The Port of Liverpool has managed to successfully win a legal battle in regards to a public funding grant provided to complete construction of its cruise terminal.
The European Commission ruled that a £17.8 million grant used to aid in the construction of the Liverpool Cruise Terminal is well within the lines of state aid laws.
Opened in 2007, the construction of the Liverpool Cruise Terminal was able to gain government grant funding on the condition it did not compete with other UK ports for turnaround cruises, such as the Port of Southampton. The city attempted to amend this restriction as early as 2009 but it fell on death ears.
Yet, much to Liverpool’s delight and Southampton’s despair in May 2012, the government agreed to lift this rule if Liverpool paid back £8.8 million of a £9.2 million government grant.
However as soon as the proposal was put forward, the Port of Southampton, one of Liverpool’s main rivals issued a complaint to the EU asking that they investigate the legality of financing the project under state aid rules.
The rules stipulate that no government grant can be used to help one private business benefit over its rivals. Liverpool Terminal is owned by Peel, whilst Southampton’s is run by ABP.
The European Commission began examining the complaint as early as 2011.
After in-depth financial analysis it was found that “public funding was limited to the minimum necessary to make the investment possible.” If the port was not supported by public funding, it would not have gained the necessary income to cover the investment costs over a period of 20 years.
The Commission went onto say that any potential distortions of competition put down to public funding would be limited because “the terminal will have a small market share, both in the EU and UK markets.”
Nevertheless, speaking to the Insider, Stewart Dunn, chief executive of Hampshire Chamber of Commerce, has expressed his misgivings about the announcement. He felt that the funding provided gave the Port of Liverpool “an unfair advantage” as they “firmly have their sights set on attracting Southampton cruise business which makes a vital contribution to Southampton and the regions economy”
This comes shortly after the Port of Liverpool announced they were preparing for a busy year, with a record 46 cruise liners making call at the terminal. This includes 21 turnaround cruises, including a newly added line from Thomson Cruises.