Why should the Port introduce an Infrastructure Charge?

To continue to efficiently handle the rising tide of UK imports the Port has received planning approval for further development. As a condition of that development, remote road and rail projects must be undertaken and yet such is the scale of these commitments, which will be to the benefit of all UK users, they cannot be funded by our usual charges.

What has changed that the Port should need to charge customers for infrastructure improvements where previous expansion has not required it?

For a number of years there has been a developing tendency for government to seek commitments from developers to fund what may be considered as non-core but associated works. In the Port’s case these works have previously extended to environmental, amenity, leisure and social improvements, but on this occasion they extend to substantial road & rail mitigation measures too. For clarity, the Port is only looking to recover the costs associated with implementing the external road and rail infrastructure works.

What mitigation measures are the Port responsible for, if not road and rail changes?

The Port will invest in a whole range of Social, Amenity, Leisure and Environmental issues, from a new Visitor Centre to cycle paths, a council Ferry berth and air quality monitoring. These costs will be borne by the Port as part of its terminal development and will not be recovered through the Infrastructure Charge.

How will the Port ensure ‘Value for Money’ from the tender/build process in the case of remote rail and road works?

From the time that the Port first entered into detailed network planning discussions with the Highways Agency and Network Rail, independent consultants have been contracted to secure project efficiencies in routing, and value for money in the build phase. The principle consultant, Mott MacDonald, has had oversight of this process from April 2005.

Why will the Port not introduce such Infrastructure costs in the course of its normal tariff negotiations?

Our usual charges will to a degree underwrite any development within the Port, but a separate charge for these external commitments adds transparency and will demonstrate our adherence to the principle of an equitable cost only recovery.

Will the Charge be a negotiable item within customer contracts - volume and service dependent?

No. The Charge philosophy is cost recovery only and therefore the Port will ensure maximum transparency and equitable recovery that is neither volume nor service dependent.

Does the Charge represent an attempt by the Port to recover all its costs to date in pursuing the planning rights to expansion?

No. The Charge will only recover costs directly relating to the external road and rail infrastructure developments, incurred since the completion of the FSR public inquiry.

Will the levy be increased if the cost of the works escalates?

Yes. The actual size of the final external infrastructure undertaking is not yet known and the Infrastructure Charge could therefore go up or down for future years.

Why must the Port go through a public inquiry on rail when planning permissions are already in place for the terminal development?

The terminal development must be preceded by a binding commitment from the Port to complete detailed road and rail works. The Pubic Inquiry into development of the Felixstowe Branch Line is expected to rule on how objectors concerns should be met and in this process will finalise pre-tender costs.

Will the Port undertake to audit the cost recovery position annually for the purposes of communicating changes in the expected term of the charge to customers?

The Port will review the position within the first year in order to determine the quantum of the charge and the term/collection rate to be adopted beyond 1st January 2009 and will consult with customers again at that time.

Customers in business in the ‘High Street’ would find it easier to support a charge raised against ongoing civil works, rather than against the promise of development – could the Charge not be delayed until such time as the Port is able to proceed?

A legally binding commitment to fund external rail upgrades has to be given by the Port before any construction can begin but before even this, the Rail Inquiry must find in favour of the changes proposed. Additionally extensive highway mitigation works must be completed and approved, yet if monies are not recovered and spent now, then the timeframe for development is very much delayed.

How does the bill reach £4m post-FSR inquiry without starting any ground works?

The approvals process for rail and road changes is lengthy and if it had not been continued at a technical level throughout the course of the Public Inquiry and to date any final development would be unacceptably delayed. No development can be undertaken until the Port commits to a legally binding agreement in respect of the external rail upgrades and no such commitment can be given until the detailed scope of the works has been approved and accepted by Network Rail and in the case of road upgrades by the Highways Agency. In all of these processes to date lies £4.0m in cost and a projected figure of £5.4m to the completion of the ongoing Rail Inquiry.

When will the charge be introduced?

The charge will be introduced with effect from 2nd April 2007.

How will the start date be applied?

Import full units discharged from vessels which berth on or after 00:01hrs Monday 2nd April 2007 will incur the Infrastructure Charge at time of out-gate.

Will all containers be charged?

The charge will be applied to full import containers only. Export full containers, those containers that are for transhipment and all empty containers will not be subject to the Infrastructure Charge.

How much will the Infrastructure Charge be?

Import full containers will attract a tariff rate of £5.50/container.

Why will the Port levy the Infrastructure Charge only on full Import containers?

The growth in demand for Imports within the UK is driving a need for further capacity development at the Port. With future demands on the road and rail network inland being principally to meet the growth in imports these movements will bear the charge. Conversely in 2006 more than 1.5 empty containers were exported for each full export and accordingly, with such latent capacity, the Charge will not be levied on exports. Transhipments via the quay to other UK ports utilising Felixstowe’s established coastal feeder networks ease the pressure on inland distribution routes & will not be charged.

Who will be charged?

• Import Full Containers (Non EU) = By container to the nominated clearing agent, as indicated at the time of out-gate.
  
  
• Import Full Containers (EU) = By container to the agent who made the Community Status declaration on FCPS / Destin8, as indicated at the time of out-gate.

What about the Agents/Declarants cost incurred in collecting this charge?

Our invoices will reflect this and will show a reduction, in respect of a handling fee per container. The net invoice charge to the declarant will be £5.00/container.

How will the charge be levied?

Import full Non-EU and EU containers will be charged out separately on a weekly basis, split by vessel, to the nominated clearing agent /manifest agent, as per current terms and conditions. Please note we can accommodate batch invoicing for volume users. The charge will be triggered when units are out-gated, or in the case of devans, at the time when the out-turn report is system confirmed.