Mr. Ciarán Aylward:

In terms of actual costs, the literature to which we have looked in this regard indicates that the cost of moving goods through our ports in terms of overall transport costs is approximately 10%, including haulage costs of approximately 5%. The largest cost is generally cash and cargo handling, which is the stevedore and lo-lo handling charges, which amounts to 60% to 90%. As mentioned by Ms Goggin, it is not necessarily the cost that has a disproportionate effect on trade volumes. A 10% increase in transport costs results in a 20% decrease in terms of volume.

On the submissions, concern was raised about the safety issue, although more in the context of the level of space on quays in particular. The concern as expressed by the ports is that there should not be ten or 11 stevedores operating in a confined space. We are seeking information from the ports, supported by evidence, in regard to where limited space is available. If in some cases there is only limited space available and it is not possible to provide for ten operators in a quay space, there are ways of getting around this, including tendering, which would ensure competitive influence is retained. For example, where for safety reasons it is only possible to allow three operators in a particular space, a five year contract could be awarded and renewed thereafter.

In regard to intra-terminal competition, we have looked in depth at the different types of ports in Ireland, their sizes and the best management model for each. For example, Dublin port is a type of landlord port. When a port is large, it is generally operated by a public operator and private service providers operating under lease and licence. The economic literature indicates that in some cases it is better to have a tool port structure, whereby the port company is publicly owned but in some cases owns some of the infrastructure and leases out operation of the labour.

We believe that would work and would be a more efficient operation in ports such as Cork and Waterford. However, we feel more could be done in terms of internal competition. For example, in Cork all the lo-lo cranes are operated by the port company. Perhaps there could be two competing stevedores who get a contract to operate the same crane. That has been done in other countries and is often deemed to be best practice.

In terms of the lease lengths, we looked at best practice in a number of different countries. Ms Goggin mentioned that the lease length in Dublin, in particular, is 80 to 110 years. It is generally deemed that 15 to 30 years should be the adequate length. Deputy Harrington mentioned rolling contracts. Belfast recently renegotiated the length of the lease structure and it has a five-year lease that operates to a maximum of 20 years. We would like to see something along those lines to improve competition.

We did some research into the effect of increasingly larger vessels; they seem to be increasing across the board. There is some scepticism over the impact this will have on Ireland, as an island nation on the outskirts of Europe. Most of the ships tend to be feeder-type vessels that either go directly to the UK or the hub ports in continental Europe. While there has been some increase there, will they become vessels of the size of the large Panamax ships? They probably will not because they tend to have their disadvantages. The throughput in Dublin Port, for example, is not sufficient. While there might be economies of scale in having a large vessel, it might take a week to fill it up so there is not much point in it.

However, Cork Port and the Shannon Foynes Port have natural advantages in terms of water depth. If there is an increase in vessel size in the future, it will be important for the Government to be aware of improving the transport links to those ports, particularly the rail links, because the depth of water in Dublin might not be sufficient to accept the larger vessels.