Remaining tight-lipped

But – like any other terminal operator – DP World felt the impact of the global economic downturn and saw container throughput decline at its terminals around the world and thus decided to put the London Gateway project on ice. During this time the parent company, Dubai World, also made headlines as it hit a financial crisis, due to large investments in Dubai, but assured investors that it would not affect DP World.  After reviewing the project, DP World announced at the beginning of this year that it would go-ahead with the construction of the infrastructure, after it was able to reduce building costs considerably, but failed to say when the facility would open. According to Mohammed Sharaf, Chief Executive of DP World, operations at the new terminal and logistics park would depend on market conditions. Sharaf also mentioned that the project was ‘a go’ following agreement on price concessions that might not be available if the project was delayed much longer. Back in August 2008, DP World signed the USD600 million-contract with Laing O’Rourke and Dredging International to build the new terminal. Although neither company wanted to comment on possible penalty clauses in the contract pertaining to specific dates by which work must start, it is normal procedure for a dredging contractor to include this in the contract in order to plan the appropriate allocation of dredging equipment etc. Sharaf denied that this was the main reason for the decision to proceed with the project. “I would rather have paid the contractors damages than invest hundreds of millions unless I was very confident that the project would deliver long-term returns and long-term value creation for our shareholders,” he said. Raising the question of penalty clauses directly with DP World communications department prompted a written statement from Communications Manager, Xavier Woodward: “DP World has not made any announcements in regards to its container handling equipment for London Gateway and the company does not comment on project finance for any of its developments.” Although DP World doesn’t want to comment on its financials it has been no secret that the European Investment Bank (EIB)has agreed a USD450 million loan to ‘kick-start’ the development in November last year. Information on the website of the EIB shows that the loan was for the ‘total’ London Gateway project and not for the first stage of the dredging works. With regards to the container handling equipment the industry is guessing ‘who gets what’. Back in 2008, Simon Moore, CEO of the London Gateway project, told World Port Development that the container terminal will be fully automated with the use of automated guided vehicles. And more recently DP World issued another statement that the container terminal will be “one of the most automated and efficient in the world.” So, what can we expect in orders? DP World operates the Antwerp Gateway Terminal in Belgium and is operating automatic stacking cranes (shown on the Technology page of the londongateway.com website) from German manufacturer Gottwald Port Technology, the same supplier for automated guided vehicles. Industry expectations are that DP World will strike a deal with Gottwald for the supply of the ASCs and AGVs – although this cannot be confirmed as yet.  Moore also indicated that state-of-the art cranes will handle the 12,500+ container vessels that will be visiting the terminal but with a large number of cranes to purchase coupled with the challenge of recovering from a downturn, DP World might look to Chinese ZPMC for their order rather than a European crane manufacturer, despite the fact that they are ‘closer to home’.