29 November 2001

Held at Applemore Recreation Centre, Dibden, Hampshire, before: Mr MICHAEL HURLEY (The Inspector) & Mr ANDREW PHILLIPSON (The Deputy Inspector)

THE DEPUTY INSPECTOR (Mr Andrew Phillipson): Ladies and gentlemen, the Inquiry is resumed and I am expecting Dr Julian Lewis MP.

Dr LEWIS: Gentlemen, it is a pleasure to welcome you to the constituency of New Forest East for which I am the Member of Parliament. It is less of a pleasure that your stay here is going to be so short. You will be aware of the fact that I presented a petition to Parliament of over 2,000 signatures, gathered in less than a fortnight, protesting about the decision to hold the Inquiry not only outside the area which is going to be affected adversely by this development, if it occurs, but in premises owned by the applicant in this Inquiry.

I think this sends a very undesirable signal, although I know that it is a signal for which you as Inspectors were not responsible for sending. I understand, indeed, that this was something that goes to the account of a Government department.

As a resident of one of the areas which would be badly affected by the development of a container terminal at Dibden Bay, I suppose I must declare an interest, along with the interests of thousands of my constituents, who would be similarly badly affected. The distribution of population in New Forest East is unusual. Because the area is largely taken up by the heavily protected forest region, over 80 per cent of my constituents are, as it were, compressed into the long line of villages from Calshot and Fawley in the south, along the Waterside to the town of Totton in the north. Planning restrictions in the forest mean that house-building is overwhelmingly confined to Totton and the Waterside. As so many of my constituents live in this narrowly restricted area, the impact on their lives of the closure of strategic gaps between villages and of extra burdens placed on road and rail links is disproportionately heavy.

When I first became acquainted with the Dibden Bay proposals in 1995, it seemed to me obvious that the adverse effects on people living in Totton and on the Waterside would decisively outweigh any possible advantage to them. Therefore, it was obvious that those proposing to build the port would have to produce an overriding national economic case if the development were to have a chance of being approved. Associated British Ports briefed me on at least three occasions in 1996 and 1997 after I became successively Prospective Parliamentary Candidate and MP for the seat.

The nub of their argument was as follows: they stated that each of the small number of major container companies would use only one port of entry into the United Kingdom and that, unless Dibden Bay were built to expand Southampton's container capacity, not only would Southampton fail to obtain extra business, but it would lose its existing business to other competing ports. On the face of it, this seemed to be a strong argument.

However, over two years ago the picture was dramatically transformed. The prospect arose that the redundant oil refinery site – a brownfield site, clearly – at Shell Haven in Essex might become a new container port on a scale substantially larger than Dibden Bay. I was astonished to see the way in which ABP in Southampton first sought to deride the practicability of building a port at Shell Haven, and then sought to claim that it would make no difference anyway to the overriding national economic case for Dibden Bay. It became clear to me that ABP were totally bent on pushing through the Dibden Bay scheme irrespective of the existence of a more suitable alternative. I will refer later to one possible motivation for this rigidly blinkered approach on the part of ABP.

When Shell Haven was first mooted, ABP objected that the traffic outflow would be too heavy for the M25 motorway to cope with it. They also claimed that excessive dredging would be involved. These claims, from a company which tries to tell my constituents that the A326 can cope with massive container traffic and that Dibden Bay would be capable of receiving the large new generation of container ships, were utterly incredible.

Not only will Shell Haven be larger than Dibden Bay, and most probably come into service sooner than Dibden Bay, but I have been assured authoritatively that Shell Haven by itself will be able to absorb all the projected additional container traffic for the south-east for between the next 15 and 20 years. So confident of this are the Port of London Authority that they anticipate Shell Haven opening up on a staggered basis – just a few berths at a time – as and when the extra capacity is required during the next two decades. This fact alone is enough to destroy the argument that Dibden Bay must be inflicted on the residents of Totton and the Waterside in the national interest because of the lack of any viable alternative.

However, the story does not end here. We now know that there are going to be huge expansions in container capacity at no fewer than three additional alternative sites: Harwich, Felixstowe and Thamesport. Furthermore, there remains the possibility of future development at Tilbury as well. None of these alternatives involves the destruction of a natural habitat, the overwhelming of inadequate A-roads or the bisecting of towns and villages like Totton and Marchwood with endless convoys of lorries and railway wagons.

