But Babcock’s proposal has run into all sorts of objections, including environmental issues and from Forth Ports, which today turns up the pressure on the Scottish Government for a rethink.
As a rival firm running its own container ports there are obvious reasons why it might object, but its arguments for opposing the Rosyth plan are based more on capacity and the realities of economic growth in the next few years.
A letter from chief executive Charles Hammond to First Minister Alex Salmond spells out the commercial case for halting this plan and suggests the public inquiry last year did not examine a number of issues adequately.
There is supporting evidence for Forth’s case. Scottish business is served by facilities at Grangemouth, Greenock, Freightliner at Coatbridge and to some extent by Teesport. Market commentators say there is enough supply, indeed some say it is over-supplied. The container market was expected to grow at between 5 per cent and 7 per cent a year but actual growth is 2 per cent. A number of container ports have been put on the back burner, including one planned for Hunterston in Ayrshire. Grangemouth is currently working below capacity and could therefore soak up any expansion in the market, potentially for up to ten years.
A niggling worry for some objectors is whether public money is being used to support Babcock’s plans. If so, this issue could end up in the courts.
Lloyds set to be first up for sale
AFTER all the speculation of recent weeks there seems to be some real momentum at last behind selling the taxpayers’ stakes in the part-nationalised banks.
Some have argued for a delay until shares in both Lloyds and Royal Bank of Scotland have at least reached break-even, and it looks as if they will get their wish in the former if not the latter.
Lloyds continues to stay above the water line, brushing off the recent market slump, and may therefore be showing enough robustness to be readied for a sale.
RBS is a different story. The decision to force chief executive Stephen Hester out of office before privatisation hit the shares badly and confidence in the bank remains low. The government’s holding is now worth about £14 billion against £45.5bn pumped in to rescue it in 2008.
However, UK Financial Investments, the body charged with “looking after” these holdings, last week launched a tender process for advisers to work on privatising the two banks.
This is as clear an indication of government intent as we have so far seen and should provide some encouragement to work-starved investment bankers. Deutsche Bank and Credit Suisse are said to be favourites.
Lloyds will certainly be first on the block, and if the price holds it is possible the Treasury’s entire 39 per cent holding could be offered for sale. Currently worth £17bn, it would be a giant privatisation.
Advisers will be appointed to work with RBS, but because of its ongoing underperformance, it looks unlikely to be put on the market for at least a year.
Attack on Leahy hints at troubles
THE extraordinary outburst on Friday by former Tesco chairman Lord MacLaurin at the “sad legacy” of retired chief executive Sir Terry Leahy hinted at the deep-seated issues troubling Britain’s biggest grocery chain.
It also showed the extent to which even the brightest of stars can lose their shine. Leahy has been feted as one of the country’s best bosses, but he is now being remembered for his failures in the US and for the fall in profits that followed his departure.
MacLaurin told shareholders it would take up to three years to turn the company around.
His words will at least offer some comfort to incumbent chief executive Philip Clarke, who will feel the load has been lifted somewhat.
This episode is also the latest to provide some chastening advice to the company and its supporters about the dangers of over-ambition.