Post-Brexit Exclusion From EU Ports Plan Could Help British Terminals
British ports could gain a competitive edge in tough shipping markets through post-Brexit exclusion from planned European Union regulation of the sector, leading British port officials told Reuters.
Last month's vote to leave the EU means that British terminals are set to escape the proposed Ports Services Regulation that critics have said would hit UK ports unfairly because most are privately funded, while many of their European counterparts receive financing from local authorities.
The mooted EU-wide rules cover port services such as piloting but also include port charges and exemptions for state aid, which would add to cost pressure on UK operators while eroding their ability to control prices.
"I am reassured that if there is one benefit (from Brexit) ... the EU directive that was coming our way will fall away," said Mark Whitworth, chief executive of Peel Ports, Britain's second-biggest operator in terms of cargo handled.
"At the moment, we have a level playing field and no interference from government."
A briefing paper prepared for Britain's parliament in January said that 43 UK ports out of 319 in total in the EU would be affected by the EU regulations.
"UK ports do not receive subsidy and because they are largely privately owned they make their own commercial decisions," it said.
Britain will not begin its formal divorce from the EU by invoking Article 50 of the Lisbon Treaty this year, a government lawyer said this week.
"Brexit does offer us the opportunity to say goodbye to a whole range of inappropriate and costly regulations," said James Cooper, chief executive of leading British operator Associated British Ports (ABP).
Peel Ports and ABP, both privately owned groups, said they are committed to various investment programmes despite Britain's impending exit for the EU.
Peel Ports has invested more than 300 million pounds ($397 million) in transforming Liverpool into a deep-water container terminal that can receive bigger ships, which Whitworth said would formally open in October.
ABP has 1 billion pounds in investments planned over the next four to five years.
"We believe that ABP is well positioned to weather any short-term impact resulting from Brexit," said Joanna Fic, senior credit officer with ratings agency Moody's, adding that the group would be helped by its diverse revenue stream.
(By Jonathan Saul)
