At 11:00 on the 1st November 2010, Sir Patrick Sheehy (DPPTL President), Neil Wiggins (Chairman DPPTL), Algy Cluff (Director DPPTL) and Charlie Elphicke, MP for Dover, delivered DPPTL's Offer letter by hand to Number 10 Downing Street.

A copy of the letter is included below:




The Dover People's Port Trust Limited

Please reply to:

Dover People's Port Trust Limited
c/o Dover Chamber of Commerce, Chasing Mackerel Business Centre
Stonewood Road
Kent CT12 2FG

By Hand

The Right Honourable David Cameron MP
The Prime Minister
10 Downing Street

The Right Honourable Philip Hammond MP
The Secretary of State for Transport
Department for Transport
Great Minster House
76 Marsham Street
London SW1P 4DR

Subject to Contract

1 November 2010


Dear Sirs,

Big Society bid for the Port of Dover by the Dover People's Port Trust Limited

I write as the Chair of the Dover People's Port Trust Limited (the "Trust") on behalf of the Board. The Trust has been set up as a community sponsored charitable Industrial and Provident Society in response to the Prime Minister's challenge in the Coalition Government's programme to local communities to take over and run public services, local assets and businesses.

Consistent with these Big Society objectives, the Trust hereby makes an offer for the Port of Dover ("the Offer"). If this were to be under The Ports Act 1991 process, the headline consideration would be £400 million. The net consideration offered is £200 million.

Further particulars of the offer are contained in a detailed confidential memorandum which has been prepared and will be provided if the Government is minded to entertain this Offer. In particular, we are fully mindful of the obligations in terms of working capital, maintenance and investment.

This offer is subject to detailed due diligence to be carried out on the business and assets of DHB and is subject to contract. It is made under the Prime Minister's "Community Right to Buy" policy and funded to meet your obligations under The Ports Act 1991. This offer expires on 1 December 2010, unless extended.

1. The Attractions of the Offer

The Trust recognises that the Port of Dover ("the Port") is an asset of national importance and fundamental to the trade and transport links of the United Kingdom. However, as contemplated by Modernising Trust Ports (2nd edition) ("MTP 2"), the Trust also intends to operate the Port in the interests of the stakeholders, namely the people and community of Dover, local authorities, local business, port users and port employees ("Stakeholders").

It is clear that over the last five years, the relationship between Dover Harbour Board ("DHB") and some of its stakeholders has failed to operate in an appropriate or harmonious manner, and DHB are not accountable to the community. It is also the view of the Trust that there has been a failure to maintain and develop the assets of the Port in a manner that exploits their full potential.

The current status of the Port, including its inability to borrow to fund capital investment, also acts as a constraint on the development of the assets of the Port in the interests of the stakeholders and the nation.

The structure incorporated in the Offer is designed to overcome these failings. We do not address this offer to the DHB, who we note have been considerably hostile both to the Trust and the views of numerous stakeholders in the privatisation process.

The Offer is also a means of regenerating Dover and its surroundings which, despite its location in the South East of England, have suffered from severe deprivation and unemployment for some years.

If the Offer is accepted, the Trust intends to operate the Port on a fully commercial basis, recognising its importance to the national economy, and embedding the following within its constitution and operation:

i. the Trust's objective to run the Port as a competitive and commercial enterprise providing a consistent, high quality service;

ii. restrictions on the Port's ability to exploit or abuse its monopoly pricing powers;

iii. obligations to consult with stakeholders and a commitment to transparency when setting its charges and planning capital investment;

iv. means to incentivise management to run the Port more efficiently and invest with strategic vision; and

v. stakeholder and employee representation.

As you would expect, the Offer is also subject to any necessary competition and regulatory clearances.

2. The Structure of The Offer

In accordance with The Ports Act 1991 the Trust will purchase the shares in the successor company created by DHB following any transfer order and thus this subsidiary will be created as an operating company (OpCo). It is planned that OpCo will be owned by the Trust and by other stakeholders of the Port as envisaged by MTP 2 published by the Department for Business, Innovation and Skills (then the Department for Trade).

