Port Masterplan to bridge the gap between the city and the sea
30 May 2013
Eamonn O’Reilly, chartered engineer and chief executive of Dublin Port Company, is speaking at Engineers Ireland’s 2013 Annual Conference, entitled ‘Building Ireland’s Business Networks’, on Thursday, 6 June at Dublin’s Ballsbridge Hotel
For a city by the sea, Ireland’s capital is curiously unconnected to Dublin Port. The country’s main port handles almost 50% of the Republic’s trade, two thirds of all containerised trade and is the largest of the three base ports on the island, the others being Belfast and Cork.
Base ports offer multi-modal services with connections to transhipment ports such as Rotterdam and are important strategic trading hubs. Dublin Port also handles over 1.76 million tourists through ferry companies and through cruise vessels visiting the city.
Yet most citizens of the capital are unaware of the strategic importance of the port on their doorstep. Being an island, Ireland’s only way of trading is through seaports and airports. Irish seaports handle 99.5% of Irish foreign trade by volume – some 90% of Ireland’s gross domestic product is exported and 42% of this goes through Dublin Port.
It is no wonder, then, that one of Dublin Port Company’s (DPC’s) priorities under its Masterplan 2012-2040 is to soften the interface between the port and the city. “As part of Dublin Port’s Masterplan, we focus on three areas,” explained electrical engineer Eamonn O’Reilly, chief executive of DPC. “The first is capital, which is to build the infrastructure that’s needed and do it at the right time; the second is operations – squeezing as much through the infrastructure as possible; and the third is money, which is maximising the profit and economic return from investment in the infrastructure.
“Engineers play a vital role in delivering public services and in not only building but also operating the necessary infrastructure to keep Ireland competitive,” he added. “We already have an excellent motorway network and the Dublin Port Tunnel, which means that we have enough road capacity in relation to demand for many years to come. Public transport around the Greater Dublin area has also vastly improved in recent years.
“However, we’ll need considerable engineering expertise over the next decade or so, because operations and economic return in Dublin Port all depend on the right infrastructure.”
NATIONAL PORTS POLICY
Dublin Port Company is a self-financing, private limited company wholly owned by the State, whose business is to manage Dublin Port. Established as a corporate entity in 1997, DPC is responsible for the management, control, operation and development of the port.
Under the National Ports Policy, which was announced in March, Ireland has five ports of national significance graded according to two tiers. Tier 1 includes Dublin, Cork and Shannon Foynes ports: these are commercial, State-owned companies reporting to national Government. Tier 2 incorporates Waterford and Rosslare ports and their structure and status is under review. All other ports, such as Drogheda, Dun Laoghaire, Wicklow, New Ross and Galway, are considered to be of regional significance. These will come under the governance of local authorities.
This tiered port structure provides more certainty in terms of planning. “One of the benefits of the Policy is that when we go to An Bord Pleanala, Dublin Port’s status as a port of national strategic importance is clearly set out in Government policy. In 2010, we failed to get permission to infill 21 hectares of Dublin Bay and this created an element of uncertainty about future planning initiatives. An Bord Pleanala now has a ‘touchstone’ in the Ports Policy and it brings clarity to one important aspect of the planning process.”
According to the 2013 State of Ireland report, issued by Engineers Ireland, Ireland’s port infrastructure is in need of considerable improvement – scoring a poor ‘C’ grade, meaning “inadequately maintained, unable to meet peak demand and requiring significant investment”.
“I am not so sure that Ireland’s ports merit only a ‘C’grade,” said O’Reilly. “Whereas we do need to plan for larger ships in the long term, there remains considerable capacity available in existing infrastructure to cater for growth in the years ahead.”
Currently, Ireland imports twice as much as it exports. In 2011, through all 21 ports in the Republic of Ireland, exports totaled 15.2 million tonnes in volume, whereas the country imported 29.8 million tonnes. In Dublin Port, the figure was 7.2 million tonnes in exports and 12.3 million in imports. Almost one-third of this was dry goods (30.9%), followed by roll on-roll-off (ro-ro) at 26.8% and liquid bulk at 26.2%. After that came load-on load-off (lo-lo) at 14% and finally break bulk at just over 2%.
“Ports play a crucial role in the supply chain,” O’Reilly explained. “The demand for port infrastructure and services is a derived demand from the market for shipping services, but the demand for shipping services is itself a derived demand. Port charges are a small proportion of overall supply-chain costs – for example, moving a container or trailer from the Benelux region to the Greater Dublin Area would cost around €800. However, Dublin Port Company’s cargo dues represent only 3.5% of this total.
“Notwithstanding this, it’s important to keep supply-chain costs as low as possible for national competitiveness. Containers and trailers make up 81% of Dublin’s business and charges for these are 5% lower now than they were in 1997.”
The Dublin Port model is based on public ownership and private operation. In 1990, Dublin Port Company had 720 employees. Today, there are 145. Not only does DPC compete with other ports on the island, it also operates a competitive business model within the port itself, where eight terminals compete for business in the unitised sector. Unitised trade is comprised of lo-lo and ro-ro and accounts for over 80% of Dublin Port’s trade.
“Dublin is a classic landlord port,” O’Reilly explained. “Dublin Port Company is a State-owned, commercial company responsible for operating and developing Dublin Port. We’re unique in Ireland in that all cargo-handling equipment and operations are provided by private-sector companies in competition with each other. The only significant services we provide are towage and pilotage. Towage brings in €1.6 million annually, while pilotage brings in €2.8 million.
