Start-up costs of the Humber's new Freeport company are expected to be funded by a £3 million loan from the region's four local councils.
Details of the financial support package are currently the subject of on-going talks between the authorities and the new company, which is due to submit its full business case to the government at the end of the month.
However, senior councillors in Hull were told this week it was anticipated the company was unlikely to be in a position to financially support itself for at least three years.
Read more: Stena Line and ABP agree £100m 50-year deal for new Humber terminal to support UK-Europe freight
Eventually, income from a proposed land levy on all tax sites under the freeport's remit is expected to cover the company's running costs. The levy will apply to landowners and tenants at each site.
Retained business rates from each site will also be pooled for use by the company.
Hull, East Riding, North Lincolnshire and accountable body North East Lincolnshire Council still have to sign-off the loan deal although Hull's cabinet this week agreed in principle to guaranteeing up to 25 per cent of the required borrowing.
City council leader Cllr Daren Hale said the issue highlighted the importance of public funding and the need for the new company's decision-making to be fully accountable and transparent through board membership roles for councillors, regular progress reports back to each council and performance-related targets linked to any loan.
He said: "We are not going to lend them a load of money if we are not going to have some skin in the game, that's got to be the bottom line on that.
"I think there is this myth between the private and the public sector but both the pandemic and an issue like this just go to show it's an artificial divide.
"Normally it tends to be when there's a risk to take, they (the private sector) ask for the local authority to stand behind the risk.
"That's been my experience on this council over many years and I don't think anything ever changes so if we are going to take that risk we need to ensure there's a share of the benefits that flow from that."
A governance model for the new company has yet to be agreed but is expected each council will have a representative on its board, sitting alongside private sector leaders. As yet, an executive team to run the company has yet to be confirmed.
The Humber Freeport's three new tax zones include one at Goole next to the new Siemens rail factory and another covering several sites in east Hull such as the Port of Hull, ABP's Humber International Enterprise Park near Paull, the Yorkshire Energy Park development near Hedon and the Saltend Chemicals Park.
The third tax site is the proposed Able Marine Energy Park on the South Bank near Immingham together with ABPs nearby coal stock yard.
Incentives for new businesses moving to the sites include accelerated capital allowances, relief from stamp duty and land taxes, relief from business rates and a three-year break from having to make employer's National Insurance contributions.
The company will also oversee a number of proposed customs zones where port operators and companies will be able to defer tax duty and import VAT on goods.
Keep up-to-date with all the latest developments - follow BusinessLive Humber on Twitter and LinkedIn.
