John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The purpose of this morning's meeting is to engage with representatives of Dún Laoghaire-Rathdown County Council, the Galway Harbour Company, the Irish Exporters' Association and the Chartered Institute of Logistics and Transport in Ireland as part of the pre-legislative process relating to the general scheme of the harbours (amendment) Bill 2014. On behalf of the committee I welcome Mr. Pat Mangan, Chartered Institute of Logistics and Transport; from Dún Laoghaire-Rathdown County Council, Mr. Richard Shakespeare, director of environment, Ms Philomena Poole, CEO, and Mr. Frank Austin; from the Irish Exporters' Association, Mr. Simon McKeever, CEO, and Mr. Howard Knott, director of trade facilitation; and Mr. Eamon Bradshaw and Captain Brian Sheridan from the Galway Harbour Company.
I draw the witnesses' attention to the fact that, by virtue of 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person, persons or entity by name or in such a way as to make him or her identifiable. I also advise that any submission or opening statements they have made to the committee will be published on the committee's website after the meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
I propose that all four witnesses be given the opportunity to make their statements. They have submitted their statements in advance and members have had a chance to go through them. Therefore, I ask that presentations be kept as brief as possible in order to allow members to ask questions afterwards. I shall be as flexible as I can be and I want to do this in as orderly a fashion as possible.

Ms Philomena Poole:

I thank the committee for the opportunity to address it this morning. I wish to advise that the statement that I am about to make is that of the council's executive and not the elected members. The statement, for the most part, reiterates and updates my submission to the joint committee on 30 June of this year.

Dún Laoghaire-Rathdown County Council is fully supportive of the national ports policy and has engaged with the Department of Transport, Tourism and Sport since the policy was launched last year. I view Dún Laoghaire Harbour as a valuable and integral asset of Dún Laoghaire-Rathdown as a county and of the town of Dún Laoghaire as well as the greater Dublin region.

The council has commenced a formal engagement with Dún Laoghaire Harbour Company. A working transition steering committee now meets regularly to enable the transition of functions from the Minister to the chief executive of the local authority. The steering committee is currently in the process of engaging due diligence expertise, having received confirmation from the Department that it will fund the exercise. It is anticipated that the process will run alongside the work of the transition group and will highlight any areas for attention or concern prior to the transfer.

Having reviewed the general scheme of the harbours (amendment) Bill 2014 and the associated regulatory impact analysis, my comments are as follows. Heads 1 to 6, inclusive, are noted and we have no comment. With regard to head 7, in the explanatory notes it is clear that control of the port is to transfer to the local authority. However, as it currently stands, the board has no vacancies as all positions have been filled. In effect, the new shareholder of the local authority will have no ability to appoint members to the board of the company until 2016. The explanatory note to subhead (3)(c) states that ministerial appointments of directors will no longer apply, yet the authority for this function is not expressly indicated in the heads. In my opinion, that should be done in the Act and not in company fillings as envisaged. Consideration should be given by the joint committee to affording the chief executive an opportunity to appoint supplemental board members in the short term to ensure a smooth transition. This has been the subject of discussion with Department officials and they have indicated that they will bring the matter to the attention of the Minister. It should also be noted that any reference to county or city manager should now be replaced with the new title of chief executive. I note that it is not intended that the Minister retain 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 apply, expressly and by law, to the company. That means obligations consistent with those applicable to the council staff with regard to ethics, particularly the code of conduct and the Local Government Act 2001. In this regard the joint committee may wish to consider requiring that the statutory ethics provisions of Part 15 of the Local Government Act apply to the company. The matter has been discussed with Departmental officials and could be addressed in sections 27 to 29, inclusive, of the Harbours Act 1996.

It is further noted that there is no reference in the scheme as to whether sections 139, 140 or 183 of the Local Government Act 2001 will apply in regard to the operation of the company. The joint committee might wish to consider the implications of same.
Heads 8 to 10 are noted and we have no comment. In head 11 it is noted that the Minister's powers to issue directions are limited as described in head 11(1) and these are sui generis to the development of harbours and safety in the context of the national ports policy rather than relating to specific locations.
In Part 3, heads 12 to 16, the council has already expressed a preference for the process in Part 2 of the general scheme and does not propose to comment on Part 3. Part 4 does not relate to Dún Laoghaire Harbour and Part 5, head 19, does not apply to the harbour. On head 20, it is noted that this provision maintains the exclusion of elected members from being directors of a company established in accordance with Part 2, as has been the case since 2009. Heads 21 to 23 are noted and we have no comment. On head 24, the council notes this provision and that there is an extant request made under the Harbours Acts to extend the limits of Dún Laoghaire harbour from 600 m to 1500 m. The council is supportive of this request as it will facilitate the continuing development of the cruise business in Dún Laoghaire. Head 25 is noted and we have no comment.
It should be noted that, following recent discussions with the Department of Transport, Tourism and Sport and having reviewed a document entitled “Likely required Ministerial reference changes on foot of a company transferred under Head 7”, dated 30 July 2014, there appears to be a significant transfer of oversight responsibilities and autonomy from the Minister to local councils, which we have been seeking in our discussions. In particular, there are the proposed changes to sections 27, 28 and 29 of the Harbours Act 1996.
The issue mentioned earlier regarding control, under Part 2, appears to be addressed in head 17(3). However, the proposed changes are silent on the existing company board composition and whether the chief executive will have the power to remove existing directors upon assuming responsibility for the company. Clarification is also required regarding the terminology used when redrafting the legislation. For example, where the words "local authority" are used, does that refer to the elected council or the chief executive?

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I invite Mr. Bradshaw from Galway Harbour Company to make his presentation.

Mr. Eamon Bradshaw:

