were mounting over the deep sea container project as the financial crisis and recession hit.
The port is said to be part-funded by debt, but debt markets seized up amid the credit crunch and there were concerns that DP World was struggling to raise the necessary finance. The European Investment Bank (EIB) stepped in in November to offer a £300M loan.
The problems at DP World’s government-owned parent group Dubai World also rocked confidence.
Dubai World’s developer Nakheel stunned global markets in November after asking to delay payment on its debts, revealing the extent of Dubai’s financial troubles.
However, DP World said it bought the remaining 400ha of land for the London Gateway and Royal Dutch Shell’s remaining interest in the project for £136M.
It won planning permission for the development at the former Shell Haven oil refinery site at Stanford-le-Hope as far back as May 2007, after inheriting the project from P&O when it bought the group for £3.6bn in 2006.
The container port was originally planned to be ready for 2010, but work stalled due to the recession and credit crisis.
Thames Gateway is being designed as a national hub port for the UK, accommodating the world’s largest container ships and providing unrivalled shipping access for businesses to an integrated road, rail and sea network.
In addition to the major deep sea facility, London Gateway will also combine with Europe’s largest business park, with plans for 9.5 million square feet for distribution, manufacturing and hi-tech sectors.