Written Representation: Heysham Port regarding the application for Development consent to complete the Heysham to M6 Link Road IPC Reference: TR010008 On behalf of Transport Solutions for Lancaster and Morecambe (TSLM) Unique Reference: 10015381 7th May 2012 1 Introduction 1.1 The port of Heysham is one of several west coast ports traditionally serving the Irish and Northern Ireland sea freight market. One of the arguments put forward for the HM6L is that the port is fast growing and well placed to capitalise on a growing market for sea freight transport between the west coast, Irish and Northern Ireland ports. Whilst port related activity and employment is to be welcomed it is also clear that Heysham is a relatively small player in a rather volatile market and arguments for a new road costing upwards of £120 million should not be based on the extreme uncertainty and unpredictability of Heysham’s importance as a west coast port over the next 56 decades. It is also clear that the Port of Liverpool which like Heysham is part of the Peel Ports group has the potential to increase its throughput by approximately 70% by 2030 (Mersey Ports Masterplan 2011) and that Liverpool’s geographical location near to very large centres of economic concentration and associated origins and destinations for freight traffic will give Liverpool a significant competitive advantage over Heysham during the period covered by its Masterplan. 2 Heysham and Irish Sea traffic 2.1 The Port of Heysham exists in a highly competitive market occupied by at least 6 ports. Table 1 lists these ports which we will designate as the “Irish Sea Group” or ISG and lists the annual tonnage at 3 time points Port Traffic of the Irish Sea Group, 200-2010, in thousands of tonnes Heysham Fleetwood Liverpool Stranraer Cairnryan Holyhead TOTALS 2000 3723 1530 30421 1506 2283 3444 42907 2005 3676 1635 33775 1155 3274 4147 47662 2010 3461 1137 30020 1017 2634 2658 40927 Source: Port Freight Statistics: 2010 Final Figures, Department for Transport, September 2011 http://assets.dft.gov.uk/statistics/releases/port-freight-statistics-final-2010/portfreight-statistics-full-summary.pdf 2.2 2.3 Table 1 reveals some basic characteristics of Irish Sea freight traffic: Heysham was responsible in 2010 for 8.4% of the total freight throughput in this port group Irish Sea freight traffic declined by 5.3% in the period 2000-2010 and declined by 15% in the period 2005-2010 Heysham’s’ figures show a small decline of 1.3% in the period 2000-2005 and a decline of 7.1% in the period 2000-2010 These data are also discussed in a Lancashire County Council report revealing the problem of decline at the Port of Heysham and the relatively small scale of port activity in Lancashire (0.9% of the UK total). The report summarises port traffic in the following table revealing an 8% decline at the port of Heysham in the period 1997-2009: Table 1A Lancashire and other selected UK ports, foreign and domestic traffic, 1997 to 2009 Traffic (thousands of tonnes) 1997 Grimsby and Immingha m London Milford Haven Tees and Hartlepool Fleetwoo d Heysham Lancaster 1999 2001 2003 2005 2007 Percentag e change 19992009 2009 47,991 49,757 54,831 55,931 60,686 66,279 54,708 10.0 55,692 52,206 50,654 51,028 53,843 52,739 45,442 -13.0 34,518 32,187 33,192 32,737 37,547 35,496 39,293 22.1 51,249 49,316 50,842 53,842 55,790 49,779 39,183 -20.5 1,362 1,368 1,608 1,624 1,635 1,772 1,327 -3.0 4,069 121 3,370 112 3,824 117 4,083 156 3,676 111 3,586 123 3,102 121 -8.0 8.0 Liverpool 30,841 28,913 30,288 31,684 33,775 32,258 29,936 Manchest 7,939 7,825 7,879 6,088 7,222 8,079 6,670 er 3.5 All UK 558,53 565,61 566,36 555,66 584,91 581,50 500,86 ports 0 4 6 2 9 4 3 Source DfT: Maritime Statistics -10.9 -11.4 Source: http://www.lancashire.gov.uk/office_of_the_chief_executive/lancashireprofile/main/ maritime.asp Ship arrivals at Heysham have shown a 40% decline in the period 1999-2009: Table 6 Ship arrivals, 1999 to 2009 Number of vessels 1999 Fleetwoo d Lancaste r Heysham 2001 2003 2005 2007 2008 Percentag e change 19992009 2009 787 965 909 888 931 461 752 -4.4 225 206 225 145 151 134 163 -27.6 3,484 2,922 2,390 2,701 3,290 2,490 2,086 -40.1 United 153,96 145,43 152,89 146,18 139,66 130,55 119,03 -22.7 Kingdom 1 4 6 2 2 1 8 The arrivals recorded relate to movements of all sea-going vessels of 100 gt or over. Source: http://www.lancashire.gov.uk/office_of_the_chief_executive/lancashireprofile/main/ maritime.asp 2.4 A similar story is revealed in Isle of Man port statistics (Isle of Man Government, 2011). The Isle of Man has been linked to the port of Heysham for a very long time but in the period 2000/01 to 2009/10 general freight in tonnes (excludes oil and gas) declined from 95022 to 79472, a reduction of 17%. The decline in the period 2005/6 to 2009/10 was 19%. 