Associated British Ports

Procurement policy
Associated British Ports has no preferred procurement route, but much of its work is suited to a design-and-build form of contract.

The type of contract used depends on the project and even on different elements of the scheme. Contracts above the various thresholds detailed in the procurement regulations are advertised in the European Union's Official Journal for prequalification.

Current and future projects
Associated British Ports, the UK's major port group, has an ongoing investment programme. Investment fluctuates, as indicated in the tables above. Although investment fell to less than £60m in 2001, it has since picked up, with almost £40m invested in the first half of 2002.

Most projects tend to be relatively small in nature. For instance, recent projects include a cold storage expansion in Cardiff (£2.5m), a vehicle terminal in Southampton (£4m), and a timber storage facility in Hull (£600,000). However, with demand at ports increasing (container traffic grew by 13% over the first six months of 2002), investment is expected to increase over the next few years, and a few large schemes are planned. These include the redevelopment of port facilities in Teignmouth (£4m), refurbishment of a cruise terminal in Southampton (£6.5m), as well as a new QEII terminal in Southampton (£2m). ABP's major planned investment is a new £300m container port, also in Southampton. This is currently in the planning process, and a decision should be reached this year.

Essential information
Unlike many other port groups, ABP concentrates most investment on core activities, as opposed to non-core waterfront property development. Although non-core property development is seen as a growth area by companies such as Forth Ports and Merseyside Docks & Harbour, ABP is shedding non-core assets. It recently identified close to £200m of non-core assets for disposal, of which £150m have been sold.

ABP is concentrating its investment on core port assets, as it claims that these generate a higher return than property. Investment is only undertaken if it is backed by long-term client agreement and can generate a return of at least 15%. However, most property ventures that ABP has embarked upon have failed to generate that level of return.