DP World’s planned container hub on the river Thames near London is facing renewed uncertainty amid reports of financing problems for the Dubai firm’s flagship project.
The London Gateway terminal “will not be viable without suitable government funding,” according to a UK government funding application from the local authority in the region where the planned 3.5 million containers-a-year facility would be built.
DP World put the $2.5 billion project “under review” in March because of the downturn in global container shipping.
London Gateway has faced difficulty raising bank financing for $665 million of upfront infrastructure investment, Thurrock Council said in its application for central government permission to raise funds for the project.
“Bank interest in London Gateway is either very limited, or on terms … which will severely impact DP World’s equity returns, making the project even more unattractive,” Thurrock Council said.
The European Investment Bank, the European Union’s long term lending arm, recently approved nearly $500 million of loans for London Gateway linked to the entire project rather than the terminal infrastructure.
DP World inherited London Gateway, due to be built on the site of a mothballed Shell oil refinery, in its $6.5 billion acquisition of the UK’s P&O Ports in 2006.
The world’s fourth largest terminal operator is not included in its parent Dubai World’s request last week for a six month standstill on servicing $26 billion of debt.
The London Gateway terminal “will not be viable without suitable government funding,” according to a UK government funding application from the local authority in the region where the planned 3.5 million containers-a-year facility would be built.
DP World put the $2.5 billion project “under review” in March because of the downturn in global container shipping.
London Gateway has faced difficulty raising bank financing for $665 million of upfront infrastructure investment, Thurrock Council said in its application for central government permission to raise funds for the project.
“Bank interest in London Gateway is either very limited, or on terms … which will severely impact DP World’s equity returns, making the project even more unattractive,” Thurrock Council said.
The European Investment Bank, the European Union’s long term lending arm, recently approved nearly $500 million of loans for London Gateway linked to the entire project rather than the terminal infrastructure.
DP World inherited London Gateway, due to be built on the site of a mothballed Shell oil refinery, in its $6.5 billion acquisition of the UK’s P&O Ports in 2006.
The world’s fourth largest terminal operator is not included in its parent Dubai World’s request last week for a six month standstill on servicing $26 billion of debt.