2.5 A recent Competition Commission report (Competition Commission, 2011) drew attention to the economic problems associated with Irish Sea traffic: 2.6 A recent study of NW ports (NWDA, 2009) identified the unpredictability of market conditions applying to Irish Sea traffic and the uncertainty surrounding which port would actually benefit from changes in those market conditions: Source: NWDA (2009), page 34 2.7 Irish sea freight traffic and the Port of Heysham do not exhibit long term, sustained, vigorous growth and if a commercial organisation were intent on putting together a business case for new investment these data would not provide a credible evidence base for borrowing money or for asserting a rate of growth into the future that would produce an acceptable rate of return on the investment. It is a telling point that no commercial organisation connected with the Port of Heysham or the nuclear power station at Heysham has come forward with any financial support for the HM6L. If the HM6L is seen as an important component of the economic success or functioning of port or nuclear power stations it would be reasonable to expect some financial contribution from both. None has been forthcoming. 3 Capacity issues on Irish Sea freight routes 3.1 Ireland and Northern Ireland have a combined population of 6.4 million which is 1.2% of the European Union total of 501 million. Ireland has a service based economy with 66% of total employment in services. The combination of a relatively small population and a relatively high service-based economy means that trade flows between the UK, Ireland and Northern Ireland are likely to remain relatively small. This relatively small amount of freight movement is served by a high number of ports. These are listed below Northern Ireland Ports Irish Ports Drogheda Dublin Dundalk Dun Laoghaire Cobh Waterford Rosslare Source: The Irish Maritime Transport Economist, Volume 8, April 2011 http://viewer.zmags.com/services/DownloadPDF UK Ports: Stranraer, Cairnryan, Heysham, Fleetwood, Liverpool, Holyhead, Fishguard, Pembroke 3.2 Referring back to Table 1 we have a situation with approximately 40 million tonnes of freight handled by 6 UK ports and having the option of utilising 10 Irish and Northern Ireland Ports. Whilst there are no specific data on port capacity on Irish Sea freight routes the offer of 6 UK ports and 10 Irish/NI ports to deal with freight from and to a relatively small regional economy (1.2% of the European Union population) can be regarded as generous and subject to volatility as operators switch traffic between ports in response to their own commercial imperatives. 3.3 This shifting of traffic between ports is likely to be a continuing feature of Irish Sea freight traffic and adds to volatility and uncertainty. A recent example of this shift occurred between Fleetwood and Heysham: Source: The Irish Maritime Transport Economist, Volume 8, April 2011 http://viewer.zmags.com/services/DownloadPDF Page 23 Another example is the possibility that the Isle of Man Steam Packet service will shift to Liverpool: THE Steam Packet has signalled it is considering pulling out of Heysham harbour and concentrating its services on Liverpool instead. In a radio interview, chief executive Mark Woodward said Liverpool was a ‘clear favourite’ of the majority of passengers and freight customers. He said that the creation of a bespoke, in-river berth at Liverpool would be ‘serious option’ for the Steam Packet looking to the long-term, allowing the use of bigger and more capable ships. Mr Woodward’s comments came as Liverpool city councillors revealed they were in talks with the Steam Packet about sharing the landing stage of a new River Mersey cruise liner terminal at the Pier Head. In his interview, Mr Woodward said there may well be arguments about whether Heysham was the right harbour for the company in the long term. He said the Steam Packet had long and historic links with Liverpool which was ‘clearly the destination of choice’ for the majority of passengers and freight customers. Source: Isle of Man Today, 7th February 2012 http://www.iomtoday.co.im/news/isle-of-man-news/could-steam-packet-pull-out-ofheysham-1-4218784 3.4 Volatility also occurs from year to year in response to market conditions and changes in the macro-economy. Irish Sea freight traffic declined by 18% in 2009 when compared with 2008 and this overall aggregate decline included a decline of 9.5% in Ro-Ro traffic According to the Central Statistics Office (CSO), the amount of goods handled by Irish ports during 2009 fell to 41.9m tonnes of goods, compared with 51.1m tonnes in 2008. Goods received decreased by 19.5pc in comparison with 2008, while goods forwarded fell by 14.5pc. Meanwhile break bulk and other goods traffic decreased by 47.5pc in the year, roll-on/roll-off traffic by 9.5pc, lift-on/lift-off traffic by 15.6pc, liquid bulk traffic by 9.1pc, while dry bulk traffic decreased by 29.7pc Imports accounted for 69.3pc of the total tonnage of goods handled while exports accounted for 30.7pc, the CSO figures showed. The annual port figures also showed a 10.2pc drop to 13,223 in the number of vessels arriving into Irish ports in 2009, compared with the 14,729 reported in 2008 Source: http://www.businessandleadership.com/leadership/item/23978-irish-port-traffic-falls18 3.5 A final source of volatility can be found in the very ambitious plans of Peel Ports for port development in Liverpool. The argument normally made in favour