Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
TITHE AN OIREACHTAIS
AN COMHCHOISTE UM IOMPAR AGUS CUMARSÁID
Tuarascáil maidir le Scéim Ghinearálta an
Bhille Cuanta (Leasú), 2014
_______________
HOUSES OF THE OIREACHTAS
JOINT COMMITTEE ON TRANSPORT AND
COMMUNICATIONS
Report on the General Scheme of the Harbours
(Amendment) Bill 2014
31TC 013
2014
Deireadh Fómhair/October,
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Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Contents
Chairman’s Foreword ....................................................................................................3
Membership of the Committee ......................................................................................5
1. Overview and key issues ...........................................................................................6
1.1 Overview ...........................................................................................................6
2. Pre-legislative Scrutiny (PLS) and General Schemes of Bills ..................................14
3. Main proposals of this General Scheme of a Bill .....................................................16
4. Legislative overview ................................................................................................17
5. Key Facts and Figures ............................................................................................21
6. Overview of the current status of Irish Ports ............................................................24
7. Policy Review ..........................................................................................................30
7.1 Regulatory Impact Analysis .........................................................................30
7.2 Report of the Review Group on State Assets and Liabilities ........................32
7.3 National Ports Policy (2013) ........................................................................34
7.4 The Competition Authority Report on Competition in the Irish Ports Sector (TCA)
.................................................................................................................37
7.5 European Union Trans European Network (TEN-T) ....................................43
8. Main provisions and stakeholder submissions .........................................................45
8.1 Transfer of shareholding .............................................................................45
8.2 Ministerial Powers .......................................................................................47
8.3 Structure and composition of port boards ....................................................49
8.3.3 Director limits ..............................................................................................50
8.4 Multi –port Companies ................................................................................51
8.5 Potential for Privatisation .............................................................................53
8.6 Dividend Policy............................................................................................54
8.7 Rosslare Europort .......................................................................................55
9. References..............................................................................................................55
Appendix 1: Preparation of legislation .........................................................................58
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Chairman’s Foreword
In early June, the Minister for Transport, Tourism and Sport, Mr. Leo Varadkar TD,
referred the General Scheme of the Harbours (Amendment) Bill 2014 to the Committee
for its views. The Committee was very conscious of the importance of the Bill for the
Ports of Regional Significance and for the Local Authorities concerned While the
overall purpose of the Bill was broadly supported by the Committee, it was decided to
invite submissions from stakeholders
Having examined the submissions received,
the Committee decided that, with a view to more fully informing the Members, selected
stakeholders would be invited to make presentations on the proposed Bill.
The Committee undertook these consultations with an overall objective of seeking to
ensure that the proposals contained in the General Scheme of the Bill were consistent
with the views of the stakeholders and of the Members. Informed by these public
hearings we have prepared this short report which also provides a contextual overview
and outlines the legislative process within which the General Scheme of the Bill sits.
However, the Committee believes that the transfer to Local Authority – led governance
structures should not be an impediment to Ports of Regional Significance developing
their facilities and growing capacity. In that regard the Committee was conscious that
the largest port in Europe, Rotterdam, which is managed by the Rotterdam Port
Authority, was owned by the municipality of Rotterdam.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
I would like to express my appreciation to my fellow Members of the Joint Committee.
The commitment of the Members to producing this Report in such a short time-frame is
very much appreciated.
John O’Mahony T.D.
Chairman
8 October 2014
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Membership of the Committee
Deputies:
John O’Mahony (FG) [Chairman]
Paudie Coffey (FG) [Vice-Chairman]
Michael Colreavy (SF)
Timmy Dooley (FF)
Dessie Ellis (SF)
Ann Ferris (LAB)
Tom Fleming (IND)
Brendan Griffin (FG)
Noel Harrington (FG)
Séan Kenny (LAB)
Eamonn Maloney (LAB)
Helen McEntee (FG)
Michael Moynihan (FF)
Patrick O’Donovan (FG)
Mick Wallace (IND)
Senators:
Terry Brennan (FG)
Sean D. Barrett (IND)
Eamonn Coghlan (FG)
Paschal Mooney (FF)
Ned O’Sullivan (FF)
John Whelan (LAB)
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
1. Overview and key issues
1.1 Overview
1.1.1
Background to the General Scheme
There are nine commercial State port companies established under the ownership of
the Minister for Transport, Tourism and Sport and subject to the Harbours Act 1996.
They are: Cork, Drogheda, Dublin, Dún Laoghaire, Galway, New Ross, Shannon
Foynes, Waterford and Wicklow. Rosslare is unique among the State commercial ports
as it is operated by Iarnród Éireann outside of the Harbours Act 1996.
These State port companies act as port authorities and handle over 85% of
commercial port tonnage in the State.
National Ports Policy (2013) divides these ports into three categories.1
Table 1: Categories of commercial ports
Ports of National
Significance (Tier 1)
Ports of National
Significance (Tier 2)
Ports of Regional
Significance
Dublin
Cork
Shannon-Foynes
Waterford
Rosslare
Dun Laoghaire
Galway
New Ross
Wicklow
Drogheda
Source: National Ports Policy (2013) p. 23
1.1.2
General Scheme – policy objectives
Of the overall policy objectives of the proposed Bill, Leo Varadkar T.D., then Minister
for Transport, Tourism and Sport, said “this is an important Bill for the ports sector,
which plays a major role in the Irish economy. The National Ports Policy encourages
each port, whether small or large, to develop its full potential to ensure that they can all
contribute to further growth in the ports sector. Transferring the five regional ports to
1
DTTAS (2013a) page 23
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
local authority management at a future date will be the best way to protect their future
and ensure good governance.” 2 Speaking in the Dáil on 15 May 2014 the then Minister
also attributed the proposed transfer of control from his Department to “the regional
nature of those bodies and their move in tourism and leisure amenity”.3
This transfer of the five regional ports can also be placed in the higher level policy
context of the Government’s plans for greater local authority involvement in various
sectors of the economy, as outlined by the Minister for the Environment, Community
and Local Government in a written answer to a Parliamentary Question on 12 March
2014:4
“Already, a significant enhancement of the local government role is being achieved
through the establishment of Local Enterprise Offices to provide the local microenterprise support service under legislation currently before the Oireachtas. The Local
Government Reform Act 2014 also provides for further significant enhancement
of the local government role in economic development at regional and local
levels and for alignment of the local and community development sector with
local government. … It is envisaged that various central government functions,
as set out in the Action Programme, will be devolved at an early date , for
example in areas such as tourism, ports, national parks, and rural
transport. Devolution will proceed on the basis of assurance that adequate funding,
staffing and any other necessary resources will be available to enable local authorities
to perform effectively any additional functions. The Action Programme also provides for
central retention of existing overall responsibility for policy, funding and accountability
where a function transfers to local government.
The initial devolution measures will form part of a more substantial long-term widening
of the role of local government, as the measures in the reform programme to
strengthen the structures, funding, governance and operational efficiency of local
government take effect, and the capacity of the system generally increases.”
2
DTTAS (2014)
Transcript available at:
http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail20140515000
10
4 Transcript available at:
http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail20140312000
71?opendocument
3
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
1.1.3
General Scheme of the Bill – stated aims
In May 2014, the Government approved and published the General Scheme of a
Harbours (Amendment) Bill 2014 (“the General Scheme”). The aim of the Bill as set out
in the General Scheme is “to provide the primary legislative framework to allow for the
later transfer of control of the five Ports of Regional Significance to local authority led
governance structures”.
In facilitating a competitive and effective market for maritime transport services, the
central aims of the General Scheme are:

to provide the legislative framework for the transfer of control of the five ports of
regional significance (Dún Laoghaire, Drogheda, Galway, Arklow and New
Ross) to Local Authority Control; and