I thank the committee for the opportunity to speak this morning. We are not legislators or legal people so my presentation is about the context in which the port of Galway will operate following the transfer of the shareholding to Galway City Council. We are very much aware of the proposed changes and are kept well informed by the Department of Transport, Tourism and Sport. We take a positive view of the changes.
The steering group for ourselves and Galway City Council has been appointed. The committee will already have received a copy of our report relating to the Bill and, second, a copy of a submission to the Department of Transport, Tourism and Sport on the transfer of control of ports of regional significance to local authorities.
The port of Galway is a progressive and forward-thinking port with major ambition for expansion. This ambition is strongly supported by the current and past boards. The port is a gated medieval port operating for just four hours per day, with a maximum capacity to handle ships of not more than 7,000 tonnes. Despite this, the port has been profitable every year since its incorporation in 1996. There was an exception in 2012 due to necessary works associated with the Volvo Ocean Race stopover. At this stage, however, the port is not fit for purpose. What business could be sustainable if it were only open for four hours per day?
The port has applied to An Bord Pleanála for planning permission for an extension to the port which will involve the formation of approximately 24 hectares of new land and 660 m of deep-water quays. The result will be a modern port capable of facilitating ships with a tonnage in excess of 30,000 tonnes and the world's largest cruise liners. Unfortunately, we recently had the experience of the Crystal Symphony, which came into the bay and anchored off Mutton Island but was unable to bring its 1,500 passengers ashore due to weather conditions and the fact that it could not berth. That is an ongoing problem and a major disadvantage. The development of the new port will allow, in turn, the development and rejuvenation of the inner dock area of 32 acres which is located in the city centre. The plans in that respect are for arts and tourist facilities and living accommodation. Connected to Galway Harbour Company is the Galway Harbour Company Enterprise Park of 40 acres, in which 500 individuals are employed. A further 500 jobs are projected to result from the port extension. In addition, 200 jobs will be created during construction.
The national ports policy, NPP, which was published in 2013, designated the Port of Galway as a port of regional significance or in the third level of commercial ports in Ireland. This designation was not welcome, as it clearly placed the port at a disadvantage in terms of competing with national ports - that is, tier 1 and tier 2 ports. More importantly, it excluded the port from any possible development funding from the European Union, such as TEN-T funding. The port is the largest port in Ireland to be excluded from possible European funding. As the only designated commercial port in the west of Ireland and with a catchment area extending from Clare to Donegal and east to the midlands, the need for a proper commercial tier 2 national port in the region is obvious. In addition, Galway city is the third largest urban area in the country, with a commercial port operating since the Middle Ages. Notwithstanding these issues, the port has worked constructively with Galway City Council, the proposed new shareholder, and the Department of Transport, Tourism and Sport in implementing the change of shareholder. It has also been very much involved in its remit under the plan for the provision of marine and leisure facilities.
It is worth mentioning the visit of the Volvo Ocean Race on two occasions, in 2009 and 2012. In 2012 the port of Galway hosted the final leg of the race and was adjudged the best stopover of the race. The economic benefit to Galway was enormous, with more than 500,000 people visiting the event, including 100,000 overseas visitors, and €60.5 million spent, with an input of €6.5 million by local enterprise. We hope to get the race back again. We have strong support in that regard from all local entities. We have bid for the Tall Ships Race for 2018. We are ambitious in that regard.
There are critical issues. With regard to port expansion, there is no provision or safeguard in the Bill to allow for the proposed and ongoing planning application to be brought to fruition. Over €3 million has been spent on the planning process to date, but this is not recognised in the national ports policy. The NPP has identified the tier 1 and tier 2 ports as the lead ports in providing deep-water facilities in the State. The contradiction is that the port of Galway holds permission from the Government to apply for deep-water facilities as part of the port extension. The port requires in-built confirmation that the completion of the project would not be stymied by the new shareholder or the fact that the port is not a tier 1 or tier 2 port.
As I understand it, the port of Galway will continue to be governed by the Harbours Act 1996 and amendments to that Act. Are the amendments fully compatible with the Local Authority Acts? Will the fact that Galway City Council, in its role as shareholder, is governed by the Local Authority Acts have an effect on the port of Galway?
The election of directors is a vital decision making process for a commercial enterprise. What will the process be? Will the chief executive of Galway City Council have the power to appoint directors? Will the council members have an input? Will the Minister for the Environment, Community and Local Government or the Minister for Transport, Tourism and Sport have a veto? The most important question is one of suitability, which is not always the case for the appointment as a director. There is a need for directors with specific skill sets. The process must be open, transparent and accountable. This is particularly true where the executive team is small in number. For example, in the port of Galway the only two executives are Captain Sheridan and myself.
With regard to funding, most people would question the funding for the development of the port, which in phase one will amount to almost €52 million. This has always been a difficult issue and, in terms of approval, a protracted process. What level of decision making, if any, will the new shareholder have in approving funding for the port? More importantly, could it be a dissenting voice? As the funding for the proposed extension of the port of Galway will be dependent on significant borrowings, it is essential that the decision-making principles be clear and unambiguous. Will the shareholder be in a position to grant some form of funding for port development?

This is disallowed under the national ports policy.

It is essential that the non-national ports remain competitive and fit for purpose. Many local exporters and importers require the retention of commercial ports in their areas if they are to continue to trade competitively. Travelling to tier 1 or tier 2 ports would result in prohibitive costs for many port users in the western region. The Bill should not or cannot be allowed to give tier 1 and 2 ports a totally dominant position in the marketplace.

The Port of Galway has ambitions to become a tier 2 port in the short to medium term. There must be a mechanism to allow for a port to be upgraded to a higher level. No such facility has been included in the proposed legislation. This is a very important issue from the point of view of the Port of Galway, particularly if the extension of the harbour proceeds.

I am aware that this matter is covered under other legislation, but the issue relating to the foreshore is a major one for many ports and remains a problem, particularly in a legacy context. There is no mention of this matter in the proposed amendments.

From our perspective, some of the most important people with whom we deal are the members of our staff and we did ask them to contribute their views on the national ports policy. Staff are a vital ingredient in the management and development of any port. The position is no different when it comes to the Port of Galway. We have an excellent and dedicated staff and they articulated their view on the port by saying: "The ports of Regional Significance are just that i.e. significant and they must be allowed to play their part in the ongoing development of regional/economic policies while at the same time protecting the rights of employees."

Regional ports of significance should remain significant contributors and driving forces of the local economies they serve. Any decision or legislation that would reduce the economic influence of these ports should be shelved. Failure to develop the Port of Galway would have a devastating effect on many local industries that ply their trade through the port. The consequence would be a major loss of employment in areas that are already unemployment black-spots and ravaged by emigration. I thank the Chair for his indulgence.

Mr. Simon McKeever:

I thank the Chairman and members for the invitation to come before the committee. I am just going to say a few words before I hand over to Mr. Howard Knott, our director of trade and facilitation, in order to provide a bit of context about our organisation. The Irish Exporters Association, IEA, is a national membership organisation and represents small, one-man operations right up to some of the largest FDI-based companies in Ireland, many of which are engaged in exporting and importing. In addition, there are those companies which import and add value to products for re-exporting them. Many of our members are logistics companies, while others are involved with national infrastructure around exporting, be it the airports, the ports or the rail network. Our view is informed by the way in which the organisation is constructed. We previously made submissions in respect of Competition in the Irish Ports Sector, which was published in 2013 by the Competition Authority, the national ports policy and the scheme of the Bill before the committee. In addition, we have issued a lot of publications in this area. These include our Trade and Transport Analysis.

I will now hand over to Mr. Knott, who is our director of trade facilitation and who is involved in all of our activities in respect of transportation, logistics, ports, harbours, rail, freight and air.