“We’re a limited liability company, with shares owned by the Irish State. Our commercial mandate means we raise our own finance – the freedom to manage franchises is key to our success.”
The port operates within a number of constraints, however, not least of which is the channel itself. The channel across the bar is -7.8m at Chart Datum. Vessels drawing up to 10.2m can enter the port at high water of normal tides, whereas vessels drawing up to 7m can enter at any state of tide. “Although it’s not a constraint of any significance today, we’ll need to look at channel deepening in the years ahead,” O’Reilly acknowledged.
The lands associated with the port amount to 260 hectares, but the city is encroaching eastwards towards the port area. “If we try to go eastwards, we’ll hit Special Protected Areas, which protect bird species, and Special Areas of Conservation, which protect habitats and other species of EU conservation concern,” the chief executive added. Resources are in place to fund further development of the port’s expansion plans without recourse to Exchequer funding, a key tenet of the National Ports Policy.
In 1996, throughput at Dublin Port was just over 15 million tonnes. This rose to 28.1 million tonnes in 2011, down from a peak of 30.9m tonnes in 2007. Within this, however, exports continued to grow and were up 2.8% in 2011 at 11.5 million tonnes.
“We’re at an important juncture,” O’Reilly explained. “Our strategic direction was halted when we didn’t get permission for the infill in 2010. As a result, we’ve adjusted our plans and have three aims in the short-to-medium term. The first is to maximise what we have – we’ve gained control over 21 hectares of surrounding lands in the past few years, particularly through the acquisition of some long-term leases, so these can be used for transit storage of cargo in the future.
“The second is to re-integrate the port with the city and increase awareness of Dublin as a port city. This will help people to understand our licence to operate and our need to grow, as well as improving the physical interface between the city and the port in terms of the built and natural environment.
“Finally, we want to ensure we can cope with future growth. The Masterplan shows how the port could handle 60 million tonnes by 2040, which is based on a growth rate of 2.5% per annum. Even in this economic climate, we believe that merchandise trade flows in and out of Ireland should continue to expand to 2040, albeit not at the levels of growth we saw between 1992 and 2002. A growth rate of 2.5% is reasonable when we look at the growth that the port has experienced since 1950.”
Between 1950 and 1980, the average growth rate at Dublin Port was 3.2% per annum. Between 1980 and 2010, the rate was 4.7%. In this context, Dublin Port Company believes that reaching 60 million tonnes by 2040 on an estimated annual average growth rate of 2.5% is a reasonable basis upon which to plan the future development of the port. “If we achieve a higher growth rate than 2.5%, then we can implement other elements from the Masterplan sooner,” O’Reilly added.
Getting control over port lands is vital to achieve this projected growth, he continued. The Alexandra Basin Redevelopment (ABR) is important in this regard and this is the first major project from the Masterplan. This will allow cruise ships visiting Dublin to be brought further up the Liffey in a new plan to develop deepwater berths.
Part of the river at Alexandra Basin is to be dredged to create 12m deep berths for some of the world’s biggest liners to dock beside the East Link toll bridge. It will also ensure that tides will not stop the bigger ships getting closer to the city centre. The new deepwater berths by the toll bridge will have room for two 340m cruise ships and one 145m cruise ship. Berths will also be deepened and extended at Alex Quay West and Ocean Pier West in the docks to accommodate dry-bulk freight ships and container ships. Two berths for ro-ro freight ships and a large ship-turning area have also been included in the plans.
Larger cruise ships coming into Dublin currently dock in cargo berths at the Alexandra Basin, a few kilometres away from the East Link bridge and the easy access to the city centre.
“This is part of our integration of the city and the port and it will also free up cargo berths so that they can used according to their intended purpose and allow for tonnage growth,” O’Reilly explained. “We’ve begun the pre-planning consultation process and we expect to submit the planning application for the work to take place in September.
“We hope to start the ABR in early 2015 and complete the cruise berths by the end of 2016. We’ve secured almost 100 cruise ships for Dublin this year and this development will bring even more ships right into the heart of the city.”
This electrical engineer believes that three elements are vital to the future success of Dublin Port: more land, extra berths and a sufficient channel. The development of all three will hinge on considerable engineering input. Although he does not work as an engineer on a daily basis, O’Reilly said that his background has been invaluable in the management of the port. “It definitely is an asset, in terms of integrating what’s needed from an engineering and planning point of view into costs and finance,” he concluded.
Eamonn O’Reilly’s presentation at the Engineers Ireland 2013 Annual Conference is entitled ‘Roads, rail and ports – Ireland’s export infrastructure’. For more details or to book your place at the conference, which takes place on 6 June at Dublin’s Ballsbridge Hotel, see www.engineersirelandconference.ie. Other speakers at the conference include:
Michael Phillips, chartered engineer and president, Engineers Ireland
John Ahern, managing director, Indaver
Dr John Tierney, managing director, Irish Water
Laura Burke, director general, Environmental Protection Agency
Naoise Ó Muirí, Lord Mayor of Dublin
Brendan Lynch, managing director, Group Technology, eircom Ltd
Michael Cawley, chief operating officer and deputy chief executive, Ryanair Ltd
Brian Brennan, managing director, Veolia Transdev Ireland
Michael Crothers, managing director, Shell E&P Ireland
Fintan Slye, chief executive, EirGrid