to provide for the introduction of a higher set of standards for the appointment
and selection process on port company boards.
Central to the new approach is that the port company shareholder, whether that is the
local authority or central government, will be encouraged to take a more active
approach in the management of the ports, to ensure that the State can gain better
value for money.
The General Scheme outlines two methods for transferring control to the local
authorities.
1.
The first method allows for the transfer of shareholding from central
government to a relevant local authority (or local authorities), which would
preserve the existing structures and the commercial focus of the ports, and limit
HR issues because of the transfer would primarily involve just a change of
shareholder.
2.
The second method allows for a transfer of full control to the relevant local
authority, including all assets, liabilities, employees etc. resulting in the
dissolution without winding-up of the existing company.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
The perceived benefits of either method of transferral are that it would increase the
potential for maximising the use of shared services and reduce the administrative
burden on smaller ports.
It is also considered that the ability to raise finance through the possible sale of an
equity stake in the port companies (as provided for in the General Scheme) may
facilitate local and regional economic activity.
1.1.4
General Scheme – major themes
The policy context within which the General Scheme sits includes divergent opinions
as to the optimal structures for the port sector in general, and whether the focus should
be on privatisation, multi modal ports, and/or, as proposed in the General Scheme –
the transfer of control to local authority structures.
It may also be worth considering Ireland’s stated position to date in relation to the
forthcoming EU TEN-T Regulation; where Ireland proposed that all existing ports in the
Greater Dublin Area (GDA) (Dublin, Dún Laoghaire and Drogheda) be included within
the Dublin ‘core’ port.5 This position raises questions about the future of the ports in the
GDA, which would be altered by the proposed transfer of control of the ports of
regional significance to local authority led structures. The General Scheme does not,
for example, provide an explanation as to how different ports, led by different local
authorities would function as part of one Dublin ‘core’ port. It is not clear from a review
of secondary sources how the development of a Dublin ‘core’ port on the basis
mentioned above would be consistent with the position of the Competition Authority,
which notes that any further mergers of ports within or close to the Greater Dublin Area
could limit the scope for inter-port competition.
1.1.5
Approach taken by the Committee
As part of the pre-legislative scrutiny (PLS) process, the Joint Oireachtas Committee
on Transport and Communications (hereafter referred to as ‘the Committee’) was
requested to review and consider the General Scheme and Heads of Harbours
(Amendment) Bill 2014. The Committee received a number of submissions from
5
Department of Transport, Tourism and Sport (DTTAS, 2013c)
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Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
stakeholders including the Irish Exporters Association (IEA); Irish Congress of Trade
Unions (ICTU); Association of Maritime Pilots Ireland (AMPI); Chartered Institute of
Logistics and Transport (CILT); Dún Laoghaire - Rathdown County Council; Galway
City Council; Wexford County Council; Dún Laoghaire Harbour Company; Drogheda
Port Company; and Galway Harbour Company with a view to scrutinising the
provisions of the General Scheme.
This report, accordingly, attempts to identify a range of possible key issues relating to
the above General Scheme which have been brought to the attention of the Joint
Committee or have otherwise been identified as being potentially relevant. In
particular, the report attempts to analyse and set in context (through secondary
research) some of the concerns expressed by stakeholders in their submissions to the
Joint Committee.
Section 2 of this report provides a general overview of pre-legislative scrutiny (PLS)
and general schemes of bills. Included is a summary of the process followed in Ireland
in respect of PLS.
Section 3 provides an overview of the five main parts of the general scheme of a
Harbours (Amendment) Bill 2014. Section 4 provides a historical overview of the
legislation relating to Irish ports and details the major legislative changes since the
Harbours Act 1946 and their significance. Section 5 outlines some of the most
important facts and figures in relation to tonnage handled and vessel arrivals at each of
the ports. Section 6 provides a brief statistical summary of each of the 10 major Irish
ports over the past 4 years 2010 – 2013.
Section 7 provides a description and analysis of the main policy documents relating to
this General Scheme.
Section 8 examines the main provisions of the general scheme together with an indepth analysis of the stakeholder submissions pertaining to each of those main
provisions.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
1.2 Key issues are now listed in the order in which they occur in the body of the
report.6
It should be noted that some of the key issues refer to specific Heads within the
General Scheme. Other key issues may refer to the general policy context within which
the General Scheme sits.
Key issues identified
Key issue 1 (Section 8.1 of this report refers)
On the basis of the Regulatory Impact Assessment (RIA) to the Draft Heads of
the Bill, and in the interest of improving transparency, the possibility of clearly
outlining which individual ports will fall under a particular transfer process could,
perhaps, merit greater consideration. For example, the Bill could highlight which
Head of the Bill, 7 or 12, will apply to each of the five named Ports of Regional
Significance, enabling those port companies to have clearer direction as to their
future ownership and governance structures.
Key Issue 2 (Section 8.2 of this report refers)
A statutory obligation on the Minister of Transport, Tourism and Sport to consult
with the relevant local authority in advance of making an order under Heads 11
and 12 of the Bill could be considered.
Key Issue 3 (Section 8.2 of this report refers)
It may be beneficial if statutory guidance was provided to the new port company.
It could perhaps, for example, give greater clarity and direction to the Local
Authority, were there in place appropriate legislative guidance on corporate
governance of the port companies in advance of the proposed transfer of
control.
Key Issue 4 (Section 8.2 of this report refers)
Consideration could be given to stipulations that would ensure the financial
consequences of any proposed direction from the Minister would be taken into
account.
This could offset the current potential imbalance whereby a Minister may make a
direction to a port company without having to provide any funding in respect of
any financial costs of that direction.
6
The key issues are grouped in accordance with the section of the report that discussed them.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Key issue 5 (Section 8.3 of this report refers)
The prohibition in respect of appointment of port users to port boards would
appear to have a clear basis in regional ports where there exists the possibility
of there being only a very small number of port users.
However, the Irish Exporters Association (IEA) considers that this prohibition (in
the context of larger (tier 1/2) ports) may be too prescriptive and may limit
flexibility by failing to recognise that there may be a larger pool of eligible
talented/experienced individuals available amongst these port users.
Key Issue 6 (Section 8.3 of this report refers)
Consideration could be given to the provisions in Head 19 of the Bill limiting
Director terms in years rather than in terms.
Because of the commitment in the National Ports Policy to stagger board
appointments, situations could arise whereby a Director is limited to 6 years in
office, which could perhaps, be considered overly restrictive.
Key Issue 7 (Section 8.4 of this report refers)
In light of the continued decline of port traffic and throughput for smaller ports
(globally and in Ireland) together with recommendations in the Report by the
Review Group on State Assets and Liabilities (McCarthy Report) concerning the
restructuring of state-owned ports into several competing multi-port companies,
and the Irish position in relation to the proposed European Commission’s revised
TEN-T Regulation, that all existing ports in the Greater Dublin Area (Dublin, Dún
Laoghaire and Drogheda) be included within the Dublin ‘core’ port; greater
consideration could, perhaps, be given to the impact that any proposed transfer
of control to differing county council structures would have on any future
amalgamation of ports.
Key Issue 8 (Section 8.4 of this report refers)
Greater clarification on the policy position being taken with regard to the future
status of European Commission-defined ‘core’ and ‘comprehensive’ port status,
could, perhaps, be of benefit for the future planning of Irish ports.
This is especially relevant to the ports in the Greater Dublin Area (GDA).
Such clarification with regard to policy direction may also be relevant in the
context of the proposals within this General Scheme to transfer two ports in the
GDA to local authority control.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Key Issue 9 (Section 8.5 of this report refers)
Although Head 8 allows flexibility to new shareholders in considering future
methods of infrastructure funding, including, for example, through the sale
of an equity stake, consideration could, perhaps, also be given to whether
or not there is any potential for privatisation of some of the ports of
regional significance.
As the ports sector does not receive any exchequer funding, the
development of the ports sector is more dependent on private sector
investment. Privatisation has been suggested in the Report by the Review
Group on State Assets and Liabilities (McCarthy Report).
Key issues 7 and 8 above are closely related.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
2. Pre-legislative Scrutiny (PLS) and General Schemes of Bills
It is important to draw the distinction between the General Scheme of a Bill and the Bill
as it will be presented at first stage in the parliamentary legislative process (which is
known as “initiation”, i.e. publication). Most Government departments have their
legislation drafted by the Office of the Parliamentary Counsel (OPC)7 by supplying
Heads of a Bill which broadly set out policy objectives. Typically, a General Scheme
can be considered to be in draft format and as such is still subject to the legal advice of
the Office of the Attorney General. It may include an explanatory note to accompany
each Head unless the Heads are self-explanatory (see Appendix 1 for further details
on the preparation of legislation).