Mr. Howard Knott:

I will outline the IEA's understanding of Ireland's freight logistics problem. The transport-related elements in the distribution of products made in Ireland and consumed elsewhere varies widely and can be up to 40% of the final value of the goods. This is, in part, due to our location as an island off the coast of Europe but also to relatively high domestic freight transport costs. A fairly small, dispersed population makes the achievement of logistics efficiencies more difficult. Food, pharma and an increasing number of other export categories now require low-carbon and product-traceable supply chains. Some of the IEA's activities which are focused on meeting these issues include the establishment and management of world-leading a good distribution practice, training and certification programme, which has been rolled out in recent years and which is currently the subject of a considerable upgrade; the setting up and driving of the IEA Rail Freight Group, which has proved particularly successful in the context of companies in the north-west region; and active participation in EU-backed logistics-focused projects under the Interreg IV, North-West Europe and Atlantic ARC programmes. Within the latter, ports and distribution centres are key to the development of efficient intermodal distribution. As these projects conclude, we will bring much of what we have learned back to Ireland.

I wish to make some general comments on the published general scheme of the Bill. The IEA welcomes the overall shape of the ports policy as announced in 2013 and as given effect to in the draft legislation. Particularly important is the consistency with the European Commission's EU ports policy of 2013. This consistency optimises the potential for Irish ports and the links thereto, both on the land side and the sea side, in securing EU funding assistance. This should also inform Irish road and rail infrastructure development linked to ports. As a result of the fact that they are not considered port companies within the terms of the draft legislation under discussion, both Rosslare Europort and Greenore have not been included in its provisions. These are both vital ports and we ask that they not be forgotten.

While the regional ports are small-volume facilities in the context of the overall picture relating to shipping, they play a vital role in the handling of bulk products such as grain, fertiliser, animal feed, construction materials, steel, paper, reusable waste, etc. During the recession, some of the traffic handled through these smaller ports migrated to their larger counterparts. However, as the 2013 Irish Maritime Development Office, IMDO figures show, major volume increases are now being experienced at the regional ports. As the larger ports become busier, it becomes more convenient to bring certain materials in through the regional ports. The IEA believes that it is of paramount importance to ensure that the planned changes relating to bringing these ports and their port companies under local authority control should not do anything to diminish the potential of any port to develop new shipping traffic or compete with ports that are currently larger.

I will now deal with matters specific to the draft legislation. Part II, head 8 deals with the future transfer of shares. The IEA supports the proposed ministerial involvement in such activity. Part II, head 9 relates to dividend policy. Port cost competitiveness is vital for trade and this dividend requirement should not be allowed to push up prices or reduce investment in the ports concerned. Part II, head 11 covers general ministerial powers and is vital to secure the safety of operation in ports and facilitate logical development. Part III, head 12 deals with the transfer and dissolution of port companies. The IEA is concerned that a port's activities may become lost within the general activities of the local authority concerned and that very specific port management and operation skills will also be lost as a result. Part V, head 19 involves the amendment of section 30 of the principal Act. We broadly support the requirements relating to directors, as set down, but are concerned, particularly in the case of smaller ports, about the prohibition on people who are engaged in work at the port concerned from serving on its board. Part V, head 20, involves the amendment of section 34 of the principal Act. The IEA supports the prohibition on directors serving on port company boards once they are elected to the Oireachtas or the European Parliament.

I thank the committee.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. McKeever and Mr. Knott for their presentation.

Mr. Pat Mangan:

The Chartered Institute of Logistics and Transport welcomes the opportunity to make a presentation to the committee in respect of the general scheme of the Harbours (Amendment) Bill 2014. We also appreciate the earlier invitation we received in the context of making a written submission to the committee.

The institute has no issue of principle with regard to the proposal to transfer a number of regional ports to local authority ownership and control.

