HC Deb 18 December 1991 vol 201 cc162-3W
Mr. Devlin

To ask the Secretary of State for Transport when he expects to announce his decision on the recommendation put to him by the board of Tees and Hartlepool port authority concerning the sale of its undertaking.

Mr. Rifkind

Under the provisions of the Ports Act 1991, it was for the THPA board to arrange for the sale of shares in its successor company and to recommend to me which bid should be preferred, having regard to the provisions of the Act and objectives of the sale which were agreed with me.

The agreed objectives included encouraging disposal to managers and staff of the whole or a substantial part of the equity share capital; seeking best open market price subject to the other objectives; continuing operation of the Port in ways which are beneficial to the local economy; maintenance of a viable and competitive port operation; maintenance of the port as a separate entity with day to day management and control located in Teesside; use of THPA's assets for the development of the port business and for the promotion of developments which are locally beneficial.

My Department and its advisers kept closely in touch with the THPA board as it carried out the sale process. I am satisfied that the board discharged its responsibilities in a fair and proper manner. In particular, I am satisfied that it considered carefully each of the bids in relation to the agreed objectives of sale.

The key issues which the board included in its evaluation were: independence, long-term stability, benefit to the community, contribution to the port, credibility, acceptability, employee participation and price. Having thoroughly scrutinised all the bids, the THPA board concluded that the bid by Teesside Holdings Limited, although not the largest in monetary terms, was the most consistent with the authority's privatisation objectives and, taken overall, the most beneficial to the port, its employees and the Teesside community generally. As regards employee participation, the Teesside Holdings bid includes provision for 475,000 shares to be reserved for THPA employees, who will receive one free share for every share subscribed for—that is, 5 per cent. of the proposed equity share capital. Accordingly, the THPA board has recommended to me that its successor company should be sold to Teesside Holdings Limited.

I have considered the THPA recommendation carefully. In particular, I have noted that the price of £180 million offered by Teesside Holdings is at the top end of the range of an independent valuation carried out by THPA prior to the sale. I have also noted the THPA board's view that the Teesside Holdings' bid makes the most convincing plans for a prosperous and growing future for the port, including specific capital expenditure proposals. The bid is also considered to demonstrate the greatest commitment to the long-term development and stability of the authority's undertaking for the benefit of Teesside.

I am satisfied that the THPA board's recommendation best meets the agreed objectives of the sale. I have therefore written to the chairman of THPA to say that I am minded to give my formal consent to the sale of the authority's undertaking to Teesside Holdings Limited as soon as I am able to do so. This will be possible only after the scheme of transfer submitted by the authority under section 9(1) of the Ports Act 1991 and the order providing for a levy on disposals of land to be made under section 17 of the Act have come into effect. The latter is subject to an affirmative resolution of the House and is expected to be debated immediately after the Christmas recess.