It is important to note that the General Scheme has no legal effect and the proposals it
contains may well evolve over time as the legislative process progresses. Draft
legislation will be prepared on the basis of these proposals, for presentation to the
Houses of the Oireachtas and, ultimately, enactment (if approved).
The publication of the General Scheme presents an important opportunity for
interested stakeholders to comment on the general principles and themes at an early
stage in the Bill’s development. In this case, the Joint Committee requested secondary
research from the Oireachtas Library & Research Service (L&RS) in order to assist
them in carrying out pre-legislative scrutiny (PLS) of the General Scheme.
The process which has been followed in Ireland, to date, in respect of pre-legislative
scrutiny (PLS) can be summarised as being composed of the following steps:
o
The relevant Minister may write to the Joint Committee requesting that it
undertake PLS of the General Scheme;
o
The Committee will then decide whether or not to carry out PLS;
o
The Committee will decide how PLS will be carried out - whether submissions
will be sought; whether public hearings will be held etc;
7
The Office of Parliamentary Counsel to the Government is one of three offices that make up the Office of
the Attorney General. The OPC comprises the Parliamentary Counsel who draft legislation and have
responsibilities in the area of statute law revision.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
o
The Committee will publish a PLS report or otherwise convey the result of their
scrutiny to the Minister;
o
If there has been a pre-legislative stage, the Chairman, Vice Chairman or a
member of the relevant committee will have a right equal to that of the
Minister and the Opposition spokespersons to speak in the Dáil (at
second stage) to outline the committee's work.8
An essential component of the work of Oireachtas Committees is the opportunity their
hearings, and/or a review of written submissions made to them, give to stakeholders to
provide Members with the benefit of their experience and to bring what they believe to
be the most pertinent issues to the attention of Members – in this case in order to
assist in pre-legislative scrutiny.9
8
The Government Chief Whip speaking in a Dáil debate on 11 March 2014:
http://www.kildarestreet.com/debates/?id=2014-03-11a.171
9 Public Affairs Ireland, Issue 85 of June 2012 (Ó Cléirigh, Niall), Supporting the Oireachtas Committees:
The role of the Oireachtas Library & Research Service available online at
http://www.publicaffairsireland.com/journal/archive/92-issue-85-june-2012/articles/1234-supporting-theoireachtas-committees-the-role-of-the-oireachtas-library-research-service
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
3. Main proposals of this General Scheme of a Bill
The following summarises the main proposals set out in this General Scheme:
Part I (Heads 1-6) sets out the definitions to be used in the proposed legislation; to
whom the expenses will be incurred by in the administration of this Act; legislation to
be repealed by this Act; and a list of port companies to which Heads 7 and 12 may
apply.
Part II (Heads 7-11) - Head 7 provides for the transfer of shareholding of the ports of
regional significance from central to local government. Head 10 outlines the applicable
provisions with respect to staff of a company transferred under this Head; and Head 11
provides general ministerial powers applicable under the Head 7 transfer process.
Part III (Heads 12-16) - Head 12 provides for an alternative transfer mechanism to that
provided for by Head 7. Head 12 envisages the dissolution of the company structure
and complete integration of the management and operation of the harbour within local
authority structures. Head 13 outlines the applicable provisions with respect to staff of
a company transferred under this Head; and Head 14 outlines the provisions for the
transfer of property, rights and liabilities of the port company to the local authority.
Part IV (Heads 17-18) allows for the possible future transfer of control of Bantry Bay
Harbour (Head 17) and Dundalk Harbour (Head 18) to local authority control should
that be considered appropriate in the future.
Part V (Heads 19-25) - Head 19 sets out a list of requirements for port company
boards including: a statutory requirement for chairpersons designate to appear before
relevant Oireachtas Committees; appointment of persons with relevant expertise and
experience to port company boards; term limits; and an equitable balance between
men and women on port company boards.
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
4. Legislative overview
4.1
Harbours Act 1946
Under the Harbours Act 1946, Ireland’s 26 State owned ports operated as
harbour authorities and were essentially run as public utilities by harbour
commissioners, many of whom were nominated by local authorities, chambers of
commerce and others representative of port user interests.10
4.2
Harbours Act, 1996
Recognising that the ports were constrained in their ability to respond
commercially under existing structures, the Harbours Act 1996 facilitated the
establishment of commercial State port companies. The new structure allowed
ports the freedom they required to act commercially and to provide cost effective
and efficient services to meet the needs of their customers, the State and the
national economy. The First Schedule to the 1996 Act provided for 12 larger
harbours to be set up as commercial State companies and to operate with
greater autonomy (Table 2).
Table 2: Commercial State Harbours established under the 1996 Act
Port
Company
Arklow Harbour
Arklow Harbour Company
Cork Harbour
Port of Cork Company
Drogheda Harbour
Drogheda Port Company
Dublin Harbour
Dublin Port Company
Dundalk Harbour
Dundalk Port Company
Dún Laoghaire Harbour
Dún Laoghaire Harbour Company
Foynes Harbour
Foynes Port Company
Galway Harbour
Galway Harbour Company
New Ross Harbour
New Ross Port Company
Shannon Harbour
Shannon Estuary Ports Company
Waterford Harbour
Wicklow Harbour
Port of Waterford Company
Wicklow Port Company
Source: First Schedule to 1996 Act
10
The Competition Authority (2012) Footnote 43
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Section 87 of the Harbours Act 1996 provides for the transfer of control of a
number of smaller harbour authorities to the control of local authorities. These
harbours operated under the Harbours Act 1946 but were not considered large
enough to form commercial State companies. There were a total of thirteen such
harbour authorities (listed in Table 3) within section 87 of the Harbours Act 1996
(Arklow was inserted by virtue of the Harbours (Amendment) Act 200911).
Table 3: Transfer of Harbour Authorities
Year of Transfer
Harbour Authority
Local Authority
2006
Annagassan Pier Commissioners
Louth County Council
2011
Arklow Harbour Commissioners8
Wicklow County Council12
-
Bantry Bay Harbour Commissioners13
Port of Cork Company
1999
Ballyshannon Harbour Commissioners
Donegal County Council
2011
Baltimore and Skibbereen Harbour Commissioners
Cork County Council
1999
Buncrana Harbour Commissioners
Donegal County Council
2009
The Council of the urban district of Kilrush
Kilrush Town Council
2011
Kinsale Harbour Commissioners
Cork County Council
2008
River Moy Commissioners
Mayo County Council
2006
Sligo Harbour Commissioners
Sligo County Council
2011
Tralee and Fenit Pier and Harbour Commissioners
Kerry County Council
2009
Westport Port and Harbour Commissioners
Mayo County Council
2010
Wexford Harbour Commissioners
Wexford County Council
2009
The Council of the Urban District of Youghal
Youghal Town Council
Source: DTTAS
Thirteen of these fourteen harbour authorities have now transferred to the control
of a local authority, the exception being Bantry Bay Harbour Commissioners,
which, as of 1st January 2014, transferred to the Port of Cork Company. A full list
11
The 1996 Act provided for the establishment of a Company in respect of Arklow Harbour. Section 17 of
the 2009 Act amended the 1996 Act to facilitate the reversion of Arklow Harbour from being a port
company governed by the Companies Acts 1963-2009 to local authority control.
12 See: http://www.irishstatutebook.ie/2011/en/si/0664.html
13 Provision was made in the Harbours (Amendment) Act 2009 for the transfer of Bantry Bay Harbour to
the Port of Cork Company. Accordingly, responsibility for the management and control of Bantry Bay
Harbour was transferred to the Port of Cork Company with effect from 1 st January 2014.
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of the statutory instruments ordering the transfer of control for each harbour is
available here.14
The transfer process used in respect of these smaller harbours was a relatively
straightforward transfer of all property, rights, liabilities and staff of the harbour
authority to the local authority (or port company in the case of Bantry Bay), the
dissolution of the harbour authority as a legal body and the repeal of the
previously applicable Harbours Act 1946 in respect of the harbour.15
Box 1: Rosslare
Rosslare is not one of the State commercial port companies established pursuant to the
terms of the Harbours Act, 1996. Both Rosslare Harbour and Fishguard Harbour in
Wales are technically part of property owned by the Fishguard and Rosslare Railways
and Harbours Company, an Anglo-Irish company established under the 1898 Fishguard
and Rosslare Railways and Harbours Act. Iarnród Éireann manages the Rosslare
operation and Stena Line Ports Ltd. manages the Fishguard operation. They have a
commercial agreement between them in relation to investments, revenues and profits.
Any change in ownership status of the port requires amendment of this legislation and
supporting amending legislation in the UK. 16
4.3
Harbours (Amendment) Act, 2000
The Harbours (Amendment) Act 2000 amended the Harbours Act 1996 and
provided for the amalgamation of existing port companies in the interests of cost
effectiveness and efficiency.
Following the enactment of the Harbours (Amendment) Act 2000, Foynes Port
Company and Shannon Estuary Ports Company were amalgamated to form the
Shannon Foynes Port Company in September 2000.
14See:http://www.dttas.ie/sites/default/files/maritime/HARBOURS%20TRANSFERRED%20TO%20LOCAL
%20AUTHORITY%20OWNERSHIP-0.pdf
15Ibid.
16 Julie O’Neill, Secretary General, Department of Transport (2010)
19
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Box 2: The Ports Policy statement of 2005 noted that the continued
operation of many of the regional harbours under the outdated provisions of
the Harbours Act 1946 was unsustainable on the grounds of good
governance.
It was considered that most of these harbours would best achieve their
potential through their transfer to local authority ownership or, where this was
not possible, through sale to the private sector. 17
4.4
Harbours (Amendment) Act 2009
The Harbours (Amendment) Act 2009 expanded upon the commercial mandate
given to the commercial ports under the 1996 Act and removed local authority
and port user representation at Board level. The main features of the 2009 Act
included:






17
extending the scope of activities to be undertaken by port companies
allowing them to invest or engage in commercial activities outside the
limits of their respective harbours, subject to obtaining Ministerial consent;
removing local authority representation and user representation on the
boards of port companies;
the introduction of measures to reduce the size of board companies;
extending the range of persons who may be issued with a pilotage
exemption certificate;
facilitating the transfer of Arklow Harbour to local authority control; and
provision for the transfer of Bantry Bay Harbour to Port of Cork Company
and Tralee and Fenit Harbours to Shannon Foynes Port Company.
DTTAS (2005)
20
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
5. Key Facts and Figures
In 2013, 11,940 vessels carrying 46.7 million tonnes called at 21 Irish ports.
Dublin Port facilitated 6,651 of these vessels handling 19 million tonnes while
Kilrush, a port under the control of Kilrush Town Council, facilitated 1 commercial
vessel call and handled approximately 2,000 tonnes.
Table 4: Goods Handled and Arrivals by Port (2013)
Port
Arklow
Bantry Bay
All Goods Handled
('000 Tonnes)
Arrivals
13
9
1469
11
Castletownbere
33
15
Dundalk
97
34
4
208
Dun Laoghaire
Drogheda
1044
314
Dublin
19865
6651
Shannon Foynes
10290
706
Greenore
383
93
Galway
521
144
68
64
9
4
Killybegs
Kinsale
Kilrush
2
1
343
122
Cork
8983
1280
Rosslare
1940
1683
34
16
New Ross
Sligo
Tralee Fenit
26
17
1348
425
Wicklow
142
70
Youghal
108
73
46722
11940
Waterford
All Irish Ports
Source: CSO
21
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Figure 1: All Goods Handled in 2013 (‘000 Tonnes)
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Source: CSO
2013 saw an increase in the number of vessels arriving at Irish ports for the first
time in 5 years. The total number of vessels arriving at Irish ports in 2013 was
11,940 compared to 11,810 in 2012. The increase in the number of vessels was
not reflected in the tonnage of goods handled where there was a slight dip from
47,649 tonnes in 2012 to 46,722 tonnes in 2013.
Ireland is heavily dependent on ports for trade. The Competition Authority
estimates that sea-borne freight accounts for 84% of Ireland’s trade in volume
and 62% in value terms.18
18
The Competition Authority (2013)
22
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Box 3: Port cargo definitions
Liquid bulk: Examples of liquid bulk include crude oil, liquefied natural gas and liquid
chemicals.
Dry and break bulk: Examples of dry bulk include coal, ores, grains, fertiliser and animal feed.
Break bulk specifically refers to loose material that must be loaded in bales, bags, barrels or
boxes.
Lift-on/Lift-off (Lo-Lo): Lo-Lo is containerised cargo that must be loaded on and off ships
using cranes. Lo-Lo is used for short-haul and long-haul container transportation via
transhipment hubs
Roll-on/Roll-off (Ro-Ro): Ro-Ro refers to wheeled freight traffic that is driven on or off a ship.
Source: TCA (2013)
Figure 2: Bulk Traffic by Category 2007-2013 (‘000 tonnes)
18000
16000
14000
12000
Liquid bulk
10000
Dry bulk
Break bulk and all other goods
8000
Roll-on/roll-off traffic
Lift-on/lift-off traffic
6000
4000
2000
0
2007
2008
2009
2010
2011
2012
2013
Source: CSO
23
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
6. Overview of the current status of Irish Ports
6.1
Ports of National Significance (Tier 1)
6.1.1
Dublin Port Company
Dublin Port Company is the largest multi-modal port on the island of Ireland and
caters for Lift-on/Lift-off (Lo-Lo), Roll-on/Roll-off (Ro-Ro), liquid bulk, dry bulk,
cruise liners and break bulk traffic. Dublin Port handles 70% of all Lo-Lo traffic;
85% of all Ro-Ro traffic; and 43% of all Seaborne trade in the State.
2013 saw a return to growth for Dublin Port after a number of years where growth
and trade had remained static. Turnover increased from the previous year’s
€65.3m to €68.4m and profit increased by 13.9% from €22.8m to €26m.
The continued commercial development of Dublin Port Company is a key
strategic objective of the National Ports Policy.19
Table 5: Dublin Port Company overview
Dublin Port Company
Year
Total Tonnage of
Goods Handled ('000
tonnes)
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
2013
19,865
6,651
€68,375
€26,000
140
2012
19,898
6,624
€65,318
€22,823
145
19,467
6,767
€69,111
€27,911
145
19,548
7,434
€66,969
€20,534
152
2011
2010
6.1.2
Port of Cork Company
The Port of Cork Company is the only port other than Dublin, capable of handling
traffic across all five principal traffic models, namely, Lo-Lo, Ro-Ro, Break Bulk,
Dry Bulk and Liquid Bulk.
The Port of Cork Company handles 19% of all seaborne trade in the State.
19
DTTAS (2013a) page 25
24
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
2013 saw an increase in turnover on the previous year for the Port of Cork
Company from €21.8m to €23.3m and an increase in net profit from €1.4m to
€1.7m.
The continued commercial development of the Port of Cork Company is a key
strategic objective of the National Ports Policy.20
Table 6: Port of Cork Company overview
Port of Cork Company
Year
Total Tonnage of
Goods Handled ('000
tonnes)
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
2013
8,983
1,280
€23,268
€1,680
109
2012
8,708
1,252
€21,829
€1,357
105
2011
8,434
1,274
€21,409
€1,197
107
2010
8,466
1,448
€21,997
€2,114
107
6.1.3
Shannon Foynes Port Company
Shannon Foynes Port Company is the largest bulk port in the country and
handles approximately 20% of all seaborne trade in the State.
In line with the other ports of National Significance (Tier 1), Shannon Foynes Port
Company saw an increase in turnover in 2013, up from €10.1m in 2012 to
€11.9m in 2013.
The continued commercial development of Shannon Foynes Port Company is a
key strategic objective of the National Ports Policy.21
Table 7: Shannon Foynes Port Company overview
Shannon Foynes
20
21
DTTAS (2013a) page 26
Ibid.
25
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Year
Total Tonnage of
Goods Handled ('000
tonnes)
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
2013
10,290
706
€11,854
€2,825
40
2012
10,094
734
€10,125
€2,025
40
2011
9,899
680
€10,147
€2,728
42
9,134
694
€9,928
€1,103
44
2010
6.2
Ports of National Significance (Tier 2)
6.2.1
Port of Waterford
The Port of Waterford is the fifth largest port in the country in terms of tonnage
handled, and offers both Lo-Lo and bulk services. It is one of only three ports in
the country offering Lo-Lo services and handles approximately 8% of all Lo-Lo
traffic.
The Port of Waterford has seen a significant decline in trade over the past
decade, although from 2012 to 2013, there has been a slight increase in the total
tonnage of goods handled in line with the national economic recovery.
Table 8: Port of Waterford Company overview
Waterford
Year
Total Tonnage of
Goods Handled ('000
tonnes)
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
2013
1,348
425
€5,999
€1,549
27
2012
1,174
370
€5,414
-€1,473
28
2011
1,383
426
€6,463
-€440
35
2010
1,451
455
€6,966
-€574
38
6.2.2
Rosslare Europort
Rosslare is unique among the State commercial ports as it operates outside of
the Harbours Acts 1996-2009.
Iarnród Éireann operates Rosslare Europort under a complex ownership
arrangement involving Fishguard Port that dates back to the 19th Century.
26
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Rosslare Europort handles approximately 34% of all passenger cars,
motorcycles and accompanying trailers/caravans coming through the State in
2013 and approximately 16% of all Ro-Ro traffic.22 It is the State’s fourth largest
freight port and the second largest passenger port.
Table 9: Rosslare Europort overview
Rosslare Europort
Year
Total Tonnage of
Goods Handled ('000
tonnes)
Vessel Calls
Turnover
('000)
Net Profit
('000)
Year
2013
1,940
1,683
n/a
n/a
2013
2012
1,864
1,712
n/a
n/a
2012
2011
2,192
1,791
n/a
n/a
2011
2010
2,502
1,448
n/a
n/a
2010
6.3
Ports of Regional Significance
6.3.1
Dún Laoghaire
In terms of overall freight handled in 2013, Dún Laoghaire is the smallest State
commercial port company. However, it is the third largest passenger ferry port in
the country behind only Dublin and Rosslare.
In recent years the harbour has moved away from commercial port-related
business and is increasingly viewed as a centre for marine-related tourism and
recreational activities.
Financially, Dún Laoghaire has had a number of difficult years since 2011 but in
2013, net loss was reduced from -1.9m to -0.9m.
22
CSO. Figures available at www.cso.ie
27
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Table 10: Dún Laoghaire Harbour Company overview
Dún Laoghaire Harbour Company
Total Tonnage of
Year
Goods Handled
Vessel Calls
('000 tonnes)
2013
4
1
12
2
2012
2011
2010
6.3.2
208
172
182
389
Turnover
('000)
Net Profit
('000)
Employees
€3,981
€4,700
€6,835
€10,676
-€890
-€1,872
-€829
€302
20
23
28
40
Drogheda
Drogheda Port Company principally handles bulk traffic and like many of the
state ports, saw an increase in the total tonnage of goods handled in 2013 at
1.4m tonnes, up from 0.96m tonnes in 2012.
Mr. Paul Fleming, Chief Executive of Drogheda Port Company noted in the 2013
Annual Report that “Our main objective continues to be the development of the
port into a thriving, diverse and world class port facility with excellent
infrastructure and facilities that not only continue to create jobs for the local
community but plays a key active role in supporting the national trading
economy”.23
Table 11: Drogheda Port Company overview
Drogheda Port Company
Total Tonnage of
Year
Goods Handled
('000 tonnes)
2013
1,044
2012
959
2011
489
2010
499
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
314
274
184
209
€2,508
€2,286
€1,799
€1,998
€507
€265
€521
€161
10
10
10
13
23
Drogheda Port Company, Financial Statements, 2013. Available at
http://opac.oireachtas.ie/AWData/Library3/TTSdoclaid240714b_130045.pdf
28
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
6.3.3
Galway
Galway Harbour Company is a bulk port which caters primarily for liquid-bulk
products, and the harbour is an important strategic regional hub for petroleum
importation, storage and distribution.
The Company's profit before taxation for 2013 amounted to €755,274, compared
to a loss before taxation of €80,234 in 2012. This was mainly due to a substantial
reduction in costs of €602,905 (18%) which was achieved in 2013. The company
derives over 50% of its revenue from non-core port activities such as marine
leisure and tourism.
Table 12: Galway Harbour Company overview
Galway Harbour Company
Total Tonnage of
Year
Goods Handled
('000 tonnes)
2013
521
2012
501
2011
554
2010
671
6.3.4
Vessel Calls
Turnover
('000)
Net Profit
('000)
Year
144
142
158
187
€3,579
€3,275
€3,537
€3,841
€456
-€130
€1,472
€312
2013
2012
2011
2010
New Ross
New Ross Port Company is a bulk port that principally handles dry bulk products.
Since 2011, it has seen a sharp increase in net losses and 2013 saw a net loss
of €0.3m. However, it retains important regional and economic functions and
National Ports Policy aims to maintain port facilities as an asset for the region.24
Table 13: New Ross Port Company overview
New Ross Port Company
Total Tonnage of
Year
Goods Handled
('000 tonnes)
2013
343
2012
268
2011
357
2010
444
24
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
122
102
131
174
€616
€572
€784
€911
-€333
-€199
-€42
-€45
5
5
5
5
DTTAS (2013a)
29
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
6.3.5
Wicklow
Wicklow Port Company only handles bulk traffic. 2013 saw a return to profitability
with net profits totalling €33,000, increased from a loss of €97,000 in 2012.
The port has 3 employees and its role is currently one of local and regional
importance only.
Table 14: Wicklow Port Company overview
Wicklow Port Company
Total Tonnage of
Year
Goods Handled
('000 tonnes)
2013
2012
2011
2010
6.4
142
74
99
89
Vessel Calls
Turnover
('000)
Net Profit
('000)
Employees
70
42
56
53
€311
€190
€222
€217
€33
-€97
-€26
-€266
3
3
3
3
Other Ports
Bantry Bay operates as a harbour authority under the aegis of the Department of
Transport, Tourism and Sport, while the local authorities operate Kinsale, Sligo, Fenit
and Youghal. There are two fisheries centres (Killybegs and Castletownbere) where
commercial freight traffic is incidental to their primary purposes. There is one privately
owned commercial port in Greenore operated by One51, though this is owned in
conjunction with the Dublin Port Company (DPC).
7. Policy Review
7.1
Regulatory Impact Analysis
A Regulatory Impact Analysis (RIA) was published at consultation phase in
August 2013 and a second RIA, at the stage of the draft heads of a bill, was
published in December 2013.
30
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
The August RIA was primarily intended to aid consultation and inform
discussions in relation to the proposed transfer of the Ports of Regional
Significance; however, general observations on other potential issues for
consideration were also welcome.25
The December RIA is a result of the consultation process on the August RIA.
In section 2 – Identification and description of options - the four options outlined
in the August RIA26 are taken as read in the December RIA and two legislative
measures that facilitate all four options are proposed. The two legislative
measures are:
i.
A transfer of shareholding from central government to a relevant local
authority (or local authorities)
ii.
A transfer of full control to the relevant local authority, including all
assets, liabilities, employees etc. resulting in the dissolution without
winding-up of the existing company
The December RIA introduces the requirement of the attendance of the
Chairperson designate of the commercial state port company before the relevant
Oireachtas Committee together with a string of requirements regarding board
membership. These include equitable gender balance, a range of skillsets that
must be adhered to, and limitations on the number of consecutive terms that can
be served on a board.
The December RIA also introduces a proposal to repeal the Harbours Act 1946.
Section 3 of both RIAs is limited to an analysis of the costs, benefits and impacts