The purpose of our written submission to the committee was to air some practical concerns and raise some matters of detail concerning the general scheme.
The regional ports are currently commercial State bodies which have a large degree of commercial freedom and are not subject to the detailed controls on staffing, pay and finances which apply to non-commercial State bodies. The ports being transferred, and particularly those that will remain as independent companies under head 7, should continue to have the commercial freedom afforded to other State commercial companies. The bigger regional ports in particular must be able to compete for business on a level playing field without unnecessary constraints being placed on them and they should be subject to no greater State control than the larger tier 1 and tier 2 ports with which they compete.
The regulatory impact assessment accompanying the general scheme indicates that it has already been agreed that Drogheda, Dún Laoghaire and Galway should continue as port companies in the ownership of the relevant local authorities - that is the head 7 transfer process. If this decision has already been taken - we would support it - the Bill should be amended to explicitly provide for it. We suggest a form of wording in our written submission.
It is not clear which, if any, of the provisions of Part 2 of the Harbours Act 1996 will apply once the port companies are transferred to local authority ownership. These provisions relate to the corporate governance of port companies and cover matters such as the contents of the memorandum and articles of association, the composition of the board, the appointment of the chief executive, borrowing, accounts and audit. The institute is anxious to ensure that the commercial mandate of these companies is protected and enhanced, that they will operate at arm’s length from their local authority owners and that they will be structured and governed in a way that does not act as an impediment to potential future private investment.
It is also important to ensure continuing good corporate governance and effective performance oversight of these companies. For example, section 30 of the Harbours Act 1996 relating to the composition of the board might continue to apply together with the modifications proposed in head 19(2). The power of the board to appoint the chief executive should also be retained. Where port companies are dissolved and absorbed into local authorities, it will also be important that arrangements be put in place to enable port operations to continue on a commercial basis.
Head 11 proposes to give the Minister very wide general powers of direction in respect of 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 - for example, in a direction relating to the development of harbours, or safety, security or navigation. Exchequer financial support is unlikely to be available in those circumstances as there is a long-standing policy of not providing State financial aid to port companies.
The proposed power of direction is a significant policy departure because it will give the Minister for Transport, Tourism and Sport, as distinct from the Minister for the Environment, Community and Local Government, power to issue a direction to a body which is owned by a local authority or to the local authority itself. If the Minister for Transport, Tourism and Sport was to issue a direction at present, he would be doing so as the de factoowner of the port companies and would therefore have a direct concern for the financial or other consequences. However, he will have no such constraint when these companies are in local authority ownership. At a minimum, the head should be amended to require the Minister to consider the potential financial consequences of any proposed direction, to consult with the port company before making a direction and to obtain the consent of the Minister for the Environment, Community and Local Government to any direction he proposes to make.
Head 8 prevents the disposal of shares in a local-authority-owned port without the prior written approval of the Minister. However, there is nothing in the proposed law which would prevent a local authority from deciding to cease the provision of port services. It could, for example, decide to cease the handling of commercial cargo and operate a port as a leisure facility. This could have potential implications for national ports policy. Perhaps the Minister should retain some residual powers in this regard, as the powers of direction under head 11 cannot be used in such circumstances. Subhead (4) states that the Minister's power of direction cannot be exercised in respect of the performance of functions in particular circumstances. The exercise of any residual power should, of course, have to take account of the commercial and financial realities faced by a local authority in reaching a decision on the future of a port.
The proposal to limit directors to a maximum of two terms is unduly restrictive and should be reconsidered. The Minister currently has discretion to appoint directors for a maximum term of five years, but there is nothing to stop the Minister from making appointments for shorter terms, and this is sometimes done for public appointments. There is also a commitment in the national ports policy to the staggering of board appointments to provide for a more managed turnover of directors. This means that, initially at least, some directors will have to be appointed for shorter terms of, say, three or four years. If it is proposed to include limits on the length of service of board members, we strongly suggest that they be expressed in years rather than terms. It is desirable that chairpersons should have served on the board for a period before assuming the chair, and we therefore suggest that any limits imposed on chairpersons should take this into account. The limits should apply to worker directors in the same way as all other board members.
Subhead 19(6) should be much more clearly expressed. It appears from the explanatory notes that it is intended to address potential conflicts of interest for board members and to preclude membership of boards by persons or employees of persons who provided a significant commercial service to a port company within the previous three years. While we support measures to prevent board members with material conflicts of interest from being appointed, the existing provisions in section 11 of the Harbours (Amendment) Act 2009 are ill-conceived and should not be retained in the new legislation. For example, it is generally accepted that 12 months is an appropriate maximum period to preclude former employees from taking up a new employment which involves a material conflict of interest. A similar term would be appropriate for directors. Yet under the existing provisions in the 2009 Act, somebody no longer employed by a company which provided significant commercial services to a port company would be precluded from board membership for three years. Any employee or former employee of a company which provided significant commercial services to a port company would be precluded from board membership even if that person had no direct working relationship with that port company or potentially even if he or she worked in another jurisdiction. It is also significant that one could have port users that are very significant players but there is no restriction on, for example, somebody who provides 20% or 30% of the trade of a particular port from being involved in the directorship, so I think the provisions relating to a conflict of interest need to be rethought.
We suggest that a more appropriate approach be adopted which relates directly to the individual being considered for appointment to the board. The test should be whether the person being considered for appointment has or could be perceived to have a material conflict of interest if appointed to the board. This is a more appropriate test and will avoid the unnecessary exclusion of persons well qualified to serve on the board.
The regulatory impact assessment gives no real consideration to the financial circumstances of both the port companies to be transferred and the local authorities to which they are to be transferred. Will the ports be a financial burden on the local authorities? Have the local authorities the capacity to provide or generate from other sources any investment finance that might be required for the future development of these ports or to cover pre-existing deficits? This is particularly important since it is Government policy not to provide funding to commercial ports and because the ports to be transferred may not be in sufficiently robust financial health to generate the necessary investment finance from internal resources alone. It is noteworthy from appendix A of the regulatory impact assessment that four of the five ports to be transferred incurred net losses in recent years.
The ministerial statement accompanying the publication of the draft general scheme stated that the Bill would not affect Rosslare Europort as it is not subject to the Harbours Acts. 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. The joint committee might explore with the Department what, if any, conclusions have been reached in respect of the future ownership and development of Rosslare Europort.
Do any of the recommendations of the Competition Authority's recent study of competition in the ports sector require a legislative response? For example, recommendation 4 of that study suggests that the Department of Transport, Tourism and Sport "should mandate the promotion of effective intra-port competition as a key objective for port authorities that is imposed by legislation or regulation as appropriate". How is it proposed to give effect to this recommendation?
Some other more detailed points are raised in our written submission, but I do not propose to comment on them here, although I will be happy to answer any questions in respect of them or any aspect of my oral presentation.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Mangan. I will now go straight to members. I know there are many other Deputies here who want to contribute as well. We will hear from the spokespersons first and take everyone else in groups.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will just make a few comments. My colleague Deputy Ó Cuív has some specific questions. I thank the witnesses for their presentations. It is helpful to us in terms of the work we do to take a feed-in from the witnesses who are stakeholders and who have a direct interest in-----

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would be better if we kept to the spokespersons, and then I will let everybody in. I have no worries about that. Nobody will be restricted.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is my intention as spokesperson for Fianna Fáil to take the information the witnesses have given us on board and use it to assist me in drafting amendments to the legislation when it ultimately arrives, if the position that the witnesses have outlined is not taken on board either by the Minister or by the Department, and to use that as an iterative process in the passage of the Bill.

All of those who have contributed have raised issues of concern, some relating to overall policy and some technically detailed as to the impact of this Bill if the changes outlined are not made. I welcome that and look forward to working with the delegates over the next number of months as the Bill progresses through the House.

Patrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank those who contributed on this for their attendance. I will be parochial in regard to my response to some of the comments made. In my view, the counties of Kerry, Clare and Limerick are very much in the west of Ireland and anybody who suggests their location has changed should look again at their geography. The Shannon Foynes Port Company in my constituency is a tier one port of national importance.

I direct my comments now at the suggestion from the Galway people here that existing policy may be against what they are trying to achieve. I looked at the annual report of the Galway Harbour Company before coming to this meeting and noted it had a total income last year of €3.19 million. Over half of that income was derived from non-port activities. Some €1.1 million came from rental income and €845,000 came from car parking charges. The contrast between what the Galway Harbour Company suggests and what is happening in the west further down the coast, in Shannon Foynes, could not be more stark.

Shannon Foynes Port Company handles approximately 10 million tonnes of cargo per year, approximately 15% of our national tonnage. Galway Harbour Company accounts for only 1% of national tonnage, with just under 500,000 tonnes. Shannon Foynes Port Company is open 364 days a year and has no difficulties in regard to berthing. It can berth ships of over 200 m with 10.5 m of draught. It is the deepest port in the country and does not have the constraints the Galway Harbour Company has. It is for that reason it has been designated a tier one port.

It is correct that there will be issues in regard to attracting investment into Galway. The main reason for difficulties with attracting investment into a second port in the west is that the facilities envisaged are already available in the west. We will have three ports of strategic national importance, one in the east, one in the south and one in the west. A motorway is under construction between Limerick and Galway and a report is currently being commissioned by the NRA to upgrade the N69 into Foynes. CIE has also already done some work in regard to reopening the railway line into Foynes.

I looked at the Galway Harbour Company prospectus for years one to five in the development of Galway harbour and much of the work envisaged there has already been done 40 miles down the road in Limerick, Foynes, Shannon, Tarbert and Moneypoint. I cannot understand why there is difficulty in accepting the Government's policy in regard to the tier status of Galway port, given it handles only 1% of the national tonnage and has 13 people working there on an average salary of €90,000 a year. I feel the biggest hindrance Galway Harbour Company faces in regard to the development of its plans is dredging. It will have to put considerable capital investment into dredging and this will require significant outside investment. This can come from the State or A.N. other, but the State has already made its position clear.

