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Associated British Ports acquires Marchwood Port operator

2023-03-17 Alex Russo and Tamara Parkin
New ownership to support development of Marchwood’s military and commercial capabilities.

170323 // marchwood_port.jpg (297 K)

Photo Credit: Solent Gateway

Associated British Ports (ABP) has acquired Solent Gateway (SGL), the operator of Marchwood Military Port in Southampton. The deal, announced in February 2023, brings substantial backing for SGL’s plans to develop the facility, including expanding its commercial operations.

Marchwood Port is owned by the UK Ministry of Defence (MoD) but is privately leased, with Solent Gateway operating the facilities. The concession was awarded to SGL in 2016 by the Ministry of Defence and grants the company a 35-year lease to develop and operate the port. Under the Marchwood Concession, the port will continue to be operated by SGL, and its relationship with the MoD will remain unchanged.

The port's expansion was contingent on securing investment. Now that ABP has acquired the company from David Macbrayne and GBA Holdings, the port development can commence. 

Planned port development 

SGL announced that planning consent had been granted for the development of Marchwood Port on February 10. The development will modernise port operations and facilities, create new jobs, and economically benefit the area while improving the port's capabilities as a defence facility. The company is investing approximately £50 million in the project, with an additional £200 million in total investment expected from third parties.

The project is expected to be delivered in six phases between 2022 and 2027. The UK government has awarded SGL a contract to design and construct phases 1-3. Current port development plans are for terrestrial works only. 

The expansion of the port's land based facilities may provide an incentive for the development of the port's three jetties: Mulberry, Falklands, and Gunwharf. The largest jetty is 220 m long and 33m wide and is capable of accepting vessels up to 16,000 tonnes. It has a ro-ro facility capable of handling vessels with various ramp configurations, and is served by two 35-tonne rail mounted cranes and railway access. 

Advantageous location

Marchwood Port’s proximity to the Marchwood industrial estate, as well as the Port of Southampton, makes it of high economic value. Southampton is Britain’s biggest export gateway, handling £71 billion worth of manufactured goods every year. Around £40 billion of these goods are for export, 90% of which are destined for markets outside of the European Union.

SGL plans to turn Marchwood into a more attractive commercial port once development has been completed. Currently, around 150 civilians and 600 military personnel are employed at the port, making it one of the region's largest employers. This is expected to increase over the next few years as each phase of the project is completed.

Marchwood Port is one of few locations in the UK that is both a tax and customs site, making it a freeport. Freeports are economic zones where typical VAT and customs rules do not apply. Its freeport status will encourage businesses to develop new facilities and operations to trade and manufacture goods more cost-effectively.

Maintenance dredging  

Before SGL was awarded the concession, Boskalis Westminster was responsible, on behalf of the MoD, for maintaining the operational and navigational depths in the approaches and berths at Marchwood Port. 

Boskalis was awarded a contract to maintain all depths in 2004. When the contract was extended to March 2015, the parameters of the contract were adjusted to targeted dredging to account for budget restrictions, as well as identifying non-essential dredging operations. According to the Marine Management Organisation, which regulates marine activities in the seas around England and Wales, Boskalis held a maintenance contract until March 2017 before SGL took over as port operator.

SGL now undertake the maintenance dredging following the same marine licence agreement as Boskalis regarding the depth management of the respective jetties and berths (between -3.3 and -8.5 metres relative to CD). In 2020, they applied for and were issued a three-year maintenance licence for Marchwood Port. The works will remove up to 50,000 m³ of material per annum from the dredging areas. 

At the time of print, it is unclear whether the acquisition of Solent Gateway will impact its maintenance dredging operations enough to have ABP offer its dredging services when the current marine licence finishes and on through SGL's development work.

Going green 

Since the acquisition, ABP has announced its plans to invest £2 billion to hit net zero by 2040. This extensive project will see ABP help provide the necessary port infrastructure to accelerate offshore wind, hydrogen and carbon capture and storage developments in the UK. The announcement confirmed that ports owned and operated by ABP would be a part of the Ready for Tomorrow sustainability strategy, with the Port of Southampton presented as a key example. 

As part of the energy transition strategy, ABP aims to decarbonise the supply chain as well as help support UK industries, including ro-ro and rail. However, at the time of print, Marchwood is not included in this environmental and governance strategy because it is still operated by SGL. This raises the question of how the expansion of Marchwood's commercial activities will coincide with ABP’s endeavour to support wider maritime and port logistics in the area of Southampton.  

In the future, SGL may adopt some of ABP's sustainability strategy or develop its own environmental policy; in the meantime, Marchwood will have the opportunity to reach its full commercial and defence capabilities through its development project.

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