of the introduction of the changes proposed.
25
DTTAS (2013b) page 8
The four options are as follows:
a) The creation of separate legal entities (with or without share capital) under the
control of local government;
b) The continuation of existing legal entities with share capital owned by local
rather than central government;
c) The operation of a port as an administrative unit of local government;
d) The potential for private investment.
26
31
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
The December RIA notes that “The Bill, together with other non-legislative
measures proposed in the National Ports Policy generally, will have a positive
impact upon Ireland’s national competitiveness.” The RIA continues, “The
proposed transfer of control to local authority led governance structures is
designed to ensure that the maximum potential of each such port is best
designed.”
Finally, under section 5, Enforcement and Compliance, the Department
considers that the proposed legislative provisions will not give rise to any
significant enforcement and compliance issues.
Table 15: List of submissions received in response to the August 2013 RIA.
Irish Ports Association
Drogheda Port Company
Irish Exporters Association
Dún Laoghaire Harbour Company
ICTU
Galway Harbour Company
Association of Maritime Pilots of
Ireland
Shannon Foynes Port Company
Commissioner of Irish Lights
Dublin Port Company
IMPACT
Wicklow County Council
Dún Laoghaire Rathdown County
Council
Chartered Institute of Logistics and
Transport
Port of Waterford Company
Source: DTTAS
7.2
Report of the Review Group on State Assets and Liabilities
In July 2010, the Review Group on State Assets and Liabilities was established
by the Minister for Finance, Brian Lenihan T.D., to advise on how commercial
state assets can be better deployed or disposed of to support economic
recovery.
The Minister appointed Mr. Colm McCarthy, Professor of Economics in UCD, as
Chairman of the Group and tasked the Group with drafting a report considering
32
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
inter alia the potential for asset disposals in the public sector. The Group
published their report in April 2011. The report is commonly referred to as “The
McCarthy Report”.
Section 9 of the Report deals with seaports and port industry structure. The
Review group considered that the current structure of the port sector is suboptimal and that the general financial performance and average return on capital
delivered during the years of unprecedented economic growth to have been
disappointing and that the cash dividends from the commercial state bodies
generally, were “low and reliability is patchy”. 27
The Review Group considers that there are too many ports for the trade available
and that the corporate structures in place, including separate boards,
management, auditors and investment plans, are difficult to justify for companies
which in some cases have annual turnovers of €1 million or less.
The report further notes that any one of the port companies could, in principle at
least, be disposed of and that port companies all over the world operate
successfully as private entities.
The chapter on seaports and port industry structure concludes by making two
recommendations:
27
i.
The Review Group recommends that the state-owned ports, including
Rosslare, should be restructured into several competing multi-port
companies, built around Dublin, Cork and Shannon Foynes. The
Competition Authority should be consulted concerning the
amalgamation process.
ii.
The Review Group recommends that privatisation of some or all of the
ports should be considered, ideally after the recommended
restructuring. The adequacy of competition in the sector on an allIreland basis should be reviewed prior to privatisation and suitable
regulatory arrangements instituted if deemed necessary.
Review Group on State Assets and Liabilities (2011) Chapter 9, page 61
33
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
7.3
National Ports Policy (2013)
7.3.1
Background
In March 2013, the Department of Transport, Tourism and Sport published a new
National Ports Policy to replace the 2005 Ports Policy statement.
The document is the result of an extensive public consultation process and
provides a broad range of reforms necessary to address the challenges facing
the State’s ports. Minister Varadkar noted that:
“…the Government has set a target for increasing the contribution of the marine
sector to the national economy. The National Ports Policy is a contribution to that
vision and effort. It clearly sets out a roadmap for the ports sector for at least the
next generation, setting down clear objectives, the policies to achieve them and
timelines for doing so.” 28
The core objective of National Ports Policy (2013) is to facilitate a competitive
and effective market for maritime transport services. 29 Long term international
trends in the ports sector are towards consolidation in shipping and port
infrastructure to maximise efficiencies. As such, Irish ports policy aims to focus
on the development of the State’s largest commercial ports and to introduce
legislation to allow for the transfer of the smaller State commercial port
companies to relevant local authority control.
7.3.2
Organisational and Ownership Structure
The National Ports Policy reflects the global trends affecting the ports industry,
namely that port traffic is increasingly gravitating to larger ports to avail of
capacity and economies of scale. National Ports Policy introduces categorisation
of the ports sector into three distinctive categories (See Box 4). 30
Minister’s Statement, DTTAS (2013a)
DTTAS (2013a) page 23
30 Ibid., page 27
28
29
34
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Box 4: Categories of ports
Ports of National Significance (Tier 1)
National Ports Policy has identified three ports of national significance (Tier 1) using
broadly similar criteria that the European Commission has used in identifying its ports in
its core network under the TEN-T. These ports: are responsible for 15% to 20% of overall
tonnage through Irish ports; and have clear potential to lead the development of future
port capacity in the medium and long term, when and as required.
The three ports of national significance (Tier 1) are: Dublin Port Company, Port of Cork
Company and Shannon Foynes Port Company.
Ports of National Significance (Tier 2)
National Ports Policy has identified three ports of national significance (Tier 2) using
broadly similar criteria that the European Commission has used in identifying its ports in
its comprehensive network under the TEN-T. These ports: are responsible for at least
2.5% of overall tonnage through Irish ports; have clear demonstrable potential to handle
higher volumes of unitised traffic, and have the existing transport links to serve a wider,
national marketplace beyond their immediate region.The two ports of national
significance (Tier 2) are: Port of Waterford Company and Rosslare Europort.
Ports of Regional Significance
While commercial shipping in Ireland is centred on the five ports of National Significance,
14 other ports handle commercial traffic and function as important facilitators of trade for
their regional and local hinterland.31
Of these 14 ports, five are smaller state-owned commercial port companies: Drogheda,
Dún Laoghaire, Galway, New Ross and Wicklow. The five ports categorised as Ports of
Regional Significance, Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow, have
all seen a decline in tonnage handled between 1998 and 2013 such that the volume of
traffic handled by these five port companies collectively is just 3% of the total.
Of the five ports of regional significance, National Ports Policy (2013) states that,
“It is clear that, notwithstanding their continuing importance as regional ports,
they are not facilities of national significance that would justify their control and
oversight by the Department of Transport, Tourism and Sport.”32
7.3.3
31
32
Corporate Governance
Ibid., page 29
Ibid., page 30
35
Deireadh Fómhair | October 2014
Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
National Ports Policy notes the fact that state-owned port companies are
valuable assets that have important economic, social and environmental
functions.33 And that “It is incumbent on those entrusted with the management of
these assets that the ports fulfil the expectations of the shareholder, the public
interest and the economy at large.”34
National Ports Policy proposes that there should be an appropriate balance of
skills present on each board and that each board should contain members with
appropriate accounting, legal, commercial, and maritime/logistics training or
experience.
There is also an increased focus on improving transparency in the State board
appointment process including the caveat that all new and re-appointed
chairpersons shall be required to appear before relevant Oireachtas Committees
before their appointment takes effect. 35
In relation to dividends, NPP noted the observations of the Report of the Review
Group on State assets and liabilities, which observed that the general financial
performance of the ports had been disappointing since corporatisation,
particularly in respect of the financial return to the State.
National Ports Policy 2013 continues the policy outlined in the 2005 Ports Policy
Statement to the effect that the ports sector should receive no exchequer funding
for infrastructure or development. NPP notes that additional funding opportunities
may arise through the European Investment Bank, the National Pension Reserve
Fund, NewERA or other State or EU sources. 36
7.3.4
Ports Policy and the Planning and Development System
Section 4 outlines a number of emerging trends in global maritime transportation.
These trends include inter alia: the shift by global shipping lines toward larger
vessels requiring access to deeper water and the reduced availability to use
33
Ibid., page 37
Ibid., page 14
35 Ibid., page 39
36 Ibid., page 40
34
36
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smaller ports; and the need for significant additional unitised port capacity within
the Greater Dublin Area emerging in the 2020-30 period.
It will be the responsibility of the Ports of National Significance (Tier 1) to lead the
response of the State commercial ports sector to future national port capacity
requirements.37 The Ports of National Significance (Tier 2) will also be expected
to develop additional capacity to aid competitive conditions.38
7.3.5
Environmental and Foreshore Issues
NPP identifies a number of environmental and foreshore issues.
The main environmental issue is the uncertainties that exist with regard to the
interpretation and application of the EU Birds and Habitats Directive in respect of
port development. However, the Department is seeking a national, port sector
specific engagement between relevant stakeholders so that clarity can be
achieved on the roles of port companies in this area.
One of the major issues with foreshore is that the Foreshore Acts have not been
amended or updated substantially since enactment of the original Act in 1933.
The Department is continuing to work on the development of new legislation that
will seek to modernise the foreshore consent regime.39
7.4
The Competition Authority Report on Competition in the Irish Ports
Sector (TCA)
It is important that competition in the ports sector is working well because
competition keeps prices and costs down, drives efficiency and service quality,
all of which are determinants of national competitiveness.40 This is especially the
case for Ireland since its location means that Irish ports are not exposed to
competition to the same extent as ports in other European countries.
37
Ibid., page 44
Ibid.
39 The Oireachtas Joint Committee on Environment, Community and Local Government carried out prelegislative scrutiny (PLS) on the General Scheme of the Maritime Area and Foreshore (Amendment) Bill
2013 and published a report (February 2014) which is available at:
http://www.oireachtas.ie/parliament/media/committees/environmenttransportcultureandthegaeltacht/Mariti
me-Area--Foreshore-Report-Final.pdf
40 The Competition Authority (2013) page 3
38
37
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The mandate given to the Competition Authority to carry out this report was
focussed on competitiveness in terms of jobs and exports in the context of the
Action Plan for Jobs. Therefore the cruise and passenger sector have been
excluded.
“Our main objective is to evaluate how inter-port competition (competition
between ports) and intra-port competition (competition within ports) is working
and make recommendations on how to improve both.” 41
7.4.1
Inter-port Competition
Inter-port competition arises where ports in the same country, or in different
countries, are rivals and compete for the same cargo and/or port users.42
Unlike ports on mainland Europe, Irish inter-port competition is confined to the
island of Ireland; Dublin and Belfast compete for Ro-Ro cargo; Waterford and
Cork compete for Lo-Lo cargo while Shannon Foynes and Cork compete for dry
bulk.43
The level of inter-port competition is determined by two main factors: demand
side substitution, which refers to the degree to which port customers or users are
able to switch between ports in response to changes in prices or levels of
service; and supply-side substitution, which relates to the extent to which existing
ports can switch between different types of cargo.
The main benefits of inter-port competition are lower port charges and the
provision of high quality, efficient port services. 44
Inter-port competition also incentivises improvements in service quality and port
efficiency. Port efficiency is found to be a key determinant of national
competitiveness that strongly influences transport costs.45
41
Ibid., page 4
Ibid., page 35
43 Ibid., page 35
44 Ibid., page 37
45 Ibid., page 38
42
38
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TCA notes that inter-port competition in Ireland is limited and cites the following
three main reasons:

The tendency for ports to display natural monopoly characteristics
and service the markets and traffic volumes of their respective
hinterlands;

High quality unitised services require a level of scale that can only be
achieved from a port with a hinterland of sufficient critical mass; and

Bulk throughput is largely determined by local bulk consuming
industries.
7.4.2
Intra-port Competition
Intra-port competition is the level of competition within a port. TCA examines two
types of intra-port competition, namely, competition between terminals and
competition to provide ancillary services.
Competition between terminals arises in ports where a port contains two or more
operators competing from different terminals. Dublin and Belfast are currently the
only ports on the island of Ireland with individual competing Lo-Lo terminals. Cork
has two separate Lo-Lo terminals, although they are both operated by the Port of
Cork.
Competition to provide ancillary service is where multiple operators provide
competing services within the same port.46
The level of intra-port competition is determined by two main factors: demand
side substitution, which is the degree to which port customers or port users are
able to switch between service providers within a port in response changes in
price or service levels; and supply-side substitution mainly refers to the extent to
which existing service providers can provide new services in a port.47
46
47
The Competition Authority (2013) page 58
Ibid., page 59
39
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The limited scope for inter-port competition means that it is vital to ensure that
intra-port competition in all Irish ports is working as well as possible.48
The benefits from intra-port competition are similar to those for inter-port
competition. Indeed effective intra-port competition is likely to have an even
greater influence on port charges and efficiency. This can influence inter-port
competition where a port with effective intra-port competition proves more
attractive compared to a port with limited intra-port competition.49
With regard to intra-port competition in Dublin Port there are three competing
terminal operators: Dublin Ferryport Terminals (DFT), Marine Terminals Limited
(MTL) and Burke Shipping Group (BSG).
48
49
Ibid., page 57
Ibid., page 59
40
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Scéim Ghinearálta an Bhille Cuanta (Leasú) | General Scheme of the Harbours (Amendment) Bill 2014
Figure 3: Map of Dublin Port
TCA had two main observations in relation to intra-port competition at Dublin
Port. The first relates to the leasing arrangements to the three terminal operators
at Dublin port which are considered far too long. DFT have approximately 110
years left to run on their lease; while MTL have 85 years left on theirs. BSG
operate under a 20 year ‘general stevedore licence’ that will be automatically
renewed this year for a further 20 years on identical terms.
TCA considers that these leases may have the effect of restricting competition by
seriously limiting the scope for new entry. TCA recommends that the terms and
conditions of the leases and licences, including their length, should be designed
41
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in a manner that ensures effective competition and reflects the level of
investment required to provide cargo handling services.50
Secondly, TCA noted that there are now only two general stevedores licensed to
operate in Dublin port, where one company BSG generally provides stevedore
services on the Northside of the Quay, while Dublin stevedores provide services
on the Southside. As such, TCA notes that these companies enjoy effective
monopolies in their respective licensed areas.
TCA recommends issuing at least two new general stevedore licences – one for
the Northside and one for the Southside of the port.
7.4.3
Privatisation and Multi-port model
TCA considered whether privatisation of one or a group of ports would make any
difference to inter-port competition. It found a consensus that governments
should retain public ownership of port infrastructure to avoid the risk of
monopolisation of essential assets by private firms, and that comprehensive
privatisation is incompatible with national interests. TCA found that it would be
unlikely that complete privatisation of an Irish port could over-ride the factors that
limit inter-port competition, provide more competitive pressure on Dublin port,
and/or significantly enhance intra-port competition. 51
In relation to the recommendation in the McCarthy Report that there are too
many small ports in Ireland and that state-owned ports should be restructured
into several competing multi-port companies, TCA found that this was unlikely to
enhance competition. Furthermore, TCA is not convinced regarding the
competition benefits of port amalgamation or multi-port companies.52
Before the Committee, Ms Isolde Goggin noted that, “[amalgamation] is not likely
to have much effect on inter-port competition or to generate the necessary
scale to compete with Dublin Port”.53
50
Ibid., page 88
Ibid., page 85
52 Ibid., page 93
53 Meeting of the Joint Committee on Transport and Communications, 5 February 2014. Transcript
available here.
51
42
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Box 5: Types of Port Management Models
There are three main types of port management models applicable to Ireland; a landlord
port, a tool port and a service port. Under the landlord model, port management
provides the supporting infrastructure while private companies own the superstructure
and employ stevedoring labour. Under the tool port model, port management provides
the infrastructure and the superstructure, while private companies provide the
stevedoring labour. Under the service port model, port management provides almost all
services, including labour. Dublin is predominantly a landlord port; however, Cork,
Shannon, Waterford and Belfast operate as a hybrid between a landlord port and a tool
port where stevedores own and operate their own cranes. Rosslare is more akin to a
service port.54
7.5
European Union Trans European Network (TEN-T)
At the beginning of the 1990s, the then 12 EC (EU) Member States decided to
set up an infrastructure policy at Community level in order to support the
functioning of the internal market through continuous and efficient networks in the
fields of transport, energy and telecommunications.
The first "Community Guidelines" for the development of a trans-European
network established a "master plan" connecting national networks of all transport
modes.
The proposed revision of the European Union’s Trans European Network – Transport
(TEN-T) consists of a comprehensive transport network, within which there is a core
network of high priority. The core network connects the major European urban areas
and includes the major European transport corridors, bottlenecks and multimodal hubs.
The comprehensive network includes an extensive and dense network of railways,
roads, inland waterways, ports, airports and freight terminals.
As of January 2014, the European Union has a new transport infrastructure policy that
connects the continent between East and West, North and South. This policy aims to
close the gaps between Member States' transport networks, remove bottlenecks that
still hamper the smooth functioning of the internal market and overcome technical
54
Ibid., page 14
43
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barriers such as incompatible standards for railway traffic. It promotes and strengthens
seamless transport chains for passenger and freight, while keeping up with future
technological trends. This project will help the economy in its recovery and growth, with
a budget of €26 billion up to 2020.55
The new TEN-T guidelines have identified the multimodal core network on the basis of
an objective methodology. The comprehensive network represents the basic layer of
the TEN-T and includes components for all transport modes – rail, road, inland
waterway, air and maritime as well as their connecting points and corresponding traffic
information and management systems. The core network represents the strategically
most important nodes and links of the trans-European transport system.56
The TEN-T proposal includes 319 ports, 83 in the core network and 236 in the
comprehensive network.57
The Ports of National Significance (Tier 1) Dublin58, Cork and Shannon Foynes have
been identified as part of the core network and the Ports of National Significance (Tier
2) Rosslare and Waterford are part of the comprehensive network.59
Box 6: EU Core Network
Ireland has one core network corridor crossing its country:
The North Sea-Mediterranean Corridor stretches from Belfast and the Irish ports of Cork and
Dublin, as well as from the northern UK ports Glasgow and Edinburgh through Belgium, with a
branch from Amsterdam and Rotterdam, via Luxembourg to Strasbourg and Basel and via Lyon
to the southern French ports of Fos/Marseille. It covers rail, road, airports, ports, RRT's and the
Dutch-Belgian inland waterway system as well as the Rhône river.60
For a list of maps of the core and comprehensive corridors of the European Union Ten-T
Transport networks, please click here.
55
See: http://ec.europa.eu/transport/themes/infrastructure/index_en.htm
European Commission (2012)
57 European Commission (2014a)
58 During the negotiations of the revised TEN-T Regulation (COM (2013) 296), Ireland proposed that all
existing ports in the Greater Dublin Area (Dublin, Dún Laoghaire and Drogheda) be included within the
Dublin ‘core’ port. It was noted in the RIA to the Regulation (dated July 2013) that, “This position was
deemed appropriate to provide maximum flexibility as regards any future decisions regarding major port
capacity development within the region and mirrors the currently applicable Regional Planning Guidelines
for the area”.
59 European Commission, List of Sea Ports in the Core and Comprehensive Network. Available at
http://ec.europa.eu/transport/modes/maritime/ports/doc/2014_list_of_329_ports_june.pdf
60 European Commission, TEN-T Guidelines – Ireland. Available at
http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/doc/ten-t-country-fiches/ie_en.pdf
56
44
Deireadh Fómhair | October 2014
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8. Main provisions and stakeholder submissions
8.1
Transfer of shareholding
Under the General Scheme of the Bill, the transfer of shareholding can be carried out
under either Head 7 or Head 12.
Head 7 provides for the transfer of the Ministerial shareholding in the current
commercial entity to a suitable local authority or local authorities. It envisages the
45
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continuation of the current commercial entity as established under section 7 of the
Harbours Act 1996 and formed and registered under the Companies Acts.
Head 12 allows for the dissolution of the company structure and complete integration
of the management and operation of the harbour within local authority structures. It
provides for an alternative transfer mechanism to that provided for by Head 7 and is
similar to the method used to for the dissolution, transfer and integration within local
authority structures of the 13 regional harbours listed in the Table to Section 87 of the
Principal Act (the 1996 Act - see Table 2 of this report).
Currently, either transfer option can be applied to the five named company ports of
regional significance at the discretion of the Minister.
The Chartered Institute of Logistics and Transport in Ireland (CILT) note that, “the
Summary of Regulatory Impact Analysis (RIA) indicates that Drogheda, Dun Laoghaire
and Galway should continue as port companies in the ownership of the relevant local
authorities – that is the Head 7 transfer process.”61
It is submitted by CILT that if this decision has already been taken, the Bill should be
amended to explicitly provide for this.62
Key issue 1
On the basis of the Regulatory Impact Assessment (RIA) to the Draft Heads of the Bill, and in
the interest of improving transparency, the possibility of clearly outlining which individual ports
will fall under a particular transfer process could, perhaps, merit greater consideration. For
example, the Bill could highlight which Head of the Bill, 7 or 12, will apply to each of the five
named Ports of Regional Significance, enabling those port companies to have clearer direction
as to their future ownership and governance structures.
61
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, Chartered Institute
of Logistics and Transport Ireland, June 2014.
62 Ibid.
46
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8.2
Ministerial Powers
8.2.1
Corporate Governance
It is understood that the Minister will not retain any corporate governance function or
oversight in the company upon transfer to local authority control and that these areas
will become the sole responsibility of the local authority. It has been submitted that the
companies should receive statutory guidance on these matters. Ms. Philomena Poole,
Chief Executive of Dún Laoghaire-Rathdown County Council noted that, “With regard
to Head 7(3) (c) I note that it is not intended that the Minister retains any corporate
governance function or oversight of the Company and that these areas will be the sole
responsibility of the Local Authority. It would be desirable that some guidance or
mandatory obligations in the area of corporate governance should apply expressly and
by law.” 63
CILT notes that “it would be beneficial to a continuing commercial mandate and to
good corporate governance of these companies to apply the existing statutory
provisions in section 30 of the Harbours Act 1996 relating to the composition of the
board together with the modifications proposed in Head 19(2) and to retain the power
of the board to appoint the chief executive...”64
8.2.2
Financial implications
Concerns have also been raised regarding the provisions under Head 11 enabling the
Minister to give directions to a company in which he/she is no longer a shareholder,
and how this might impact on the duties of the Council as a shareholder, and on the
company itself. CILT raised a concern that powers given to the Minister under Head 11
could be used to impose substantial financial obligations on the port companies without
concern for the financial consequences. It is considered that the Head might be
63
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, Dún LaoghaireRathdown County Council. June 2014.
64 Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, CILT, June 2014.
47
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amended to require the Minister to consider the potential financial consequences of
any proposed direction. 65CILT submitted that there should be inserted in the scheme
some safeguards against directions or controls which would place the viability of the
company, or the business of the company at risk.66
CILT noted that, “Head 11 proposes to give the Minister very wide general powers of
direction in relation to port companies transferred to local authority ownership. These
powers could potentially be used to impose substantial financial obligations on the
companies and their local authority owners.”
8.2.3
Retention of residual powers
CILT has raised a concern regarding Head 8 and the ceasing of the provision of port
services without the prior approval of the Minister. It is submitted that there is nothing
in the General Scheme of the Bill to prevent a local authority from, for example,
deciding to cease the handling of commercial cargo and operate as a leisure port.
Because of the possible implications for national ports policy, CILT submits that
consideration should be given as to whether the Minister should retain some residual
powers in this regard.67