of Heysham emphasises that it is well placed to capture road freight for the Irish/NI market because it minimises road freight distance and provides the industry with a much better offer of cheaper sea miles compared to expensive road miles, applies a fortiori to Liverpool. Liverpool is a “much better bet” than Heysham in a world dominated by the desire to minimise road miles and take advantage of cheaper sea miles. This “better bet” also brings Manchester into the market for Irish Sea traffic and a higher level of use for the Manchester Ship Canal adding yet more capacity to Irish/NI freight traffic routes and more competition for Heysham 3.6 Peel Ports currently have a Masterplan for its Liverpool operation that includes a 70% increase in traffic from 39.64 million tonnes in 2008 to 68.58 million tonnes in 2030. This is a hugely significant addition to Irish Sea freight route capacity and the map produced in the strategic plan shows Liverpool in the pole position for serving the Irish/NI market. Heysham is not included in this map which was prepared by the owners of the Port of Heysham. http://www.peelports.co.uk/assets/masterplan/Executive_Summary.pdf 3.7 The scale of the Liverpool/Manchester ambitions is very large indeed: 3.8 The Peel Ports masterplan for Liverpool and Manchester will deliver a very large increase in port capacity for Irish/NI sea freight in an area that is extremely well connected to the national motorway network and to a regional economy embracing the whole city region of Manchester and Liverpool and far more opportunities for reducing road miles of freight than can be offered by Heysham. The harsh reality in a strong competitive commercial world is that Heysham will not be able to compete with Liverpool and the intrinsic volatility of Irish Sea freight traffic will combine with even stronger competitive pressures that will lead to the switching of traffic away from Heysham. 4 National Policy on Strategic Routes 4.1 The DfT has designated a number of routes and corridors that are of national importance including those that serve Northern Ireland and Ireland. Norman Baker (the relevant minister) was quoted in a DfT press release dated 23rd May 2011: The A1 north of Newcastle to the Scottish border has been made a route of strategic national importance following a consultation, Regional and Local Transport Minister, Norman Baker, announced today. The move sees approximately sixty-five miles of the A1 join a key list of nationally important roads. It is part of the Government’s move to ensure the economic importance of r outes from England to the capital cities of Scotland, Northern Ireland and Wales are properly recognised. A number of roads linking Bootle with Twelve Quays Ferry Terminal in Birkenhead, Merseyside, will also become a route of strategic national importance . This is because it is the main passenger and freight ferry terminal for traffic travelling between Liverpool and Belfast. Norman Baker said: "The important changes I am announcing today will ensure the economic importance of routes from England to Edinburgh, Belfast and Cardiff are properly recognised. As a result of the changes two additional routes will be recognised in future as being of national strategic importance The A1 north of Newcastle – between its junction with the A19 at Seaton Burn – to the Scottish border (providing a defined link to Edinburgh) Approximately nine miles of Local Authority controlled roads between Bootle and Twelve Quays Ferry Terminal in Birkenhead, including part of the A565 and the Kingsway Tunnel (providing connectivity with Belfast). The full route is as follows: A565 from junction with A5036 in Bootle to A5063 "Leeds Street"; then A5063 "Leeds Street" from junction with A565 to A59 "Scotland Road"; then A59 "Scotland Road" to "Kingsway Tunnel"; then "Kingsway Tu nnel" to grade separated junction with A5027; then A5027 to junction with A5139; then A5139 to A554; then A554 to Twelve Quays Terminal entrance Source: http://www.dft.gov.uk/news/press-releases/dft-press-20110523 4.2 The May 2011 ministerial announcement followed a consultation and report on the consultation in September 2010 which considered which ferry port to designate as the national strategic terminal for Belfast traffic. The report not only favoured Birkenhead but did not even include Heysham in the list of candidates. 4.3 There is no mention of Heysham and its role in serving Irish Sea traffic in ministerial announcements or documentation from the DfT dealing with routes of “strategic national importance”. It is clear that Heysham and its road links are not regarded as part of “a route of strategic national importance” This sits uneasily and illogically with the designation of the HM6L as a nationally significant infrastructure project (NSIP). 5 Is there a problem with HGV ferry traffic on the existing highway network? 