One of the UK’s largest port cities has accused Ben Houchen, the high-profile Tory mayor of Tees Valley, of wasting public money on protracted legal action against the port and making “inaccurate” statements about the reasons behind the case .
The South Tees Development Corporation, the regeneration body chaired by Houchen, took legal action against PD Ports in 2021 over access rights to the company’s land, in an ongoing case.
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 the case is aimed at extracting money from the port.
In his letter, Michael McConnell, group property director of PD, cites documents in support of his claims, also accusing Houchen of risking “the treasury and reputation of Teesside” by “bringing a costly lawsuit against the largest private sector employer in the Tees Valley”.
The STDC reiterated that it was simply seeking certainty about access rights.
PD Ports owns and operates Teesport, the country’s fifth largest port by tonnage, and is the statutory port authority for the River Tees.
Both Teesport and adjacent Teesworks, STDC’s controversial steel mill regeneration project, are part of the UK’s largest free port. Teesworks is now subject to a government investigation over allegations of poor governance and value for money, allegations denied by both Houchen and the developers of the project.
In the spring of 2021, STDC initiated legal action against PD in an effort to establish the extent of PD’s access rights to the company’s country. 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 charged the STDC with foul play and alleged that then-chief operating officer Jerry Hopkinson was told by then-STDC board member Paul Booth that the company’s intent was to purchase the port “at a discount” by to deny access to his 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 that STDC acknowledges”. Booth said the “attributed words were not uttered by me and I will say so under oath if necessary”.
Subsequently, the STDC entered the bidding process for the port in the hope of adding it to the sizeable existing regeneration project. However, Brookfield pulled PD from the market in November 2021.
Since then, legal action over access rights has continued.
In his update to tenants, dated May 25 of this year, McConnell included part of the internal “risk register” for the Teesworks project to support his argument that the STDC continued its legal action for financial reasons. The registry identifies a failure to “secure future value” of the “problem with 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 “no one is suing for money or compensation” was therefore “inaccurate.”
McConnell added that taxpayers’ costs for the action had risen. The STDC declined to comment on charges.
In a statement, the STDC said it was merely trying to “understand what, if any, access rights PD Teesport has to our site so it can accommodate them.”
It added that if PD needs access it doesn’t currently have, that should be factored into STDC’s development plans for Teesworks, including assessing the value of each land needed to provide that access.
It accused PD of “conduct and misleading emotional language” which “unfortunately has left us with no choice but to seek this legal determination.”
Separately, the Labor Party is set to take a parliamentary vote on Wednesday regarding the government’s inquiry into Teesworks.
The investigation will be conducted by a panel appointed by Secretary Michael Gove, rather than the government spending watchdog, the National Audit Office. Labor wants all correspondence related to that decision to be released.