8.2.4
Statutory Order for transfer
There is no provision in Heads 11 or 12 of the Bill for consultation with the relevant
local authority before the Minister makes an Order for a transfer. It is considered by
Galway City Council that there should be a statutory obligation on the Minister to
consult with the relevant local authority in advance of making any order under these
parts.68
65
Ibid.
Ibid.
67 Ibid.
68 Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, Galway City Council,
June 2014.
66
48
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Key Issue 2
A statutory obligation on the Minister of Transport, Tourism and Sport to consult with the
relevant local authority in advance of making an order under Heads 11 and 12 of the Bill could
be considered.
Key Issue 3
It may be beneficial if statutory guidance was provided to the new port company. It could
perhaps, for example, give greater clarity and direction to the Local Authority, were there in
place appropriate legislative guidance on corporate governance of the port companies in
advance of the transfer of control.
Key Issue 4
Consideration could be given to stipulations that would ensure the financial consequences of
any proposed direction from the Minister would be taken into account. This could offset the
current potential imbalance whereby a Minister may make a direction to a port company without
having to provide any funding in respect of any financial costs of that direction.
8.3
Structure and composition of port boards
8.3.1
Head 19
Head 19 amends the provisions relating to board membership of the relevant ports of
National Significance (Tiers 1 and 2) and provides for inter alia a statutory requirement
that all persons appointed as chairperson of a port company must appear before a
relevant Oireachtas Committee to discuss their appointment; a statutory requirement
that due regard is given to ensure an equitable gender balance on port boards; and to
ensure that port boards are comprised of persons with diverse and relevant expertise
and experience.
8.3.2
Ports users on port company boards
The Irish Exporters Association (IEA) is broadly in favour of the amendments as
proposed in Part V, Head 19, Amendment of section 30 of Principal Act, which are in
line with the proposals in their 2013 submission on the National Ports Policy.
However, it considers that there may need to be some more thought given to the new
requirement of a “person who has expertise and experience in relation to maritime
49
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transport services” and the prohibition of people serving on port boards who are
engaged in work at the port concerned.69
The IEA also has a concern that the limitations on board membership are too
prescriptive. In its submission to the Committee, the IEA noted that, “The existing
provision in the Harbours Act 2009 precluding port users from serving on boards
should be reviewed as it may have the effect of excluding persons who could bring
relevant and valuable expertise to the board.”70
However, Drogheda Port supports the proposition to exclude port users from sitting on
port company boards:
“There should continue to be no political or user representation on the Board – to
guard against any conflict of interest”.71
In relation to port users, it should be noted that the proposed European Commission
Regulation COM (2013) 296 aims to introduce a mandatory obligation for port
authorities to establish a ‘Port Users Advisory Committee’ which must be consulted
prior to the setting of port infrastructure charges and port service charges. The
Regulation will apply to all ports in the EU ‘core’ and ‘comprehensive’ networks
Shannon Foynes and Port of Waterford are the only Irish ports to have established
such committees and therefore additional administrative costs would apply for the
other Irish ports. The RIA to the Regulation notes that, “Based on the Commission’s
assumptions as per time commitment there might be an assumed cumulative cost in
Ireland of approximately €33,000 per annum in respect of this measure”.72
8.3.3
Director limits
The legislation foresees director limits of 2 terms. There are concerns that this is too
prescriptive and that it should be limited in years rather than terms because of the
commitment in the NPP to stagger board appointments for a more managed turnover
69
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, Irish Exporters
Association (IEA), June 2014.
70 Ibid.
71 Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, Drogheda Port
Company, June 2014.
72 DTTAS (2013c)
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of Directors – which will mean, initially at least, that some directors will have to be
appointed for shorter terms of service than 5 years.73
Key issue 5
The prohibition in respect of appointment of port users to port boards would appear to have a
clear basis in regional ports where there exists the possibility of there being only a very small
number of port users. However, the Irish Exporters Association (IEA) considers that this
prohibition (in the context of larger (tier 1/2) ports) may be too prescriptive and may limit
flexibility by failing to recognise that there may be a larger pool of eligible talented/experienced
individuals available amongst these port users.
Key Issue 6
Consideration could be given to the provisions in Head 19 of the Bill limiting Director terms in
years rather than in terms. Because of the commitment in the National Ports Policy to stagger
board appointments, situations could arise whereby a Director is limited to 6 years in office,
which could perhaps, be considered overly restrictive.
8.4
Multi –port Companies
Recommendation 29 of the Report of the Review Group on State Assets and Liabilities
states that, “The Review Group recommends that the state-owned ports, including
Rosslare, should be restructured into several competing multi-port companies, built
around Dublin, Cork and Shannon Foynes. The Competition Authority should be
consulted concerning the amalgamation process.” 74
The Irish Exports Association (IEA) submitted that, “The NPP [National Ports Policy]
does not respond adequately to the proposals in the Report of the Review Group on
State Assets and Liabilities suggesting the development of multi-port companies and in
this context the IEA would ask if consideration should be given to whether Dun
Laoghaire should form part of Dublin Port Group along with Dundalk.” 75
However, the Competition Authority found that restructuring state-owned ports
into several competing multi-port companies was unlikely to enhance
competition.
73
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, CILT, June 2014.
Review Group on State Assets and Liabilities (2013)page 62
75 Submission on DTTAS invitation to consider the various elements of the National Ports Policy (2013),
IEA, 2013
74
51
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“The Competition Authority is not convinced regarding the competition benefits of
port amalgamation or multi-port companies.” 76
Before the Committee, Ms Isolde Goggin noted that “[amalgamation] is not likely
to have much effect on inter-port competition or to generate the necessary scale
to compete with Dublin Port.”77
During the negotiations of the revised TEN-T Regulation (COM (2013) 296),
Ireland proposed that all existing ports in the Greater Dublin Area (Dublin, Dún
Laoghaire and Drogheda) be included within the Dublin ‘core’ port. It was noted
in the RIA to the Regulation (dated July 2013) that, “This position was deemed
appropriate to provide maximum flexibility as regards any future decisions
regarding major port capacity development within the region and mirrors the
currently applicable Regional Planning Guidelines for the area”.78
The proposed European Commission Regulation is still being negotiated with the
European Council and European Parliament but if Ireland’s position is to include
Dún Laoghaire and Drogheda within the Dublin ‘core’ port, this may involve costs
and benefits that have not been stated (in the context of the policy proposals
contained in this General Scheme). On the one hand, the future compliance with
EU Regulations affecting ‘core’ and ‘comprehensive’ ports could, perhaps, be of
particular burden to the two ports of regional significance, whilst on the other
hand, the possibility of applying for EU funding applicable to ‘core’ ports could be
a welcome opportunity.
Key Issue 7
In light of the continued decline of port traffic and throughput for smaller ports (globally and in
Ireland) together with recommendations in the Report by the Review Group on State Assets
and Liabilities (McCarthy Report) concerning the restructuring of state-owned ports into several
competing multi-port companies, and the Irish position in relation to the proposed European
Commission’s revised TEN-T Regulation, that all existing ports in the Greater Dublin Area
(Dublin, Dún Laoghaire and Drogheda) be included within the Dublin ‘core’ port; greater
76
The Competition Authority (2013) page 93
Meeting of the Joint Committee on Transport and Communications, 5 February 2014. Transcript
available here.
78 DTTAS (2013c)
77
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Deireadh Fómhair | October 2014
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consideration could, perhaps, be given to the impact that any proposed transfer of control to
differing county council structures would have on any future amalgamation of ports.
Key Issue 8
Greater clarification on the policy position being taken with regard to the future status of
European Commission-defined ‘core’ and ‘comprehensive’ port status, could, perhaps, be of
benefit for the future planning of Irish ports. This is especially relevant to the ports in the
Greater Dublin Area (GDA).
Such clarification with regard to policy direction may also be relevant in the context of the
proposals within this General Scheme to transfer two ports in the GDA to local authority control.
8.5
Potential for Privatisation
Recommendation 30 of the Report of the Review Group on State Assets and Liabilities
states that, “The Review Group recommends that privatisation of some or all of the
ports should be considered, ideally after the recommended restructuring. The
adequacy of competition in the sector on an all-Ireland basis should be reviewed prior
to privatisation and suitable regulatory arrangements instituted if deemed necessary.”79
In its submission to the Committee, the IEA stated that, “The IEA does not accept that
the NPP adequately responds to the recommendation in the Review Group’s Report on
the privatisation of ports, ideally after any restructuring. We do not favour the
privatisation of the Tier 1 and 2 ports but it may be worth considering the privatisation
of some of the regional ports, particularly as a way of levering investment.
Furthermore, CILT also submitted that: “The National Ports Policy did not adequately
respond to the recommendation in the Review Group’s report that privatisation of ports
be considered, ideally after restructuring”. It continued, “This might have been worth
considering for some of the regional ports, particularly as a way of levering
investment.”80
The Competition Authority considered whether privatisation of one or a group of
ports would make any difference to inter-port competition.
79
80
Review Group on State Assets and Liabilities (2011), page 63
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, CILT, June 2014.
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It found a consensus among stakeholders that governments should retain public
ownership of port infrastructure to avoid the risk of monopolisation of essential
assets by private firms, and that comprehensive privatisation is incompatible with
national interests.81 It also noted that the most common model of port ownership,
globally, was one of private/public partnership, where the port authorities are
generally public institutions and the port service providers are private firms.
The Competition Authority found that it would be unlikely that complete
privatisation of an Irish port could over-ride the factors that limit inter-port
competition, create more competitive pressure on Dublin port, and/or significantly
enhance intra-port competition. 82
Key Issue 9
Although Head 8 allows flexibility to new shareholders in considering future methods of
infrastructure funding, including, for example, through the sale of an equity stake, consideration
could, perhaps, also be given to whether or not there is any potential for privatisation of some of
the ports of regional significance. As the ports sector does not receive any exchequer funding,
the development of the ports sector is more dependent on private sector investment.
Privatisation has been suggested in the Report by the Review Group on State Assets and
Liabilities (McCarthy Report).
8.6
Dividend Policy
Whilst expressing support for the proposed criteria to be used in determining dividend
policy the IEA has concerns that the 30% guideline figure mentioned in the NPP could
become the default norm.83 The IEA further considers that neither the Minister nor a
local authority should be allowed to pursue a dividend policy that risks the ports
concerned having to charge traders prices that are excessive and could render the
business activity of the trader uncompetitive.84
81
The Competition Authority (2013) page 84
Ibid., page 85
83 Submission on DTTAS invitation to consider the various elements of the National Ports Policy (2013),
IEA, 2013
84 Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, IEA, June 2014
82
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8.7
Rosslare Europort
CILT notes that the 2013 Ports Policy Statement undertook to publish a pathway for
the port by the end of last year following receipt of advice from an external consultancy
study. Whilst acknowledging that the ownership arrangements for Rosslare Europort
are complex, CILT considers that an early and definitive statement by Government
clarifying future intentions for the port would be most welcome.85
The IEA highlighted the “importance of Rosslare as a strategic gateway for trade
to/from Ireland and it should be encouraged to achieve its full potential.” 86
8.8
Superannuation schemes
Head 13 concerns the provisions with respect to staff of the port companies upon
transfer of shareholding of the new company to the local authority, in particular (1) that
the local authority will accept into its employment those members of staff of the
dissolved port company (2) those staff will be entitled to the same benefits as they
currently hold (3) continuation of the superannuation scheme to which the staff were
previously entitled to shall be ensured.
8.9
Due Diligence
In their submissions to the Committee, Galway City Council, Wicklow County Council
and Dún Laoghaire County Council have all called for a due diligence exercise to be
conducted and for the expenses to be borne by the Department of Transport, Tourism
and Sport. (DTTAS)
In July/August 2014, DTTAS notified local authorities that funding subject to a strict
total maximum of €30,000 per local authority was available to conduct an independent
due diligence process, if deemed necessary by the local authority.87
9. References
85
Submission to General Scheme and Heads of a Harbours (Amendment) Bill 2014, CILT, June 2014
Submission on General Scheme and Heads of a Harbours (Amendment) Bill 2014, IEA, June 2014
87 E-mail correspondence between L&RS and DTTAS, 4 th September 2014.
86
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
The Competition Authority (2012) “Competition in the Irish Ports Sector”, Public
Consultation. 14 December 2012. Available at
http://www.tca.ie/images/uploaded/documents/Competition%20in%20the%20Irish%20P
orts%20Sector%20-%20Public%20Consultation.pdf

