Associated British Ports (ABP), which owns the port, and Southampton  Container Terminals (SCT), which operates the UK’s second largest container terminal in the port’s Western Docks, will invest up to £6m towards the total cost of the project. SEEDA itself will contribute some £5.8m.

The rail gauge enhancement will enable Southampton’s rail freight network to support 'high cube' containers, which at 9 ft 6 inches, are much larger than conventional containers but are becoming more and more common in the shipping industry. When the enhancement is complete by the end of 2010, Southampton will be able to move a far greater number of its containers by rail, which will remove thousands of lorry miles from the roads and thereby ease traffic congestion and help reduce carbon emissions.

Doug Morrison, ABP's port director at Southampton, said, 'We are absolutely delighted that Government has given the go ahead for this funding. The improvements to the port’s rail freight capabilities will be hugely beneficial, not only for the port and its users, but also for the city of Southampton and for the millions of people who ultimately rely on the port as a major hub for the import and export of goods. This will also help deliver improved competitiveness and growth both in the regional and wider national economy.'

SCT's managing director Campbell Mason added, 'The Government’s approval to award TIF funding to this project is fantastic news and will benefit all links in the supply chain. There is a worldwide trend toward the increased use of high cube-containers and the current constraints on Southampton’s rail connection mean that high cubes need to travel by road. The upgraded infrastructure is therefore very valuable as it will enable more containers to be handled by rail, providing a more environmentally friendly method of transporting goods around the UK.

Road users and the local community will also benefit through seeing less lorries on the approach roads to the terminal.'