Dermot Ahern Publishes Key Reports on Ireland’s Commercial Seaports

My personal perspective

While I do not wish to pre-empt in any way consideration of the consultants report or indeed the submissions received on foot of the consultative process, I would like to give my personal perspective on key principles which should be embodied in our ports policy and some of the issues which need to be conclusively addressed.

• Our economy needs a vibrant and thriving ports industry, an important national strategic asset.

• Our ports are vital gateways for commercial freight and sea passengers inwards and outwards.

• The time is opportune to initiate a full re-assessment of current ports policy in terms of how ports are meeting the needs of their customers, overall national needs and how best they can finance any necessary new infrastructure having full regard to the environment and those local communities living in close proximity to port facilities.

• We need to establish definitively what future role should the Government / State have in relation to the ports.  Clearly it will retain an overall strategic policy role but should it continue to confer by statute management / operational powers, the commercial mandate within which they operate and the power to appoint company boards to oversee and give direction to management?

• The Department, Port Companies and Harbour Authorities, will need to work in partnership to achieve enhanced roles for gateways, hubs and the regions, in line with the Government’s National Spatial Strategy and the Government is particularly mindful of the need to diversify business to regional ports.

• We need to ensure on a continuous basis that safety standards and environmental practice in ports are of the highest standards with appropriate auditing.

• Port property / land assets need to be developed on an sustainable basis in line with balanced regional development, in accord with best practice in terms of local communities and generating maximum returns to contribute to future investment needs.

• There needs to be sufficient and fair competition within and between ports.  This will involve better regulation of the ports industry given its dominant monopoly State position.

Port Assets / Port Estates

I am impressed by the comprehensive research undertaken by the Port Estates Task Force and intend to initiate a programme of development for port property, based on the findings of the report.  My Department will be writing formally to each port company asking them to commission a comprehensive audit of port properties and programme of property management. This formal audit will establish definitively the estates available for development within Irish ports and scope for such developments.

I am particularly keen to identify port properties which are clearly surplus to future commercial development needs.  The audit of port properties should also identify properties and assets/ facilities, which have amenity development potential but no significant commercial value. Once such properties have been identified they can be considered for sale or for their development potential while in ports ownership, so as to maximise the return to the State.

Dormant Port Estates

It is important that also that dormant ports, which have no further potential for commercial trade, be allowed to cease trading so that these valuable port assets can be developed for other purposes, such as amenity use.  There can be no doubt that the current ownership structures for many smaller ports are unsatisfactory. Where it is clear that a port no longer has any commercial operating basis, I intend to remove the onus on such ports to fulfil a function as a trading port. This will allow them to devise workable exit strategies.

The Port Estates Task Force recommends the transfer of ownership of non-trading ports to Local Authorities, and I am initiating discussions for such transfers with my colleague the Minister for Environment and Local Government.

I am also interested in examining the potential for PPPs or private development of our smaller, non-trading ports, where such ventures could enhance facilities or amenity values, while at the same time safeguarding tradition rights of public access.

The public interest is not served by allowing valuable regional harbours to languish under out-dated governing legislation, without adequate staff or resources to manage their financial affairs. Many of these ports have significant amenity potential and I am anxious to examine all the options for the development of these ports.

Strategic Development Zones

In line with the recommendation of the Task Force, I intend also to examine the potential for incentives to develop strategic development zones, so that dormant port estates can be developed to their optimum potential. I intend to consult widely on the possibilities for such an initiative and have asked my Department to initiate discussions with Port Companies, Harbour Authorities and relevant Government Departments with a view to kick-starting this initiative.

5 Year Plans

Hand in hand with the formal audit of port properties I will be requesting each port to ensure that their detailed 5-year development plans will:

• Be framed within the long term strategic plan for the sector

• Establish clear commercial and operating targets

• Establish lines of consultation / communication with Local Authorities

• Consider the full economic role of the port in regional development 

• Embrace forms of revenue other than cargo handling and possibilities for relocation of activities outsider the ports

• Consider alliances such as Public Private Partnerships with the private sector

• Establish systems of consultation / communication on local, environmental and residents groups needs, focusing in particular on consultation with Local Authorities

• Adopt radical and innovative thinking in relation to funding their own infrastructural needs

• Identify pilot projects for design, construct, operation and finance of new infrastructure

• Review by-laws to ensure that they reflect current requirements and provide for regular review mechanism

• Establish partnership models to assist in modernising local work practices.

