A question mark has been thrown over the financing of the new Humber Freeport company following an offshore wind turbine manufacturer’s estuary snub.
Financial modelling on how the zone will operate had partly been based on South Korean steel monopile maker SeAH Wind becoming one of the anchor tenants at the new Able Marine Energy Park on the South Bank.
It had committed to the North Killingholme site back in September 2020, but recently revealed it was heading further north, opening a new £200 million facility on the Tees where it will instead create the 750 new jobs.
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It has now entered the planning process.
The Able site is one of three tax zones within the Humber Freeport, which is part of the government’s flagship post-Brexit policy aimed at promoting investment zones at ports around the UK. Tax and business rates raised in each zone will be managed and reinvested by the freeport company instead of automatically going to the government.
With the freeport unlikely to be financially self-supporting for at least three years, the region’s four local councils are in the process of signing off a pooled £3 million loan to cover its start-up costs. But SeAH’s switch has added to the uncertainty around finances.
Hull city councillors have called for assurances over loan repayments. Speaking at a scrutiny meeting, Cllr John Fareham said: “The freeport is largely for the benefit of commerce and employers and while the public purse does get some benefit it shouldn’t end up holding the baby as it were.
“We need to know exactly what the situation is on the repayments, where we currently look like we are on this and where we are going to be heading. This is a massive matter of public finance concern.”
Cllr Fareham added that he was grateful Associated British Ports had largely met the costs of the submission process to get the freeport officially approved and established. He said the focus now should now be on ensuring the freeport could operate effectively.
At the same meeting, Hull’s assistant director of major projects, Garry Tayor, said: “The entire South Bank was effectively riding on the back of the SeAH investment. The major benefit of the freeport is being able to keep the tax from the sites locally and this was bankrolling the entirety of the South Bank element of the freeport.
“There are ongoing discussions as to what the alternative could now be in that respect because it’s quite a big blow to the freeport as a whole. This was basically a super-investor, like Siemens. They come about once every 50 years.
“The whole of the Able site was based on the premise of landing this investment. The freeport will hopefully be able to help in terms of any alternatives but these are companies that make investment decisions over the long-term and negotiations around this had been taking place for a significant number of years so it’s not immediate there will be another incoming investor.
“UK Plc has retained that investment which is good but for the Humber region, it would have been a major investment that would have had a halo effect much in the same way as the Siemens development has had on the North Bank. While there are positives around the freeport sites of the North Bank, the current focus is on what that future dynamic will be on the South Bank.”
Able UK, developer of Able Marine Energy Park, has already said SeAH’s withdrawal will delay the realisation – with a second investor, GRI Renewables, yet to respond to the move.
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