Dibden Bay will cost £600m if it goes ahead - but ABP remains confident it can make a profit. It will boost the strength of Southampton as a trading port.

That was the prediction of Southampton port director Andrew Kent at the public inquiry into plans for a dock extension between Hythe and Marchwood.

Associated British Ports, which runs the Southampton port operation, had, he said, already "decided to invest £30m over five years in promoting the Dibden terminal".

When asked if the company was aiming to make a profit from such aspects of the scheme as the railway sidings, he said: "ABP will have generated something like £600m and we will be looking to obtain revenue from all aspects of it."

On the question of the ABP group's target of 15 per cent profit on its investment, he said: "There can rarely, if ever, be a risk-free investment where a particular internal rate of return can automatically be guaranteed in advance.

"The 15 per cent is necessarily a target which the group seeks to achieve and which guides its approach to investment."

But he pointed out that the "considerable sums of money which ABP continues to expend on promotion demonstrate the robustness with which ABP views the project.

"This is in my view a project which will provide a return above its marginal cost of capital. It is therefore commercially viable."

As well as stressing the importance of Dibden Bay in increasing Southampton's strength as a port and preventing it from sliding backwards, Mr Kent also spoke of the importance to ABP of Southampton Container Terminals, which runs the present container activity in the Western Docks.

Scotching suggestions that SCT could lose out if Dibden Bay went ahead, he pointed out that ABP was a 49 per cent shareholder in SCT, and added: "We actually have a very significant financial interest in ensuring that SCT continues to be successful. If we did something to take business away from SCT and put it somewhere else, we would very much be abandoning interest in SCT."

He also pointed to the investment in cranes and other container-handling equipment in the present Western Docks operation and reflected: "It doesn't have a very high secondhand value!"