P&O owners say government 'slow' over threat to supply routes

Simon Jack
Business editor
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Sultan Ahmed bin Sulayem rejects criticism of its request for aid.

The owner of P&O ferries has said the government has been "slow" to react to the crisis facing vital supply routes.

The ferry company, which transports 15% of all goods in and out of the UK, has applied for financial support to see it through the coronavirus lockdown.

The head of Dubai-based DP World told the BBC that P&O needs £257m in aid to avoid collapse and has applied to the UK government for £150m of that.

But Sultan Ahmed bin Sulayem said he has yet to get a response from the UK.

The DP World chairman and chief executive said: "P&O plays a vital role in the UK and thousands of jobs depend on this company. We have to be sure that when this is over we can bounce back and save these jobs.

"We have applied to the UK government to support the company to save the jobs of these people. The government has been slow. We need to safeguard these jobs - a lot of people's lives depends on this company."

As leisure passenger numbers have collapsed, moving freight only between the EU and the UK has become economically unviable. P&O has taken seven ships out of service.

P&O has also furloughed 1,400 workers, which will see the UK government paying 80% of their wages.

Image source, Press Association

As well as P&O, DP World owns the ports of Southampton and the London Gateway, as well as dozens of terminals around the world. Last year it made profits of more than £1bn on revenues of more than £6bn.

A dividend of £270m is due to be paid out to DP World shareholders this week. However, Mr bin Sulayem defended P&O's plea for financial assistance.

"DP World has never taken a penny out of P&O. Any profits we have made we have reinvested in new vessels," he said. "DP World owns many businesses around the world. You cannot just take money out of them to put into a company in another place - it doesn't make sense."

The UK Treasury may disagree. It is has taken a hard line with airline Virgin Atlantic, which says it may not survive without a £500m government support package. The Treasury has insisted it must ask its own shareholders (Delta Airlines and Sir Richard Branson) and exhaust every other private sector fund raising avenue possible.

Mr bin Sulayem also said that Covid-19 would change global trade forever. He said that the economic shock of China's manufacturing shutdown has made companies around the world reconsider their supply chains' reliance on it.

"You cannot have everything being made in one place. Supply chains will need to be shorter," he said.

The Department for Transport said that £27m in subsidies have already been announced for critical ferry delivery routes, some of which were operated by P&O.