£222m drop in value of Waterfront

Forth Ports said that 80 per cent of its development landbank now had "no immediate development value", with its total current value now standing at only 60m.

It also today announced that it recorded a 30.7m loss in 2008 and has debts of 208m.

The company's chief executive Charles Hammond blamed "the shutdown in the property market" for the massive decline in the value of its Edinburgh Waterfront land. He admitted that the downturn meant the company would not be able to find development partners or financiers in the immediate short-term.

However, he today insisted that it could still realise its long-term 30-year plan of reviving the Leith Docks area.

Late last year, the firm released the first detailed plans of its 700m scheme, which would be the largest expansion of Edinburgh for hundreds of years.

The first two of nine "urban villages" are to feature a new cruise liner terminal and visitor centre for The Royal Yacht Britannia, 1870 new homes and up to five new hotels.

Mr Hammond said: "The valuer has looked at our landbank and said that 80 per cent of it has no immediate value. That means that if we looked to sell it in today's market it would not have any value.

"But we do not intend to sell it so the land value today has no impact on our long-term plans.

"It does mean that we will be investing less in the immediate future. But for the long-term, we still intend to bring people on board to help realise the land value."

He said that the current market conditions made it unsuitable to approach developers and partner firms in the short-term.

However, he added: "In the longer term, we are confident that the location of the land and the Waterfront area will remain attractive.

"Nobody has ever given guarantees on timescales (for the project]. We have always said that it is a long-term process of more than 20 years and nothing has changed."

Forth Ports also said today that it had seen the value of Ocean Terminal decline by 19.7m as a result of "adverse market yield movements".

The overall reduction in land value was 277m, but that was offset by 55m of value being added as a result of consents and infrastructure investment.

Despite today's gloomy figures, the company said that it has successfully managed to extend the terms of its financing facilities to June 2012, giving it more security.

Forth Ports also owns seven commercial ports in the UK, including five on the Firth of Forth. Its ports division saw underlying profits rise 23 per cent, with an 11 per cent increase in Scottish container volumes.

Mr Hammond said: "Looking ahead, our resilient and secure ports income together with our refinanced debt facilities provide a strong and stable base to continue to deliver value for shareholders and to position ourselves for an economic recovery."