I am determined to ensure that Ireland’s port assets make a significant and competitive commercial return and that potential social returns are also given a high priority in each port’s development plan.

I note also the recommendation of the High Level Review in relation to the application of the Landlord and Tenant Act in relation to port properties. I am interested to hear the views of the stakeholders on this issue and will consult with my Government colleagues on the practicalities or otherwise of changing the current regime.

State Foreshore at commercial ports

The question of ownership of State Foreshore is also addressed in the Port Estates Task Force Report and High Level Review of Ports. The proposal to transfer these state assets to port companies would have obvious benefits for the ports and serve as an incentive to development of the port estates. I am concerned however that such transfer could be perceived as permitting ports to engage in untrammelled development without due regard to local communities.  Given the emphasis given in both reports to environmental, amenity and local concerns, I believe that any decision to transfer State foreshore to ports would have to be taken on a case by case basis. It would be essential also to have in-built safeguards which take into account all of the local environmental, amenity, and community concerns as well as potential for port development.

Governance, Ownership and Regulation of Ports

Privatisation

Notwithstanding the recommendation of the High Level Review on Ports that privatisation of port assets is not an immediate option, I am anxious to explore the possibilities and the level and spread of interest which exists for privatisation

Clearly the revenue which could accrue to the State from the sale of port assets could be attractive and if carefully managed, could result in more competitive port infrastructure and services.

I believe that any privatisation option will require extensive research and discussion on public interest, social, competition and legislative aspects.  I am anxious to hear the views of stakeholders and interested parties on this issue and will, in the context of this consultation process, ask my Department to examine the matter further.

Mergers

The High Level Review of Ports recommends that a number of regional ports should be merged, including Galway and Rossaveal, Cork and Bantry. We need to come to a view as to whether there are too many or too few ports and port companies having regard to the need to maximise competitiveness.  I remain to be convinced of the benefits of amalgamation of port companies in all cases, although I am prepared to examine the situation on a port by port basis and to take into account fully the views of individual ports and their stakeholders and the distinct regional and commercial factors which apply to individual ports.  Where individual port companies and regional harbour authorities feel that mergers would benefit development, I urge them to come forward with devolved proposals and engage in local consultation on the issue.

Governance

In accordance with the recommendations of the High Level Review of Ports, I am initiating a comprehensive review of Corporate Governance of the Ports by my Department, reflecting my responsibility as shareholder.

As part of this review, I will be establishing formal liaison arrangements between my Department and the Department of Transport. It is important to ensure an integrated transport policy between roads, rail and ports.  The new formal liaison arrangements with the Department of Transport, will allow my Department to ensure seamless, integrated transport systems for our ports.

Port Companies, the local Community and the Environment

I welcome the recommendations of the Port Estates Task Force, that Ports should give a strong emphasis to Local Authority involvement and liaison with the local community. The High Level Review also points to the potential benefit of establishing Port Users Forum. I intend to establish a National Port Users’ Forum in 2003. The goal of this Forum will be the achievement and maintenance of a quality service in Irish ports by enlisting the full support and commitment of all the parties concerned.

I am also asking each Port Company to ensure that their 5 year plan allow for the establishment of formal lines of consultation / communication with local authorities. Our ports are important landmarks, often in strategic and densely populated areas. While a port’s primary concern must be to deliver quality access and transparent services to exporters and importers, it is vital that port development proceeds in harmony with environmental and community needs.

Conclusion

In conclusion, the size and location of ports for historical and geographical reasons are not necessarily a product of rational development but rather of an evolution, which occurred because local communities and industry developed ports for their own needs.  It must be accepted that our major ports currently constituted into 10 State port companies, together with Rosslare Port and the partially privately owned Greenore Port, are firmly rooted in the communities they serve.  They also have established linkages with connecting roads and rail and established maritime access channels by sea and river.

The challenge is to ensure how best they can manage their businesses competitively, safely and sustainably into the future and to devise an improved policy framework to deliver on those management objectives.

In my view competition, as far as practicable, combined with good governance and accountability together with more private sector involvement including a pro-active approach to more P.P.P.’s and joint ventures, must feature large in a new ports policy.