The Trust's shareholders will consist of individuals living in the Dover District or businesses based there and each shareholder may only own one share. They would be elected to the Board for their skills and experience.

The OpCo Board will likewise have individuals experienced in port management, including executive staff, some of whom will have transferred from DHB, and non-executive directors with appropriate business experience.

a) Empowerment of Stakeholders

A key aspect of the Offer is the empowerment of the Stakeholders in the running of the Port. The objective is that the port users, community and port establish a new partnership and work in harmony for the improvement of port operations, investment in infrastructure, seafront and town rejuvenation. In this way, the port will be run in the community and national interest and deliver more jobs and money for a community that has been beset by deprivation for too long.

The Stakeholders are empowered through representation on the Boards of both the Trust and OpCo, which will be reinforced through binding agreements.

b) The Framework Agreement and Appointment of an Assessor

A Framework Agreement (the "Framework Agreement") will be embedded in the constitution of OpCo. It provides the users and other interest groups with a forum to make representations regarding the operation and development of the Port.

These representations are made to an Assessor, an expert independent of the board and all other interested parties, who will rule on:

i. the appropriate level of capital investment;

ii. operational and maintenance requirements;

iii. performance targets;

iv. cost levels; and

v. the nature and levels of tariffs

to enable and ensure the efficient running of the Port.

The review and tariff setting will be conducted at five-yearly intervals - or more frequently if deemed necessary or appropriate - and will cover the subsequent five-year period.

Drawing on the experience gained in the UK from the regulation of essential service providers like the water and energy utilities, the structure will provide a predictable, transparent and accountable structure for the operation of the Port, in the interests of its Stakeholders and of the wider community.

3. The Funding of the Offer

The Offer will be largely funded through debt raised from banks and financial institutions. The nature of The Ports Act 1991 means that HM Treasury will garner a net receipt of £200 million through the operation of the levy mechanism at Section 13 of The Ports Act 1991 (if that is the manner you decide to take forward this Offer, other than one of the various alternative mechanisms which we would be pleased to discuss).

a) Funding of Maintenance and Capital Investment

For many years, the Port has seen substantial underinvestment. The sell off proposal made by Dover Harbour Board makes no provision for new infrastructure that is required in the national interest. This is unacceptable to the Dover community. Therefore OpCo will be raising additional facilities to ensure that the Port has sufficient capital resources to carry out the maintenance and investment appropriate to the operation and development of its facilities, in the national interest.

This will ensure a significant increase over the current levels of investment and maintenance at the Port.

b) Regeneration of the Port Area

As part of The Offer, a significant sum will be set aside to help fund the regeneration of the port area in the interests of the people and community of Dover and in the broader national interest.

Regeneration will be carried out through an entity that is separate and bankruptcy-remote from the company operating the Port. In view of the social regeneration purpose hereby expressed, the Offer is made on the basis that Sections 17 and 18 of The Ports Act 1991 will be disapplied.

4. Support for the Offer

An established Securities company has acted as financial adviser to the Trust in putting together the Offer and has provided a letter of support with regard to the financing of the Offer.

As part of this process, our adviser has had discussions with representatives of the Port employees, the major long term users of the Port, a number of financial institutions, as well as professional and technical advisers. Letters of support for our proposal have been received from the principal users of the Port, legal and technical advisers, as well as three potential funders for the Offer, who are major international financial institutions.

5. Conclusion

The community, represented by the Trust, is committed to re-establishing Dover as the pre-eminent port and gateway to the United Kingdom.

It believes that the Offer and structure it has proposed for the management and development of the Port of Dover is in keeping with the aims of The Big Society espoused by the government, fulfils the intentions behind MTP 2 with respect to the interests of all stakeholders and ensures that assets are developed in the interest of both such stakeholders and the nation as a whole.

Yours sincerely


Neil Wiggins


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