One of the UK’s biggest ports has accused Ben Houchen, Tees Valley’s high-profile Tory mayor, of wasting public money on protracted legal action against it, and issuing “inaccurate” statements about the reasons for the case.
The South Tees Development Corporation, the regeneration body chaired by Houchen, launched legal action against PD Ports in 2021 over access rights to the corporation’s land, in a case that is ongoing.
Houchen has stated publicly that the action is solely about PD’s access rights, but in a letter to port tenants seen by the Financial Times, PD claims that the case is aimed at extracting money from the port.
In his letter, Michael McConnell, PD’s group property director, cites documents in support of his claims, also accusing Houchen of risking “the public purse and the reputation of Teesside” by “pursuing a costly litigation exercise against the largest private sector employer in the Tees Valley”.
The STDC reiterated that it was simply seeking certainty over access rights.
PD Ports owns and operates Teesport, the country’s fifth-largest port by tonnage, and is the statutory harbour authority for the river Tees.
Both Teesport and the adjacent Teesworks, STDC’s controversial steelworks regeneration project, are part of the UK’s biggest freeport. Teesworks is now subject to a government inquiry due to accusations of poor governance and value for money, allegations denied by both Houchen and the project’s developers.
In spring 2021 STDC launched legal action against PD in an attempt to establish the extent of PD’s access rights over the corporation’s land. At the time PD’s owner, the investment giant Brookfield Asset Management, was about to put the port up for sale.
Court papers filed by PD accused the STDC of foul play, claiming its chief operating officer at the time, Jerry Hopkinson, was told by then-STDC board member Paul Booth that the corporation’s intention was to buy the port “at a discount” by denying access to its land and then “flip it to make a profit”.
The STDC said the comments “were made in a personal capacity and as such are not comments STDC recognises”. Booth said the “words attributed were not uttered by me and I will say so under oath if necessary”.
Subsequently the STDC entered into the bidding process for the port in the hope of adding it to the substantial existing regeneration project. However, Brookfield withdrew PD from the market in November 2021.
Since then the legal action over access rights has been continuing.
In his update to tenants, dated May 25 of this year, McConnell enclosed part of the internal “risk register” for the Teesworks project to support his argument that the STDC was continuing its legal action for financial reasons. The register identifies a failure to “secure future value” from the “issue on access” with PD as both a reputational and financial risk.
McConnell argued that a Facebook post last month, in which Houchen insisted the case was solely about determining access and that “nobody is suing for money or compensation”, was therefore “inaccurate”.
McConnell added that taxpayer costs for the action had risen. The STDC declined to comment on the costs.
In a statement, the STDC said it was solely seeking “to understand what, if any, access rights PD Teesport has across our site so that it can accommodate them”.
It added that should PD require access it does not currently have, that would need to be factored into STDC’s development plans for Teesworks, including assessing the value of any land required to provide that access.
It accused PD of “behaviour and misleading emotive language” that “has, regrettably, left us with no option but to seek this legal determination”.
Separately the Labour party plans to table a parliamentary vote on Wednesday relating to the government’s inquiry into Teesworks.
The inquiry will be carried out by a panel appointed by levelling-up secretary Michael Gove, rather than the public spending watchdog, the National Audit Office. Labour wants all correspondence relating to that decision released.