UK City Council under fire for £16.7m fruit importer bail out
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."
But Chris Ward, Portsmouth City Council’s director of finance, said all loans are being repaid, "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."
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