Yet, according to ABP, all this extra capacity makes no difference to their case that the Dibden Bay development is essential. One wonders just how gigantic the extra capacity being created by ports all around the south-east of England would have to be before ABP would finally acknowledge that such increases had any effect whatsoever on their fixation with developing Dibden Bay.

This huge increase in alternative capacity, much of which will become available long before Dibden Bay is built, if it is built, now turns ABP's own original argument back on its creators. If what they told me about each of the container companies using only one port of entry is true, then it is incontestable that the container operators will use as their single port of entry one or other of the alternative ports which will be both larger than Dibden Bay and come on stream sooner than Dibden Bay. Yet ABP – now that their rubbishing of Shell Haven as a container port site has itself been discredited – nevertheless claim that there will be enough business for everyone.

I have reluctantly been forced to the conclusion, Sir, that ABP cannot be relied upon to tell the truth about this development. When it suits them to claim that container operators will go only to one port, then that is what they claim. But when it becomes apparent that other ports will absorb the trade earlier than Dibden Bay, then they are happy to claim that the trade will be sufficiently divided to require Dibden Bay as well.

Now, what of the motivation? ABP have publicly claimed that they are not planning to transfer their existing container operation to Dibden Bay so as to sell off the container port location for vastly profitable property development. They say, and they have said this publicly, that this could easily be prevented by the Secretary of State. This point is risible. How can the Secretary of State, or anyone else, know what the directors of ABP will do in ten years' time, when Dibden Bay is up and running, if they get away with building it? There will be absolutely nothing to prevent the existing Southampton container port from being closed down and the land used to make absolute fortunes for those running ABP. This alone is the only explanation that supplies logic to their position.

If the real objective is to free expensive land in Southampton to make a financial killing, that would explain why the opening of Shell Haven and all the other new facilities would indeed "make no difference" to the need for Dibden Bay in the eyes of ABP. Indeed, the fact of the existence of new container ports elsewhere would actually make it easier to argue in ten years' time that the old Southampton container port had to be closed and developed because, sadly, there was not enough trade to keep it busy as well as Dibden Bay.

When I first considered the problems posed by a possible Dibden Bay port, I adopted the following maxim:

"If Southampton City wants the port to be constructed at Dibden Bay, then Southampton City must be prepared to take the container traffic which would incessantly be entering and leaving such a port."

Many of the dire consequences of a Dibden Bay container port – though certainly not all – would be lessened if a prefabricated, drop-down road tunnel were laid under Southampton Water between Dibden Bay and the rail and motorway terminals serving Southampton Docks at present. At the very least, at the very least, this should be required if a decision were made to allow there to be a container port at Dibden Bay.

Yet, I anticipate that if you, Sir, were to apply such a condition to the granting of permission to ABP to build the Dibden Bay Port, ABP would speedily abandon their plan to develop Dibden Bay because of the cost implications. They would then decide to do what they have conspicuously failed to do up till now – namely, to raise the productivity of the existing SCT operation to the levels of which it is capable and which its competitors have long since achieved.

The project description for Shell Haven, which is now known as "London Gateway", states at the outset that it will incorporate:

"Berths capable of handling 3,500,000, 20-foot equivalent (TEU) containers per annum when fully developed."

The Department of Transport, Local Government and the regions published a paper in July 2001 entitled "Recent Developments and Prospects at UK Container Ports". Table 6 on page 14 of that document fatally undermines any contention that a container port must be built at Dibden Bay in the overriding national economic interest. It lists the potential expansion of capacity at UK container ports, confirming that Shell Haven could supply 3,500,000 extra TEUs per annum and that a further 1,700,000 TEUs would become available if the Bathside Bay project at Harwich comes to fruition.

I have spoken directly to three Members of Parliament who represent the constituencies where several of these proposed container port expansions would take place. With natural qualifications about the need to cater for the interests of individual constituents who might be adversely affected, each of these MPs has broadly welcomed the prospect of the building or expansion of these alternative container ports, alternative ones that is to Dibden Bay. Angela Smith (Labour, Basildon – covering Shell Haven), John Gummer (Conservative, Suffolk Coastal – covering Felixstowe) and Ivan Henderson (Labour, Harwich – covering Bathside Bay).