DTTAS (2013a) National Ports Policy. Available at
http://www.dttas.ie/sites/default/files/node/add/contentpublication/National%20Ports%20Policy%202013.PDF

DTTAS (2005) Ports Policy Statement. Available at
http://www.dttas.ie/sites/default/files/node/add/contentpublication/Ports%20Policy%20Statement%202005.pdf

The Competition Authority (2013) ‘Competition in the Irish Ports Sector’. Available at
http://www.tca.ie/images/uploaded/documents/Ports%20Study%202013.pdf

DTTAS (2014) ‘Varadkar publishes Heads of Bill to reform the port sector’. Press
release issued 6 June 2014. Available at http://www.dttas.ie/pressreleases/2014/varadkar-publishes-heads-bill-reform-port-sector

DTTAS (2013b) Summary of Regulatory Impact Analysis – Consultation stage,
Harbours (Amendment) Bill. Published in August 2013. Available at
http://www.dttas.ie/sites/default/files/publications/corporate/english/summaryregulatory-impact-analysis-ria/summary-regulatory-impact-analysis-ria-august-2013.pdf

Review Group on State Assets and Liabilities (2011) ‘Report of the Review Group on
State Assets and Liabilities’. Available at file:///C:/Users/SheanonE/Downloads/Reportof-the-Review-Group-on-State-Assets-and-Liabilities%20(2).pdf

European Commission (2014a) ‘Ports 2030 – Gateways for the Trans-European
Network’. Available at http://ec.europa.eu/transport/modes/maritime/ports/doc/2014-0429-brochure-ports.pdf

European Commission (2012) ‘Planning Methodology for the trans-European transport
network’. Available at
http://ec.europa.eu/transport/themes/infrastructure/doc/web_methodology.pdf
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
DTTAS (2013c) Summary of Regulatory Impact Analysis – Draft for consultation stage,
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL establishing a framework on market access to port service and financial
transparency of ports. Available at
http://www.dttas.ie/sites/default/files/node/add/contentpublication/Ports%20Consultative%20RIA.pdf

Julie O’Neill (2010) ‘Positioning Wexford for the Upturn. Report Commissioned by
Wexford County Council. Available at
http://www.wexford.ie/wex/Departments/CommunityEnterprise/Downloads/Thefile,1530
0,en.pdf
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Appendix 1: Preparation of legislation
Source: Department of the Taoiseach Cabinet Handbook. Available at
http://www.taoiseach.gov.ie/eng/Publications/Publications_Archive/Publications_2007/CABINET_HANDB
OOK2007.pdf
58