New policy will see State as 'active shareholder' in port sector
02 April 2013
None of the nine State-owned Irish ports are to be privatised, but local authorities are to become shareholders in regional ports and private investment will also be welcome, according to the National Ports Policy launched last week. Under the terms of the new policy, shareholders will be encouraged to take an ‘activist approach’ to managing their ports, to ensure that the State gets best value from these crucial facilities – whether that shareholder is the Government or the local authority.
Previous policies have not recognised the huge diversity among the 19 ports that handle commercial freight. Speaking at the launch of the new policy, Minister for Transport, Tourism & Sport Leo Varadkar said that the core objective of the new policy was to “facilitate a competitive and effective market for maritime transport services”.
“Our commercial ports are vital to our economic recovery and to future economic growth. They’re the gateways for most of our merchandise trade, and for significant numbers of tourists and passengers,” he said.
“Government must be a more active and demanding shareholder. By that I mean a shareholder that clearly outlines its vision and demands of the sector as a whole, as well as its expectation for individual ports,” added Varadkar. “This will include a re-emphasis on the ports’ commercial remit, with a requirement that they adhere to a dividend policy and invest and develop on a sound commercial basis. While no ports are earmarked for privatisation, private sector investment and involvement will be encouraged.”
There are currently nine State-owned commercial port companies – Dublin Port Company, the Port of Cork Company, Shannon Foynes Port Company, the Port of Waterford Company, Galway Harbour Company, Drogheda Port Company, New Ross Port Company, Wicklow Port Company and Dún Laoghaire Harbour Company.
The nine companies are established and operate pursuant to the Harbours Acts 1996-2009 and are private limited companies whose shareholders are the Minister for Transport, Tourism & Sport and the Minister for Finance.
The new policy recommends that instead of adopting a ‘laissez faire’ approach, the Government will become a more active or activist shareholder, while private investment in ports will also be encouraged. It also promotes a move from a ‘one size fits all’ policy to one that recognises that different ports have different roles to play, now and in the future. In recognising the different roles of each port, this policy determines which are of ‘National Significance’ and have a national function, and which are of ‘Regional Significance’, with a specialist significance at national level.
Tier 1 Ports of National Significance are designated as: Dublin Port Company, the Port of Cork Company and Shannon Foynes Port (each of which accounts for more than 15% of national trade). Tier 2 Ports of National Significance are designated as Rosslare Europort and the Port of Waterford Company (either of which accounts for between 2-15% of national trade);
Varadkar said the Government expected the Tier 1 ports to lead the response of the State commercial ports sector to any future national port capacity requirements. “There is also a role in this regard for the two Tier 2 ports to develop additional capacity to aid competitive conditions within the unitised sectors (lift-on/lift-off and roll-on/roll-off) in particular,” he said. These five ports collectively handle approximately 92% of all tonnage handled at Irish ports in any given year.
The remaining 14 ports are designated as Ports of Regional Significance and account for 8% of national trade, but many have national significance in terms of specialist services or products such as regional freight, leisure, aquaculture facilities, urban regeneration or cultural and recreation amenities. These include the five State companies at Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow. Ports of Regional Significance will be placed within a local authority-led governance structure, with local authorities taking shareholdings in the ports.
According to the policy, future investment in deepwater capacity will not occur until it has been subjected to stringent analysis commissioned by the Department, and will be led by the national ports. The commercial mandate of ports will remain – they will be expected to turn a profit, pay a dividend and will not receive Exchequer grants.
The new policy will allow for appropriate private-sector investment in ports. A new performance oversight system, and a new approach to capacity planning, will be developed to make sure that all ports are fulfilling their potential.
The integration of existing Irish Maritime Development Office financial analysis with emerging operational benchmarking systems at a European level will allow for the development of a port performance management system by 2016. Director of the Irish Maritime Development Office, Glenn Murphy, said the policy provided clarity to port companies in terms of their future direction. He added: “It will also benefit the thousands of Irish and international companies that depend every day on effective and efficient ports to connect their business with the global economy.”
Last June, the Competition Authority was asked to conduct a study of the ports sector in Ireland. The results of this market study are set to be published later this year. Varadkar said that he intended to consider closely any recommendations of the study and respond appropriately within six months of its publication.
The Minister has also recently commissioned a comprehensive review of the current and future role of Rosslare Europort. The report is due by end of this month. Rosslare Europort is the operational and financial responsibility of Iarnród Éireann, while technically forming part of the Fishguard and Rosslare Railways and Harbours Company.http://www.engineersjournal.ie/2013/04/02/national-ports-policy-requires-more-government-involvement-with-port-sector/http://www.engineersjournal.ie/wp-content/uploads/2013/04/iStock_000006002082Large-1024x590.jpghttp://www.engineersjournal.ie/wp-content/uploads/2013/04/iStock_000006002082Large-300x300.jpgNewsCork,Dublin,exports