Would Galway City and County Councils be averse to joining Limerick City and County Councils and Clare County Council with a view to establishing a clear transportation hub on the Shannon estuary akin to what has been done at Shannon Airport? We cannot have international airports at every crossroads and by the same token the size of the country places a limit on the number of ports of strategic national importance we can have, particularly in view of the investment required. This is unnecessary when there is a port 40 miles down the road that already deals with significant tonnage. Some of the largest ships in the world currently sail into Moneypoint, Foynes and Aughinish Island.

The Galway Harbour Company plan is very ambitious, but it bears no resemblance to what the Government is trying to achieve in its ports policy. Rather, it flies in the face of that policy. There is a reluctance to accept the fact that Galway has just 1% of the national tonnage and less than 50% of its income, €1.29 million, is derived from port activity. Instead, it believes it is in the wrong tier. I find that difficult to accept.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Deputy O'Donovan has certainly been upfront. He said he would be parochial and he has been.

Patrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When I saw all the other tribesmen arriving, I felt I should.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure there will be other views and that is what this discussion is about. We will take comments from Deputy Ellis and then allow those who made presentations to respond.

Dessie Ellis (Dublin North West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I thank everyone for their presentations and I wish to comment on some of the issues raised. One of the major fears in regard to the Bill relates to the transfer of powers to the local authorities and the effect this will have on the boards in terms of decision making and who makes the decisions. Can we have further elaboration on those fears?

I understand every port cannot be a tier one port, but while each port has ambitions, they all have limitations. If Dún Laoghaire-Rathdown County Council could extend its limits, this would open more options, such as cruise businesses or similar. Will funding be available for development and where will it come from? Perhaps the different ports could submit some sort of business plan that would indicate to us how they would like to see their ports expand. Otherwise it is difficult to envisage any development. I understand they are at a disadvantage because the TEN-T funding applies to the larger ports and lower tier ports are excluded from that funding. Will the delegates comment on that? I would appreciate a response on these issues.

In terms of expansion, Galway seems to be limited in the context of the overall hours in which it can operate. How can that be improved? The delegates mentioned the enterprise park in Galway. Is it planned to expand that further?

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There has been significant focus on Galway so perhaps Mr. Bradshaw would like to comment.

Mr. Eamon Bradshaw:

I am not a politician, so do not have to win votes.

Patrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Chairman, can I ask for that comment to be withdrawn because of the suggestion behind it?

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The comment has been heard.

Patrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If it is not withdrawn, I take offence at it.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That can be noted.

Brian Walsh (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

A lot of offence has been taken around the table this morning, but we should keep going.

Mr. Eamon Bradshaw:

I will withdraw that comment. I did not intend any disrespect to Deputy O'Donovan.

During my presentation I did not mention Shannon Foynes at any stage. I admire Shannon Foynes for what it does, have good friends there and support them. We hope Shannon Foynes develops further and this has generally been our way within the port sector up to recent times.

Shannon Foynes is in Munster, not Connacht. It is not on the west coast, but on the south-west coast. It is a long way from Shannon Foynes to Donegal, to north Mayo or to Sligo.

It is not 40 miles from Galway to Shannon Foynes Port Company. It is quite a way down the road so to say that is incorrect.

There are important issues to be addressed. We are a very positive port in terms of what we are trying to achieve. The rail link into Shannon Foynes is not open. The rail link into Galway Port is open. There is a road network into Galway; there is not a road network into Shannon Foynes. I am not being negative about Shannon Foynes. I do not have anything against Shannon Foynes; I support it in everything it tries to do. However, in terms of what we have tried to achieve, mention was made of car parking and rental income but if members look deeper into our accounts they will see that much of that rental income comes from our customers who are based in our enterprise park. The statement that the vast majority of the 500 people who work in the enterprise park work in companies that bring their products in and out through the port and are related to the port is incorrect.

Members will see from the figures in recent years that we have moved our import and export turnover back to in excess of what would be classified as non-core income. The Port of Galway has existed since medieval times. If Deputy O'Donovan could confirm to me that he could run any business that would open for four hours per day, I would like to hear it. It cannot happen. We are restricted to a tonnage of 7,000 tonnes. Fewer ships of that size are being built. Our customers are asking us to provide bigger ships to allow them bring their products into Galway. Many of our customers could not move their business to any other port because the actual cost of transferring it to other ports would mean the business would not be viable, the exports would not take place and employment would suffer as a result.

There are many reasons we need a port extension in Galway. We are working with the national ports policy in that we have 32 acres of inner city land which, in our view, should be developed for what is requested in the ports policy statement, that is, development of the tourist trade. In the past 12 months, we have produced many reports in terms of cost-benefit analysis and so forth - funding strategy documents - that clearly indicate it is a viable proposition. That has been accepted in terms of the cost-benefit analysis incorporating the west of Ireland. The west is a very large area to cover. It is far removed from Shannon Foynes and it should, and will in due course, have a port of which it can be truly proud.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does anyone else wish to comment on any of the questions?

Mr. Brian Sheridan:

If I may, I will add to some of the points made by Mr. Bradshaw. On the reference to dredging, Galway is probably the most fortuitous port in the country in that our dredging requirements are on a cycle of every 12 to 14 years. Many of the other ports, for example, Waterford, would have to dredge the equivalent of every year that we do on a 12 to 14 year cycle. Dredging, therefore, is not an issue in Galway.

It was mentioned that from a petroleum perspective Galway is a port of national strategic importance and that during the extreme weather conditions in the winter of 2010, Galway was the stand-by port for the capital. Many of the oil tankers were rerouted to Galway to provide fuel to keep the capital energised and functioning during that period.

As Mr. Bradshaw mentioned, the Volvo Ocean Race in 2009 delivered €55 million into the city and the region, and again in 2012. To do that we had to close the port, with the agreement and support of our customers. That was a huge ask, but we did it. During the darkest hour of Ireland's history in terms of the financial mess we were in, the Volvo Ocean Race in 2009 lifted the spirits of the nation. That would not have happened were it not for the ambition of the port company and the volunteer army behind it that had the ambition to take on an event like the ocean race. The largest sporting event in 2012 was the London Olympics, the second was the European Cup Final in Kiev, and the third was the Volvo Ocean Race in Galway. As Mr. Bradshaw pointed out, we are a very small executive but we dare to dream, and we believe we are on the right path in putting forward this extension.

