MPs confirm substantial development aid funding given to P&O owners

Members of Parliament from the International Development Select Committee have revealed how substantial sums of UK development aid investment are being made to DP World, the parent company behind P&O Ferries.

In October last year, CDC, soon to be renamed British International Investment, took a minority stake in three African ports in a joint venture with DP World.  CDC receives funding from the UK aid budget.

CDC is to invest an initial $320m in the expansion of ports in Egypt, Senegal and the self-declared east African state of Somaliland. It also intends to funnel a further $400m into DP World ports and logistics operation.  This is said to represent the single biggest investment in the organisation’s history.

The revelations emerged during the Committees hearing with Nick O’Donohoe, the CEO of CDC (the UK’s development finance institution), and Caroline Read, the Director of Economic Cooperation and Growth Director at the Foreign Office.

The hearing follows the decision last week by P&O Ferries to controversially lay off 800 seafarers last week, in a move which has seen it face strong criticism for its fire and rehire employment practices.

The Committee’s Chair, Sarah Champion MP, said, “It is difficult to understand the rationale. The UK government is condemning the actions of DP World whilst its development finance arm is using hundreds of millions of pounds of taxpayers’ money to support a joint venture with them”.

Continuing she said, “The purpose of CDC is to invest in projects that have beneficial development impacts and would otherwise not be funded. Additionality is at the core of what they do. I’ve no doubt that CDC’s investment in this project would generate jobs and economic growth, but it is difficult to accept that a global supply chain company like DP World would have been unable to find an alternative investment partner”.

“It pains me to think of what $720 million could achieve for global health, women’s education or tackling extreme poverty.”