Leith docks rediscover their industrial heritage

THERE is a pub on Duke Street at the foot of Leith Walk that opens at six o'clock in the morning. In Leith's industrial heyday the bar was filled at dawn with thirsty dock workers who stepped in for a pint at the end of a night shift. But as industry declined in Edinburgh's historic port, the pub's clientele now no longer work on the docks.

While some of them have retained the habit of taking a drink or two first thing in the morning, the area is now bustling with younger residents who pass by in suits and heels on their way to offices in town.

Since the 1990s, there has been significant progress in transforming the industrial grit of the port of Leith into a haven of smart restaurants, bars and balconied flats. Albeit, as the morning drinkers on Duke Street would probably agree, there is still a long way to go.

In 2008, an ambitious masterplan to tackle a further 350 acres stretching from Granton harbour to the Leith docks was approved by City of Edinburgh Council, sanctioning the development of 16,000 flats, offices, shops and much more.

But even though the planning application was passed in record time, the economic crisis rendered the plans for Edinburgh's waterfront as worthless as the not inconsiderable amount of paper on which the proposals were drafted.

The dawn of 2008 ushered in no ordinary year. In January 2008, Australian infrastructure fund Babcock & Brown took a sizeable 20 per cent stake in Forth Ports - the area's largest landowner - sparking rumours it was looking to take control of the last publicly-listed ports business in the UK.

But the investor that would eventually become known as Arcus Infrastructure Partners only managed to get its hands on the prize in March of this year with a 746 million buyout of Fort Ports.

Despite the deal's long delay, it would have been early on that the true extent of the ravages of the property recession became clear to Forth Ports' chief executive Charles Hammond.

Several developers who were either planning to build or were actually on site in Leith collapsed or simply downed tools to weather the storm.

By the end of 2008, the value of Forth Ports' land was knocked down from 282m to just 60m, with more than 80 per cent of it deemed of "no immediate value" by property evaluators DTZ.

What this number made clear was that the investment model that had so far driven the transformation of Leith from a declining industrial zone to a shiny new waterfront haven would need to be scotched, forcing a massive about-face in how the area would develop.The result, three years later, is nothing less than a plan for the "re-industrialisation" of Leith. The core of this is a proposal to develop a massive 200 megawatt biomass plant, to be built in a joint venture with energy giant Scottish & Southern Energy (SSE) on the eastern-most dock which houses a - now mothballed - grain silo.

But what is only just coming to light is that the biomass plant is simply the first step in this re-industrialisation.

In 2008, the plan for the dock was to build houses, parks and possibly a museum or arena over the next 20 years, depending on market demand.

But instead, Forth Ports is set to scrap this plan entirely and make the dock the new manufacturing centre of a potential 100 billion industry developing offshore wind turbines for the North Sea.

This radical shift in approach was underpinned by last week's revelation in Scotland on Sunday that the flagship Ocean Terminal shopping centre was to be put up for sale by Forth Ports for 100m.

For Hammond, who has been a director of Forth Ports for a decade and who saw hundreds of millions come into the firm's coffers on the sale of overpriced land, the property game is over.

"Regeneration is now broader than flats and shops. It is about jobs and new industry," he says. "The renewables industry is about creating new income-generating assets. What encourages me is we have already received a number of expressions of interest from a number of parties."

One of these is Mitsubishi Power Systems Europe, which is eyeing the Leith port as a base for its 100m Centre for Advanced Technology. The Spanish wind turbine manufacturer Gamesa has also indicated it will move into the Dundee docks, where Forth Ports has a similar biomass plan.

The biomass plants are necessary to power the factories envisaged for the two ports.

Hammond also dangles the prospect that the facility, which would produce heat as well as electricity, could be used as the source of a new district heating system for the residents of Leith. However all this will require investment.

Recently de-listed Forth Ports will continue to tap as much government funding to support its development schemes as it can, but the onus will be on Arcus.

Stuart Gray, an Arcus representative who sits on the board of Forth Ports, stressed the hedge-fund-backed group's "long-term" investment position and its commitment to "adding value".

Undeniably, the changed emphasis on "re-industrialisation" is eagerly supported by the new owner.Arcus' founders, including Briton Simon Gray and Italian Toto Lo Bianco, have been focusing on a number of infrastructure projects in Europe for well over a decade.

In his offices on the rough-cobbled Prince of Wales dock, Hammond points out, on a blown-up aerial photograph of the area, the long finger of reclaimed land that makes up the largest section of the Leith docks, currently home to a desultory mish-mash of cargo handlers and storage sheds.

There is currently an issue at the tip of the peninsula, across from the furthermost flats on Western harbour, in that it may be too narrow to berth the vast ships that will be required to transport giant offshore wind turbines due to be made on the site. Forth Ports has already applied to the government for funding to widen the area out.

Planning approval for the energy plant and re-industrialisation of Leith docks is far from complete, and will be subject to what is expected to be a rowdy consultation with the local community, which is already up in arms about the look of the biomass plant and the impact of increased traffic.

The council has signalled that the plan will ultimately be sent to the Scottish Parliament for final approval.

While Hammond is enthusiastic about bringing thousands of jobs back into Leith, local residents and councillors feel betrayed. Hammond admits there is still some work to be done on "community consultation", but he insists: "Industrial development doesn't have to be ugly. It can be attractive in its own right."