LONDON: DP World Ltd reversed its decision to pull out of a UK government investment summit last Monday and is announcing a £1bil (US$1.3bil) investment in its London Gateway port that will create 400 jobs.
DP World chairman and chief executive officer Sultan Ahmed bin Sulayem will stick with the original plan to be part of the event, a person familiar with the plans said last Saturday, after threats last Friday that he’d cancel his attendance.
Executives at the Dubai-based port operator and logistics giant were angered by comments from deputy Prime Minister Angela Rayner and Transport Secretary Louise Haigh this week over an incident from March 2022 involving P&O Ferries, which DP World bought in 2019.
Since DP World’s 11th-hour withdrawal from the conference was reported last Friday, Prime Minister Keir Starmer walked back some of the criticism by ministers about the employment practices at P&O.
In a statement released last Saturday, a DP World spokesperson said: “Following constructive and positive discussions with the government, we have been given the clarity we needed.
“We look forward to participating in today’s International Investment Summit.”
The investment, which DP World had placed under review, was formally announced last Saturday in the statement.
London Gateway, located about 30 miles east of central London, currently has three berths to handle the world’s biggest container vessels, with a fourth set to open within weeks.
The investment would add two more berths, increasing capacity by 50% and bringing DP World’s total employment there to 1,600 from 1,200.
The expansion at London Gateway would put the facility on track to dethrone Felixstowe as the United Kingdom’s busiest container facility by 2030.
The Dubai-based company has already invested £2bil into the site since it started operations 11 years ago.
The latest expansion plan, subject to building and environmental approvals, would require land to be reclaimed along the Thames to add a fifth berth slot to open in about three years, a second rail terminal and a six berth after that.
“When the first ship arrived here in 2013, there was definitely a lot of ambition” and even some doubters about the project’s long-term viability, said Ernst Schulze, DP World’s UK chief executive officer for ports and terminals.
“You can see it worked in the long term” and there’s an “appetite to grow the business now – and there’s a need for it.”
In an interview conducted before the squabble with Downing Street, Schulze added, “we have a lot of confidence in the United Kingdom economy.”
Most of London Gateway’s volumes are imports, and there’s an adjacent logistics park that’s about half full to its capacity of 10 million sq ft of warehouse, distribution and manufacturing space.
Companies there range from DHL and United Parcel Service Inc to food supplier Compagnie Fruitiere UK, which operates one of the country’s largest banana ripening facilities.
DP World opened the port in 2013, betting on a strategy where companies want their logistics operations adjacent to a deep-sea port and inland rail connections.
That’s an alternative to a large concentration of warehousing and distribution centres – dubbed the “golden triangle” – in the Midlands region of the United Kingdom, around Birmingham.
London Gateway is a UK freeport site, which enables it to offer tenants tax incentives and customs support. — Bloomberg
