Agenda item

Cabinet discussed proposals for a budget change to the Port of Ramsgate Project. The report considered at the meeting provided an update on two closely linked projects which were fundamental to the future of the Port of Ramsgate. The report also proposed a transfer of funds between projects in the Ramsgate levelling up funded programme and the agreement to offer a grant contribution to the operator for the required works at the port.

Following a Cabinet Decision on 2 March 2023 officers in collaboration with external lawyers, had developed a tender strategy and suite of documents for the operation of a large part of the port. This included two of the roll-on roll-off ferry berths. This opportunity was scheduled to be tendered on the open market next month and would offer a concession agreement and lease with the objective of re-establishing a scheduled cross channel service.

In parallel with the port concession operator project, the closely linked port infrastructure project had been developed further. The design and extensive survey work on the latter project had allowed an updated and higher confidence cost estimate for the required capital works to be produced. This confirmed the news that was shared in the regeneration update report in January that the estimated value of the works was substantially beyond the LUF budget currently allocated to the port infrastructure work and beyond what cabinet would be prepared to allocate from the overall Ramsgate award.

Proposals were for the transfer of funds from two other projects in the Ramsgate levelling up programme that could no longer be delivered. This proposal would increase the budget available for the works from just over £3m to £7.2m. This new higher budget value would, if approved, be sufficient to undertake the capital dredging required, fund remaining project management costs and also offer a grant of £4.5m to the successful port operator as a substantial contribution towards the cost of the works.

The agreed direction and the delivery strategy from the start of this project had been one of risk mitigation both in terms of financial risk to the authority in the delivery of the project and the long term operational and financial risk at the port. The proposal for the port concession operator to carry out the works in compliance with strict grant conditions was well aligned with the project risk objectives as it removed exposure to future project delivery risks. There was no change in that all the LUF money would be spent at the port of Ramsgate in delivering the project and using LUF funds to lever in outside investment was one of the government’s original objectives.

It was reported in the January Ramsgate Regeneration Update report that the Fishing Facilities project was no longer deliverable as originally proposed and would not deliver the required project outputs. A smaller scale project to enhance fishing facilities at the harbour was still planned and this report sought Cabinet’s approval for the majority of that budget being reallocated to the port infrastructure project. The Cabinet report also proposed the reallocation of funds from the Visitor Accommodation Opportunities project budget to the Port Infrastructure budget.

The proposal to transfer funds to the port infrastructure project was an entirely separate matter that played no part in the rationale for not taking those projects forward. The test of this was that neither of these projects could proceed using the LUF funding even if the port infrastructure project was aborted at this point. This was clearly disappointing but it was not news and in part, it was a product of the way this funding was allocated through a short-notice bidding competition, which allowed very limited early project development.

The report also provided an update on the planned approach to the proposal from Brett Aggregates, the established aggregates operator at the port to lease additional land. The approach to this would change, but measures were in place to ensure best value was achieved and importantly, plans were still aligned with the recommendation approved by Cabinet in March 2023.

Despite the increase in the estimated project costs, there were no plans to divert from the original project objectives and previous cabinet decision. However, the delivery of projects in the Ramsgate levelling up funding was time bound. The report set out some scoping work currently being undertaken on alternative options for the future use of the port, which could be developed further and with less overall programme impact in the event that the port concession tender exercise does not yield suitable or compliant bids.

Cabinet did not commit any funds at this meeting. However any proposed decision to do so would be taken to the Overview and Scrutiny Panel for pre-decision review and then to a public meeting of Cabinet for decision. The tendering process would answer the questions people have about the third-party appetite for operating from the port of Ramsgate in short order. It would hinge on whether the infrastructure works were affordable within the context of a third party’s business plan. Cabinet would only find that out through the process. Cabinet acknowledged that there were no guarantees. Any debate at this stage on whether it would be successful could only be speculative and performative, rather than useful. Members would be able to find out in the next few months.

The following Members spoke under Council Procedure Rule 20.1:

Councillor Rogers;

Councillor Pugh;

Councillor Wing;

Councillor Austin.

Councillor Everitt proposed, Councillor Albon seconded and Cabinet agreed to:

1. The transfer of a total of £4.12m from the Fishing Facilities project and the Visitor Accommodation Opportunities project to the Port Infrastructure project;

2. The mechanism of a grant payment of £4.5m, to be funded from the Port Infrastructure project Levelling Up Fund budget, to the successful port concession operator to contribute to the cost of the required enabling works.