Council in bid to ditch cruise liner terminal and bring in a private operator

Liverpool City Council is considering moves to weigh anchor on its cruise terminal journey and hand over to a private operator.

A Liverpool City Council Scrutiny Committee paper, penned by Angie Redhead, the city’s head of assets and former Cruise Liverpool boss, proposed four options for the facility.

Option one is for the council to cease to operate the cruise liner berth. Option two is that the council procures a third-party operator to manage the berth on its behalf with financial liability for repair and maintenance remaining with the council. Option three is that the council continues to own and operate the berth, which is not a statutory core service. And option four involves the council surrendering its lease and transferring the berth to the Statutory Port Authority, which is Peel Ports. This option depends on the Port Authority confirming that the council will be removed from all future financial risk and capital liability for repair and maintenance of the berth.

The paper says that, on analysis, option four is proposed as Liverpool will continue to receive the economic benefit from cruise passenger spend in the city, estimated to be around £17m, without any financial contribution from public money.

The berth was built in 2006/07, using a combination of European Regional Development Fund (ERDF) Objective 1 funding and North West Development Agency funding, to support the vision for the revitalisation of the Mersey waterfront.

When the council originally built the berth it was intended that a third-party operator would undertake the operation and take on the financial liability.

However, with no guarantee of business growth and slim profit margins, there was no appetite from the market to take on the risk and so securing such a third party proved unsuccessful.

Commercial income for berthing invoiced in 2022/23 was £1.292m. The terminal currently handles more than 100 cruise ships a year. However, the facility made a one-off overall loss of £8.542m, although once adjusted for capital write offs and re-valuations, this loss is reduced to £0.328m.

The September 2023 budget monitor is forecasting a loss of £0.734m for 2023/24 against a budgeted loss of £1.040m.

The main annual costs are employee costs of £0.553m, premises costs £1.023m, and supplies and services of £0.930m, with £1.016m for ropes, stevedores and security directly recharged to clients and recovered as part of the service fees to cruise clients.

However, it is understood that an unnamed global operator of cruise ship terminals is in talks with the council to take over the running of the berth, and possibly take on responsibility to build a new £88m facility, which has been mothballed.

Talks with the third party operator were already under way but they ended abruptly when the pandemic hit world travel.

But the cruise industry has bounced back strongly from COVID-19 and the council is confident its bid to attract a private operator will be successful.

The proposal will be considered by councillors next Wednesday, November 15.