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Bristol mayor George Ferguson to sell Avonmouth docks freehold

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Written by:   | Posted 25-March-2014 17:19

Bristol mayor George Ferguson to sell Avonmouth docks freehold

Bristol mayor George Ferguson has negotiated a deal that could help the docks at Avonmouth become one of the most successful ports in Europe.

He wants to sell the city council’s freehold interest for £10 million, opening the door to further investment in the port, which has gone from strength to strength since it passed into private ownership nearly 25 years ago.

The council effectively sold off the docks in 1991 by selling a 150-year lease to the Bristol Port Company for £36 million.

But the company has always wanted to buy the freehold to make it easier for further investment in the port, which is one of the biggest economic drivers in the South West providing thousands of jobs.

Mr Ferguson said that holding on to the freehold was worth nothing to the council but would make it easier for the port to secure loans from banks in the future.

He stressed the council would retain its 12.5 per cent share in the Bristol Port Company.

He said: “When the lease was agreed, it was said that in time the council might sell the freehold. Well, nearly 25 years has passed and I believe it is right for us to do this now.”

He said the freehold was worth very little because there could only ever be one buyer – the Bristol Port Company.

“The residual leasehold of about 125 years is worth very little to the council but from their point of view, the freehold ownership will be recognised by the banks as security against loans in the future when the port want to further invest,” Mr Ferguson said.

He added that the council’s 12.5 per cent per cent share of the company had paid dividends over the years and provided an income of about £1 million a year.

He said: “With the port’s future success in the years to come, I can only see the prospect of this sum growing and therefore giving us a better return than hanging on to the leasehold.”

The private talks between the council and the port have become known among managers as “Project Victoria”.

A report is being prepared for Mr Ferguson’s next cabinet meeting at Henbury School on April 1, which was originally due to be held behind closed doors to protect commercial confidentiality.

But Mr Ferguson has decided to go public on the issue to show the arguments and prove that the deal is above board.

He knows that as a former Merchant Venturer, there are likely to be scurrilous attacks on him about his motives for the sale of the freehold.

The chairman of the Bristol Port Company is Terence Mordaunt, a Merchant Venturer, who jointly owns with another businessman David Ord, First Corporate Shipping Ltd, the company which bought the lease from the council.

Mr Ferguson said he deliberately took independent advice from property consultants and accountants about the freehold sale.

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