Not only are there ample alternatives to Dibden Bay to meet any realistic increase required in future UK container port capacity, these alternatives exist in places where the development would be welcomed by the local communities and their MPs because they would have few, if any, of the adverse consequences for local people and the environment which would flow from an analogous development here at Dibden Bay.

It is a matter of public record that ABP stated that the construction of a container port at Shell Haven would be impracticable because the M25 motorway would be unable to cope with the resultant traffic and because excessive dredging would be needed. I have supplied the Inquiry with some press coverage relating to those spurious claims. It is manifestly the case that neither of these suggestions seems likely to render the Shell Haven project impracticable. If so, this suggests one of two things: either ABP are incompetent in their assessments of what is and is not practicable for the construction of container ports, or they were deliberately seeking to mislead in claiming that Shell Haven was an impracticable site whilst knowing this to be untrue.

An article from the Sunday Telegraph of 2 September 2001 refers to what it describes as ABP's "disastrous" misjudgment in acquiring American Port Services for £120 million only three years ago and now probably being about to dispose of this business for just a quarter of that sum. This, Sir, does not inspire confidence in ABP's ability to predict future developments in the shipping industry. Nor do ABP enhance their credibility in referring to supposed problems of dredging at other locations. The DTLR document to which I have referred states, in paragraph 70 on page 21 that:

"The widespread use of large, 14-metre draught, 7,000 TEU vessels, and the prospect of even larger vessels is significant, because few terminals can easily cope with such vessels."

Given the constricted waters of the Solent, the prospects of even larger container vessels in the future is likely to detract from ABP's claim to be well-placed to handle future increases in the container trade.

As well as the highly probable development of Shell Haven and Harwich, there are strong prospects for major expansion of capacity at Felixstowe, significant expansion at Thamesport, and modest expansion at Tilbury. I have supplied the Inquiry with a bar chart showing the overall picture of potential future container capacity, excluding both Dibden Bay and excluding more tentative proposals even for Scapa Flow. I have also supplied an exchange of correspondence between the Corporate Affairs Manager of Hutchison Ports (UK) Limited, Mr P S Davey, and me in May 2001 confirming the large projected increases in capacity at both Felixstowe and Harwich, and possibly Thamesport too. Mr Davey's conclusion is worth quoting here:

"In total therefore there is the ability to create an additional 5.1 million TEUs of container capacity at the ports of Felixstowe, Harwich and Thamesport. According to our calculations, this would be sufficient to cater for the UK's container growth for the next 10 to 15 years, even if no other facilities were built elsewhere over this period."

As we know, however, Sir, Shell Haven is likely to supply a further 3.5 million TEUs in addition to the huge projected increase at the three locations operated by Hutchison Ports (UK) Limited. It is, therefore, hardly surprising – and this is probably the most crucial point that I would put before the entire Inquiry if everything else is ignored – that ABP have felt compelled to abandon the reliance which they previously had on the argument that Dibden Bay container port has to be built "in the overriding national economic interest". The huge amount of additional capacity which will be available in other locations has blown the argument that there is "no alternative" to Dibden Bay to smithereens.

A tacit acknowledgment of this occurred in public on 12 February 2001, when Captain Jimmy Chestnutt of ABP, Paul Vickers of Residents Against Dibden Bay Port and I gave evidence to the relevant subcommittee of Hampshire County Council in Winchester. Captain Chestnutt openly stated that ABP were:

"Not basing [their] case for Dibden Bay on grounds of national demand, although we maintain that national demand exists."

What Captain Chestnutt was saying was that ABP now accept that the case for Dibden Bay must be judged on its own intrinsic merits and demerits and not on the basis that it is an essential part of some overall UK requirement. Indeed, I recall that he used the words "on its own merits" in the course of his presentation. At the end of the hearing the Hampshire County Council members present unanimously rejected ABP's planning application, as you, Sir, will be aware.

Before moving on, I will draw attention to Annex I of the proof of evidence that I have submitted, which is a press cutting from the Advertiser & Times of 17 February 2001, where I am quoted as saying:

"I was astonished but delighted to hear Captain Jimmy Chestnutt admit that ABP 'are not promoting it [the Dibden Bay Port] for national demand' "

– they have slightly shortened the quote of what I said –

"though maintaining that national demand does exist. What this means is that ABP have been forced to accept that availability of alternatives to Dibden Bay means that no case can be made for a Dibden Bay container port having to be built on the grounds of national economic need. It is now simply a question of whether local and regional advantages of creating such a port outweigh the massive disadvantages to Totton and Waterside residents and to the road and rail infrastructure."