Ms Philomena Poole:

I want to address the issues raised by Deputy Ellis, one of which related to fears people may have about the issue. I refer specifically to Dún Laoghaire. We have a very good working relationship with the port and have been involved over time in the development of the cruise initiative. Members would be aware that the port has evolved over a long period through many different models. The transition group we have established is working in conjunction with members from our organisation and from the port company to go through some of the issues that might emerge over time. That is building on the good relationship with the port, and therefore any fears that might arise would be more than addressed as part of that process.

As a local authority, we would be very anxious that there would be clarity in the legislation. That is our main area of concern, particularly regarding executive and reserved functions, in that it would be apparent which areas fall into which of those functions.

On the extension of the limits, that is very much about attracting a particular size of ship into Ireland and ensuring that the cruise business is not lost to the country. I will ask my colleague, Richard Shakespeare, to address some of the concerns the Deputy raised about the business models and what might happen about that because he has done a considerable amount of work on it.

Mr. Richard Shakespeare:

We established a cruise stakeholders group made up of all local stakeholders - the council, business leaders and the harbour - and we have been investigating this over the past five or six years to the point where next year we will have 24 cruise calls of large vessels into Dún Laoghaire, most of which cannot fit into Dublin Port and need to anchor in the bay in Dún Laoghaire.

The reason for the extension of the limits is that there is a duplication of work going on between Dublin Port and the Harbour Master in Dún Laoghaire in that both are monitoring the same vessel. We anticipate 24 cruise calls next year when in excess of 100,000 passengers and crew will come ashore through Dún Laoghaire. Some of them will stay in Dún Laoghaire but it is a regional benefit. We are trying to proof the business case we have been working on and the economic model to see if it can sustain the development of a cruise berth.

Mr. Howard Knott:

I will respond to some of the issues raised by Deputy Ellis. The issue of the freedom and ability of a port company to operate in a fully commercial manner is probably the greatest concern the Irish Exporters Association, IEA, brings to this meeting. It may be an over simplistic way of putting it but when one is within a local or national authority or, even worse, a European authority, making decisions can take time. If one is in a private commercial company, however, making decisions can be done quickly in response to the needs as perceived. It is critical that nothing is done in the act, whether intentionally or unintentionally, that would result in the people operating any one of the ports we are discussing feeling frustrated in their ability to generate more business for their community or the businesses operating in that community.

The critical issue is to have clear lines of attack to allow the company to operate in a commercial manner, subject to the discipline of working within its community, as identified by the local authority.

I propose to refer to some of the constraints that have been included in the Bill. Those who are not professional politicians can become a little mystified when reading legislation.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

Legislation can be mystifying for us as well.

Mr. Howard Knott:

It appears that considerable thought has been given to the issue of ensuring that port companies will have the ability to operate ports in a commercial manner, subject to constraints that will prevent them from going lunatic in their efforts to be commercial.

Noel Harrington (Cork South West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses for their presentations. It has been interesting to note the different perspectives on the heads of the Bill and the impact the proposals could have on the areas in which the witnesses or their organisations operate. The Bill does not reinvent the wheel. Under the Harbours Acts of 1946, which will be repealed by the legislation, and 1996, some 13 regional harbours transferred to local authorities. The closest port to me, which is in Bantry Bay, recently transferred to the Port of Cork. Have representatives of Dún-Laoghaire-Rathdown County Council met their counterparts in the local authorities that assumed control of these 13 harbours to discuss technical issues, funding, corporate governance, etc.? Such an approach could serve as a useful, if minor, guide to the potential impact of the Bill.

I have read the regulatory impact assessment. The latest figures show that Dún-Laoghaire-Rathdown County Council incurred a significant net loss in 2012, having recorded a profit in 2010 and a smaller loss in 2011. Is the council concerned that this trend may continue and, if so, how will it be addressed?

Export companies, as the customers and users of the port companies, are very important. They have an interest in how the ports operate in terms of efficiency, competition and their bottom line. Are Mr. McKeever and Mr. Mangan concerned that the proposed realignment of the ports will have a negative impact in terms of decreasing inter-port and intra-port competition? If a port is not competitive, it will not be used by importers and exporters. Has an assessment been done in this regard or are exporters waiting to see how the proposals are implemented?

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does anyone wish to comment?

Mr. Howard Knott:

While I would not dare jump ahead of Dún Laoghaire-Rathdown County Council, I would like to address the Deputy's final point on the possibility that competitiveness issues will arise. A significant number of ports were transferred into local authority control under previous legislation. While I am not an expert on fisheries, fishery ports such as Killybegs and Castletownbere operate under a slightly different model from other ports, one which involves the Department of Agriculture, Food and the Marine. In general terms, what we have heard from those involved in exports is that the ports that transferred have functioned well because they are small ports serving their local communities and doing what they have always done. These ports have not appeared on the national radar to any significant degree. Apart from locals and those involved in sailing, most people will not be aware of Clogherhead, Annagassan and similar ports.

This legislation deals with chunky and substantial ports such as Drogheda, Dún Laoghaire, New Ross and Galway. While these are small ports in the greater scale of things, if one strips out the large cargo items from some of the larger ports, for example, the ore that moves through Shannon-Foynes Port and the oil that moves in and out of Dublin and Cork ports, especially the latter, one finds that the difference between many of the larger and smaller ports in terms of the general cargo they carry is not significant.

None of the ports with which we are concerned currently have car or freight ferries running, nor do they have container vessels carrying containers in and out. One needs to have a serious throughput for these types of activity and the tier 1 and 2 ports can handle these types of traffic. There is, however, a substantial amount of traffic related to the agriculture and construction sectors for which local ports are vital. While it may not be appropriate to make this point, the domestic waste issues that have arisen in recent years, specifically the need to avoid landfill, mean that considerable amounts of waste have been exported for use as fuel, particularly to the Baltic countries. The use of smaller ports for this purpose has provided a great boost to the business of some of them. However, this development also highlights one of the dangers in this discussion, namely, that this traffic may only go through a port if the local authority grants it a licence to do so. As a result of the legislation, the port owner and licensing authority will become very close. It is important, therefore, to create a Chinese wall between a local authority's port activities and its other activities.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask Ms Poole to respond to the questions relating to Dún Laoghaire-Rathdown County Council.

Ms Philomena Poole:

Two specific issues were raised, the first of which related to whether discussions had taken place with other ports. We have not had any direct discussions with the ports in question, which are much smaller than Dún Laoghaire Port. Our discussions have primarily been with the Department, which in turn has an awareness of the other ports.

On the question about any concerns we may have, the due diligence exercise being carried out by the transition group will throw up any issues about which one might have had a concern. It will also look both forwards and backwards in terms of what these could be. The considerable decline in income to which Deputy Harrington refers is, in large part, a result of the reduction in activity around the Stena Line. However, the emerging business models give rise to considerable optimism concerning the way in which the port operates and its benefits to the town.