5.1 It has been argued that the existence of large numbers of HGVs arriving at and departing from the Port of Heysham produce a strong argument for a bypass that would divert many of these HGV trips from the existing urban highway network onto a new road, potentially benefiting both the HGV trips and congestion on the existing road network especially at peak hours. Under these circumstances HGV journeys would, in theory, save time and fuel, and the road would underpin the operation of the Port, so adding to the economic case for a bypass. We have carried out a statistical exercise to test this position and find that the majority of HGV trips take place outside of peak hours and in relatively non-congested conditions on the urban highway system. The results of this analysis are presented in Appendix 1. 5.2 The analysis in Appendix 1 clearly shows that only 4-6 out of 18 sailings are potentially affected by peak traffic conditions on the local roads network and then only to a limited extent; and no less than 10 of the 18 sailings arrive or depart in the evening or night, when journey time savings would be minimal. We conclude that the scale of benefits attached to HGV journeys for example through time savings and reductions in fuel costs are, in fact, very low and are unlikely to provide a compelling case for a bypass. 6 Conclusions 6.1 This contribution to the evidence base for considering the case for the HM6L concludes that there is no credible argument for investing a very large amount of public money in a road scheme to connect the M6 with the port in such a fragile and volatile market. This would appear to be the view of central government which has opted for 12 Quays at Birkenhead for its favoured strategic option for serving Northern Ireland. Port related arguments for the HM6L do not stand up to analysis and evaluation and it is highly unlikely that the next 2-3 decades will see a steady rise in freight traffic through the Port of Heysham. The whole Irish Sea freight market is highly volatile and unstable and subject to changes in ownership of shipping lines, the switching of ships from one port to another, changes in the scale and sophistication of logistic offers by those ports pursing very ambitious masterplans and changes in the economy itself which have shown the Irish Sea trade to be very vulnerable to economic difficulties. 6.2 The commercial reality is that there is no case for investing in the HM6L on logic related to the future economic success of the Port of Heysham or its role in handling future levels of Irish Sea freight traffic. If this were the case then there would be an argument for a public private partnership with those profit-taking enterprises that would benefit from Heysham’s future growth actually contributing to this small piece of an infrastructure jigsaw. The commercial world that appears to support the HM6L is clearly not willing to back its rhetoric with cash and that is a telling point in the debate about the rationale for the road. 6.3 The commercial world does not back the HM6L, central government has excluded it from its designation of routes of strategic national importance and our analysis confirms that Heysham cannot produce a robust business case to support £120 million of public investment in road infrastructure. References Competition Commission (2011), Stena AB and DFDS A/S Merger Inquiry. A report on the completed acquisition by Stena AB from DFDS A/S of certain vessels and assets operated on the Irish Sea Isle of Man Government (2011) Digest of Economic and Social Statistics, Table 13.3, page 82 http://www.gov.im/lib/docs/treasury/economic/digest20111.pdf Mersey Ports Master Plan. A 20 year strategy for growth. Consultation Draft. June 2011 http://www.shipcanal.co.uk/assets/pdf/masterplan/Executive_Summary.pdf NWDA (2009) NW Ports economic trends and land use study. Final report DEPARTURE ARRIVAL 0000-0059 0100-0159 0200-0259 0300-0359 0400-0459 0500-0559 0600-0659 0700-0759 0800-0859 0900-0959 1000-1059 1100-1159 1200-1259 1300-1359 1400-1459 1500-1559 1600-1659 1700-1759 1800-1859 1900-1959 2000-2059 2100-2159 2200-2259 2300-2359 1 1 Appendix 1 HEYSHAM PORT FERRY TIMETABLES AND PEAK TRAFFIC CONDITIONS 2 1* 1** 2** 1 1 2*** 1 3 1 1 Figures are numbers of sailings arriving or departing each hour of the day (source: web sites of respective ferry operators); some variation in days of service operation, omitted for simplicity Figures in red are sailings most likely to be affected by peak hour traffic conditions on roads accessing the port (but see notes below). Isle of Man ferries are included, but have times varying by up to one hour either side of the time allocated in the Table: in no cases are Isle of Man ferry arrivals and departures anywhere near peak traffic times. Shaded times are peak traffic hours. Notes: * Seatruck arrival 0600: mostly unaccompanied trailers, so a number of vehicles are unlikely to need to depart the port before 0900. ** Seatruck departures 0830 and 0900 plus 0900 Stena service to Belfast: most vehicles likely to arrive at the port before 0730 *** Arrivals 1715 and 1730, many vehicles on 1715 arrival unlikely to leave the port much before 1800, still less likely for the 1730 arrival. The table indicates that only 4-6 out of 18 sailings in and out of the Port of Heysham are potentially affected by peak traffic conditions on the local road network, and then only to a limited extent.