I am quoted as adding:

"I believe the odds of us winning this battle have shifted decisively against ABP and in favour of the people of Totton and the Waterside."

I am not aware that my attribution of that quotation to Captain Chestnutt, which was, as can be seen, publicly reported, has ever been contested by ABP.

If ABP had genuinely believed in the argument they put to me in 1996 and 1997, they should by now have abandoned entirely their wish to develop a container port at Dibden Bay for fear that it would end up as disastrously as their failed investment in America. For if it were the case that the limited number of big container operators would use only one future port of entry into the UK, there are few, if any, grounds for believing that the choice for that one port would fall on Southampton/Dibden Bay, with such vast capacity as that to be offered at Shell Haven already in prospect. Now, when it suits them, ABP have completely reversed their position, arguing that there is enough business to go around for new container ports at Dibden Bay and Shell Haven, as well as elsewhere. This supports an interpretation of ABP's behaviour, not as a process of reasoning from premises to a conclusion, but as a process of rationalising from a predetermined conclusion backwards to any arguments which they can come up with to buttress it.

ABP can give no guarantees that their real strategy is not to close down the SCT Terminal once Dibden Bay is up and running. This would free the extremely valuable land on the Southampton site for highly lucrative commercial development. It is this prospect – and this prospect alone – which makes sense of ABP's determination to proceed with the Dibden Bay scheme despite the total transformation caused by the decisions to develop new container ports at Shell Haven and Harwich and greatly to expand the capacity of others elsewhere. Only this sensibly explains why ABP persist in saying that the huge amount of extra capacity which their competitors are about to create makes no difference to the need to develop Dibden Bay. If Dibden Bay were built, the existence of so much extra capacity elsewhere would, as I have stated earlier, actually assist ABP to argue that, regrettably, there was no way of continuing to operate the SCT terminal as well. The latter would then be closed and the commercial development of the land would make a fortune for ABP's key personnel and their shareholders.

ABP are clutching at straws in claiming that planning obstacles may prevent the development or expansion of the other container ports, which, if it occurs, will fatally undermine the argument for the necessity to develop Dibden Bay. As already indicated, the Shell Haven, Felixstowe and Harwich developments all enjoy broad general approval in the communities concerned. The situation is very different in Totton and the Waterside, where the concentration of population caused by the inflexible restriction on building in the New Forest itself means that the adverse impact of the Dibden Bay scheme would be unbearable. Nor do the alternatives to Dibden Bay involve the creation of huge, unsightly container stacks and vast crane superstructures adjacent to one of the United Kingdom's most beautiful areas or the loss of significant wildlife habitats.

ABP now suggest that Dibden Bay will still be needed, despite all the alternatives which are being created or developed. One would like to ask ABP just how many new container ports would have to be built, or existing container ports greatly expanded, before they would contemplate conceding that the Dibden Bay concept had become redundant?

I believe, Sir, that there is nevertheless one great obstacle to the rejection of Dibden Bay and this is the only part where I am going to stray slightly into political waters. The City of Southampton wants the Dibden Bay container port to be built. The City of Southampton is governed by a political administration which is of the same complexion as the Government of the day.

Back in February 2001, on 8 February to be precise, in a television programme called "Powerhouse" on Channel 4, the then Parliamentary Private Secretary to the Minister for the Environment, Bradford North MP, Terry Rooney, participated in a report which referred to Dibden Bay. Mr Rooney said of the Dibden Bay project:

"It is a very valid proposal for developing a much-needed container port in the United Kingdom."

Later on in the programme, although covering himself with other remarks that were more balanced and acceptable, he again said:

"This is the best deep-water site in Britain."

I am concerned that we have a Government which is predisposed towards the development of this project.

In closing my presentation to you, Sir, I would say only this: when you make your final recommendation, please make it as unambiguous as possible. Because if you do not, if you leave even a chink of light for the Government to use as an excuse to override the wishes of my constituents, and perhaps the general thrust of your own argument, then that is what will happen. I hope you will decisively reject this application. [Applause]

THE DEPUTY INSPECTOR: Ladies and gentlemen, I am very sorry, but clapping is not permitted in the Inquiry hall and we will, please, not have it in future. Thank you. Thank you, Dr Lewis.