Mr. Pat Mangan:

The earlier transfer of 13 harbours to local authority control does not provide much of a precedent. As has been noted, the ports in question are much smaller than the ports to be transferred under the Bill, which are significant bulk ports and important niche players in areas such as petroleum. Dún Laoghaire, for example, is an important ferry port. Given the difference in scale, it is unlikely that the earlier transfers will not serve as a useful guide.

Deputies Harrington and Ellis asked whether we have any concerns about the effect of the proposals on the ports.

Our concern is that they are able to act in the same way as any other commercial State body. That is particularly the case where they are competing with what I call the big beasts. The tier one ports, which are very significant players, have stronger balance sheets. They need to be able to compete on a level playing field. The concern might be that if they are treated differently as regards governance and the rules that apply to them, they may well be going out with one hand or even two hands tied behind their backs in terms of being able to compete in a very challenging market. That is our primary concern and the concern I have about negative impact on port competition. It might leave them in a position where they are not playing on a level playing field because they are subject to a different set of rules. I see no reason, if they are in a commercial business, they should be treated any differently from other ports that are in that same business.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will take non-members of the committee in the following order: Deputy Walsh, Deputy Kyne, Deputy Boyd Barrett and Deputy Ó Cuív.

Brian Walsh (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses' for their valuable contributions. I am not a member of this committee having been removed from it last year following a disagreement with my party although I hope to be reinstated shortly. I hope that many of the suggestions that have been put forward and issues raised will be taken on board when we are framing this Bill. I am disappointed that my colleague, Deputy Patrick O'Donovan has departed but I have no doubt we will discuss this issue with him in greater detail at a later stage. Much of what he has expressed today articulated concerns raised by the board of Shannon Foynes. I would remind Deputy O'Donovan that it is not so long ago that representatives of Shannon Foynes was before this very committee answering questions about management decisions, practices and corporate governance. It appears that Shannon Foynes may feel threatened by the development of Galway port.

I welcome the ambitious proposals to develop the facilities of Galway Harbour Company. This development is much needed and although Galway Harbour Company only provides for a small percentage of the national tonnage it does play a very valuable role in the economy of the city and region from Galway across Connacht to Connemara and up as far as Mayo. I had the pleasure of spending a weekend in Galway with some of the largest cruise line operators in the world who had been invited over by the harbour company. Some of the largest ones were based in Miami, companies like Crystal Cruises and Royal Caribbean. They spent several days in Clare, Galway city, Connemara and Westport, and they were simply blown away by what they experienced. They were actually competing with one another to support and contribute financially to the development of the harbour in Galway.

The Taoiseach is on record as having stated his support for the development of Galway harbour. It is a pity that this has become a matter of Shannon Foynes versus Galway because that is not the purpose of the exercise, as my opening remarks indicated. I note that Shannon Foynes has plans to develop its facilities by 2041. Many of the people in this committee room will not be around in 2041 and just because Shannon Foynes lacks ambition does not mean that development should be stifled or that we should all stand and wait, or that Galway harbour should not be ambitious.

I welcome the proposal and applaud its ambition and vision. A mechanism within the Bill for progression between the various tiers was discussed and that should be taken on board if this committee is to make recommendations to the Department on the legislaton.

Seán Kyne (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am not a member of the committee either but I am a former director of Galway Harbour Company. I spent a number of years as a member of Galway County Council. Like Deputy Walsh I fully support the plans for the redevelopment of Galway harbour and have made a submission to that effect to An Bord Pleanála. It is regrettable that Deputy O'Donovan chose to leave the meeting. Getting parochial is fine and he is fully entitled to support his local port of Shannon Foynes but I always believe that to promote oneself one does not have to attack somebody else and he tried to do a hatchet job on Galway. I agree with my colleague that he must be concerned about Galway getting planning approval or perhaps he is acting on behalf of Shannon Foynes in that they are concerned that the Galway expansion would go ahead.

I addressed the Merchant Shipping Bill in the Dáil last week, when I invited the new Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, to come to Galway to see the plans. He indicated that he would be happy to do so and I presume that can be arranged with the witnesses. The Galway Harbour Company has been hindered by its current gates. The potential of this development for the port is astronomical, not just in increased shipping but also in the tourism sector and the cruise liners. Other ports could not compete with that because Galway port is at the heart of the city. It is within walking distance or a very short bus journey from Eyre Square for tourists. We have seen many tourism initiatives in recent years such as the Wild Atlantic Way and similar. The captain spoke about the Volvo ocean race which was a huge success. Part of that success was due to the fact that the port is at the heart of the city. It would not have worked if the port was 50 miles away. People within the city could come out and experience the Volvo ocean race.

Will port policy hinder planning permission or, if secure planning permission is secured, will this strengthen the case for having the port policy changed? Will the envisaged co-operation with Galway City Council help in terms of redevelopment of the inner dock, which has great tourism potential? Is the funding dependent on a move to tier 2 or are there any alternatives? If tiers 1 to 3, inclusive, are not used as criteria, what should be used? Mr. Bradshaw referred on the change of status to a mechanism to allow for the port to be upgraded to a higher level and pointed out that no such facility is included in the proposed legislation. On what basis or according to what criteria might this be allowed? Should it be based on expansion plans, for example? There has to be something to go to Government with and expansion plans would be one possibility. I reiterate my support for the plans. It is hugely important for Galway city and the surrounding areas that this plan goes ahead. I am confident that it can.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

I will be somewhat parochial as well, not in a hostile way to other ports, but just because Dún Laoghaire harbour is what I know about. Some of the issues are also of more general resonance. I very much welcome the move to put these ports under local authority control, certainly in Dún Laoghaire's case it is something I have urged for a while. It was very unclear what the harbour's objective was, and putting it under local authority control clarifies somewhat what we see as its objective. However I still have a lot of questions and I am interested to hear what people have to say.

For example, the Minister has indicated that a choice confronts us when we move a port under local authority control, in that it should either be fully under local authority control or be a corporate subsidiary. Some speakers have suggested that it should be the corporate subsidiary model with a strong commercial focus. I will be honest, in that I do not favour that option, although I would like to hear the witnesses' responses. The point of claiming a port is of regional significance is that it is an important part of our regional infrastructure. As such, to judge or run it on the basis of a narrow commercial mandate instead of recognising that its contribution is of regional significance to its town and region is to miss the point. This port will make a contribution to Dún Laoghaire and all of the region - the situation elsewhere is similar - that cannot be quantified on the company's balance sheets. If we do not understand this, we are missing the point. This is how to get the balance.

