MORE than £16m of taxpayers’ cash has been used to prop up a Portsmouth shipping company to stop it from folding.
Figures from annual Portsmouth International Port records show fruit importer MMD has been given £16.7m in grants from Portsmouth City Council since the local authority took on the running of the business in 2008.
Council officials admit MMD is a ‘loss-making entity’ - but putting money back into the business is essential in ensuring commercial activity thrives at the port. The council has also generated millions in income thanks to its investment.
But Southsea resident Jerry Brown, who compiled the port statistics in a dossier to the council, is concerned that so much money is being blown on keeping MMD afloat.
Mr Brown said: ‘You could see the justification for taking on the business in 2008 because there were 200 jobs at risk; you put the money in and you then turn the business around.
‘If you buy a business, you have to have a cash pot to execute the transformation. Yet this money has been used to make up for the businesses’ losses.
‘There’s the £16.7m that’s been given to the business, then there’s a £6m loan, it’s got losses of £2.7m that’s not been accounted for yet, and then there’s a £600,000 deposit so MMD can carry on operating.
He added: ‘I would say it needs more management.’
But Chris Ward, Portsmouth City Council’s director of finance, said all loans are being repaid.
He said: ‘The council has made a significant investment in the facilities and running of MMD since it acquired the business in 2008.
‘That investment has been made in order to turn the business around and provide high-quality facilities which are ensuring current clients remain for future years, and will attract new clients in an increasingly competitive market.
‘That in turn has protected income streams for the council, avoiding cuts as well as protecting jobs.
‘Over the period from acquisition the council has received in excess of £16m income from MMD and is receiving the repayments of all loans advanced.
‘This excludes the additional trade and income the port has attracted from cruise and Transfennica services which located in Portsmouth due to the flexibility offered by combined facilities of the port and MMD.’
‘Since acquisition, the volume of trade through MMD has increased by almost 30 per cent and the business continues to grow.’
Councillor Luke Stubbs, Tory cabinet member for planning, regeneration and economic development, said: ‘The justification for having MMD is that it supports turnover at the port.
‘As a loss-making entity, were it not supported by the city council, MMD would likely close and if that happens, it would take away the fruit importing business and the turnover from the port.
‘Losses have reduced in recent years and the council continues to improve that situation further.’