A deep feeling of gloom fell over the port of Southampton as the news sunk in that the government had turned down the Dibden Terminal, a scheme seen by many as vital for the continued success of the city's docks and which would take it forward into the 21st century.

The port lies at the very core of the commercial life of Southampton and the surrounding region, generating an estimated £1.6 billion every year for the local economy and safeguarding thousands of jobs, but as a direct result of this Whitehall refusal a large cloud of uncertainty now hangs over the docks.

One port expert has already forecasted that Southampton is likely to feel the effect of this decision within 12 months as present customers take a close look at how their future demands will now be met.

With its decision the government appears to have turned its back on a raft of warnings from within the port and shipping industries which leaves the port of Southampton with a fight on its hands.

There is no danger that the port will wither away totally due to Dibden Bay not being developed as the city's docks handles many different trades besides containers including dry bulks, fresh produce and perishables, general cargo, liquid bulks, minerals and ores, passengers and cruises and roll-on/roll-off traffic.

As the port faces up to a future without Dibden Bay there is no doubt that the docks will go all out to maintain its position in the container trade as well as concentrating a great deal of effort on expanding its many other trades.

This fact is underlined by Andrew Kent, Southampton's port director, speaking just a short time after the government announcement.

"The future shape of the port will now be significantly different to that of the expanded port of Southampton which we had planned for,'' said Mr Kent.

"However, going forward, we will continue to focus on growing the port's business in areas where there is potential to strengthen our trade base.''

Despite this bullish approach there is no getting away from the fact that containers are a huge slice of the overall port trade and a highly significant part of Southampton's earnings from international trade.

Figures from Associated British Ports (ABP), owners and operators of Southampton Docks and the main force behind the moves to develop Dibden Bay, show that the city handled 1.38 million container units during 2003.

The dominant growth in this sector came from increased volumes in Southampton's trade with the Far East in general and China in particular.

Southampton's container berths in the Western Docks moves 50 per cent of all UK trade with the Far East and has services covering North and South America, the Middle East, India and Europe.

Global trade is growing rapidly, especially with the manufacturing powerhouses of the Far East, as bigger and bigger vessels carry more and more containers, and the problem in Southampton is that the present berths are now bulging at the seams with little room to manoeuvre.

Faced with this situation there are fears that the big shipping companies will now change course and send their ships loaded with containers to other ports, both in the UK and the nearby European mainland, that do have the room or that are actively constructing new berths and so leaving Southampton with dwindling trade.

Dibden Bay was to be ABP's answer, providing much-needed new berths and giving the city the future capacity to cope with the constant rise in traffic, but the government "no'' to the development has the potential to endanger the very existence of the deep-water trade in Southampton.

Now there are concerns that without the Dibden Terminal earlier warnings about a possible downturn in trade for the port of Southampton could now become reality.

One of the bluntest of these came from Chris Bourne, European managing director of shipping line MOL, one of Southampton's major container customers.

"It is quite simple: if there is no Dibden Bay, ships will sail by the port and Southampton will become a minor port as others grow,'' said Mr Bourne.

"If this plan is not approved, what is the future? We want to work with Southampton for the next 20 or 30 years, but if you can't take our ships we will go elsewhere to a place that can.''

As Southampton waited for the government announcement, Bo Lerenius, ABP's group chief executive, also issued this stark message: "The port has to grow or it will decline. There is no option to stand still.

"The development of the new Dibden Terminal would both protect the region's success and encourage further growth.

"It would create almost 3,000 new jobs - around 1,800 on site and 1,100 construction-related jobs over a ten-year period.

"These jobs would offer apprenticeships and training, new career opportunities in management, skilled and semi-skilled professions and would be a major benefit to school leavers in the local community.

"If Southampton cannot expand to meet demand then the world container shipping alliances will take trade to other European ports outside the UK, which have their own well-advanced plans.

"The port of Southampton now stands at a crossroads: the proportion of goods shipped by containers is continuing to grow, with UK demand for deep-sea container handling facilities forecast to double over the next 12 years.''

PORT TRADE IN SOUTHAMPTON DOCKS INCLUDE:

Dry bulks

Southampton is one of the UK's leading cereals-exporting ports as well as a growing force in the import-bulk cargoes sector.

The terminal in the Western Docks handles cargoes such as sand, aggregates, gypsum and marble chippings.

A purpose-built glass-processing facility has also been constructed at the port. Two export grain silos are situated at the port's Eastern Docks. One, operated by Soufflet, is a 28,000-tonne capacity site, while the other, manned by Grainfarmers has a 16,000-tonne capacity.

Fresh produce and perishables

As the sole UK import port for Canary Islands' produce, Southampton has extensive specialist facilities dedicated to this trade.

Fresh produce regularly handled at the terminal in the Western Docks includes tomatoes, peppers, avocados and cucumbers.

Liquid bulks

Southampton's liquid bulk traffic comprises mainly crude oil and alcohol.

Bacardi Martini's only UK bottling and distribution facility is situated in the Western Docks, handling more than nine million litres of imported wines and spirits every year.

The Esso and BP oil refineries handle more than 25 million tonnes of oil and petroleum-related products.

Passengers and cruises

Southampton contines to dominate the UK cruise industry, with both P&O Cruises and Cunard basing their UK fleets at the port.

Other cruise companies regularly use the port, including Fred Olsen Cruise Line, Saga, Princess Cruises, Royal Caribbean International, Crystal Cruises and MyTravel.

Southampton's cruise business has doubled in the last five years, with the port now handling more turnaround calls than all the other UK ports combined.

Roll-on/roll-off

The port has experienced major growth in this sector, handling more than 600,000 vehicles each year.

Regular deep-sea and short-sea services by all the major companies serve Australasia, the Far East, the Middle East, Africa and the USA as well as the Mediterranean and mainland Europe.

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