This brings me to the issue of governance structures, in which regard I am particularly interested in hearing what the Dún Laoghaire delegation has to say. The overwhelming feeling in Dún Laoghaire is that the Dún Laoghaire Harbour Company has been a law unto itself and is insulated from the local community's opinions on what is the right way to develop the harbour so that it might complement and contribute to the town and local area. It has managed to alienate its own workforce spectacularly to the point of there being legal cases, industrial relations issues, etc. What does the council have to say about this matter? What will be the workers' status? Some protection has been afforded to those who are subject to previous terms and conditions under the Harbours Act, but will new employees be treated as council employees? The council has asked questions about whether its elected members or executive will be in charge. The Minister will have considerable powers under Part II's head 11, in that he can issue directions. Will the show be run by the council's executive or elected members or can it all be overridden by ministerial directive? We need clarity and more democratic control, that is, a greater emphasis on elected members, public participation and people with expertise in the various fields in which the harbour operates. All of these harbours seem to operate a balance of different interests. They are working harbours, amenity harbours and, in many cases, heritage harbours, to name just three of the legs on which they stand. We need experts in these areas as well as people who are accountable to and heedful of the local community in terms of how they balance these aspects and pursue objectives.

In Dún Laoghaire's case, many bad mistakes have been made in this regard. The terminal on the Carlisle pier, including a train station that was of historic significance for the entire country because it was one of the main exit points of the diaspora, was knocked down. This was a disastrous decision. If I remember correctly, there was not even permission to knock it down. There is a major controversy surrounding the plan to put a floating swimming pool off the east pier. There is no public mandate for that. How many master plans have we had for the Dún Laoghaire Harbour Company? We have had plans for ten-storey apartment blocks on the Carlisle pier and new housing developments in the harbour. None of these has come to anything, yet they have wasted hundreds of thousands of euro.

Will we have a governance structure that genuinely listens to the local community and regional interests and is sensitive to the regional and local importance of the harbour instead of a structure that is a law unto itself and has a narrow commercial mandate? If the company is seen in the latter terms, it will not be able to sustain itself. This belief is borne out by the fact that the company is making a loss. We must understand the situation in a different context if we are to make it work.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The witnesses will be glad to hear that all of the Galway Deputies aread idemon the importance of Galway Harbour. We do not seem to be facing the difficulties experienced in Dún Laoghaire.
I become worried when the policies being developed are based on the status quo. It happened during our time in government and is happening again, in that policies are not drafted based on an objective analysis of balanced regional development, but to preserve and confirm the status quo. The problem is that, if one continues doing this, one doubles one problems. Dublin cannot handle everyone who is trying to live there. All of the jobs are in Dublin, but there are not enough housing or services. Other parts of the country could do with having extra people but are not getting any because they are not seeing development. We should be serious about balanced regional development and not base the future on historical events.
Due to the port gates and the fact that it is tidal, Galway Harbour cannot operate to the same capacity as a modern port. These are physical constraints. It is like having a large factory into which only tiny vans are allowed because its gates are not wide enough to take an articulated lorry. Obviously, one should widen the gates immediately to bring in the big trucks. Therefore, the port needs to be developed physically.
Interestingly, Killybegs is a fishing port, yet it is receiving cruise liners. We should not always limit initiatives to a predetermined Government plan for the future. Everyone accepts that human endeavour can often overcome considerable adversity and engender great success despite the prognoses of the Jonahs around the place.
Deputy O'Donovan's comments were interesting and left me pondering the Chairman. This is the same argument that we heard about Knock Airport, namely, that Knock and Shannon could not survive. However, Knock Airport has taught many people lessons in efficiency. If one is hungry enough and serves a large enough area, even if its population is dispersed, one can survive.
We should consider Galway Harbour's strengths. When the port is developed, one will be able to walk off a boat into the city centre. When we were considering this plan five or seven years ago, that aspect was a major attraction, as no one coming off a cruise liner would need to be bussed anywhere to access the city. Due to this factor and the attractiveness of Galway city centre, the port will be a magnet for cruise liners.
It has been interesting to note the hungry timber mills in the west importing timber through Galway and exporting timber that they cannot use. The port is exporting lime from Cong, County Mayo, to Scotland. This is an interesting case and works because there is not much lime in Scotland and bringing it from England by truck would cost more.
Many possibilities have been mentioned, but there is a common denominator - to use my comparison, if one cannot bring a truck in and is confined to using a mini-bus, one cannot get the business.

In my view, two competitive ports in the west of Ireland would only add to each other. We are always of the view in the west that if somebody gets something, somebody else cannot get it. We do not say, "Hang on, let us look logically at this. Let us look at the size of the area we are talking about." The length of a straight line up the west coast - I am not talking about all the indentation - from north Donegal to the south coast is one and a half times the length of the east coast. That is a fact. I was looking at distances by road. It is 169 km from Belfast to Dublin; 154 km from Dublin to Rosslare; 117 km from Rosslare to Waterford; 120 km from Waterford to Cork; 107 km from Cork to Foynes and 131 km from Foynes to Galway, which is longer than Waterford to Cork, Cork to Foynes or Rosslare to Waterford. It is 273 km from Galway to Derry, which is the next nearest port up the west coast. If one eliminates Foynes to Galway, one is talking about 400 km to Derry. We need a port on the west coast and Galway is the major city there.
Unfortunately, I cannot wait for the reply, in which I am very interested, as we have another bit of business that we are all being called to from Galway. Galway is very busy today. As Deputy Kyne said, the major point is that some of the issues are policy ones, including whether Galway should be a potential tier 2 port. I understand it is a policy to get EU grants for the development of the port. Those are policy issues as opposed to legislative ones.
My next issue is what proposals there are in the legislation that will be inimical to the interests of Galway. Do the witnesses think it is a good idea to transfer Galway from a semi-State company under the Department of Transport, Tourism and Sport to being a body under the control of the local authority? If they do, why do they think that when nobody is suggesting transferring the other major ports to local authority ownership? It seems to me that in making the decision the Government is of the view that there is no future for local authorities except to do small things and the big future is for the few remaining ports which will all be on the south west to east coast. I would be interested to hear whether the witnesses think the transfer is a good idea. If it is not, we should hear that from them.
I often remember that many years ago we were handling about 20,000 tonnes of timber under the ECC, with which the witnesses will be familiar. I remember the forestry people saying that 30,000 tonnes was too ambitious. They wanted at that time to preserve the status quo. The view was that the guys who were there were fine, but no one should be allowed in to compete. That mill is now at 300,000 tonnes. We are getting timber. It is not right, therefore, to allow a policy to develop to preserve a status quowhich seems never to see that there is potential and energy there that will defy all the odds and be highly successful if a level playing pitch is created. If we do not have that belief, we will never develop the country in a fair, balanced way for the good of both the east and west coasts. The way we are developing will lead to so much weight on the east coast that it will fall into the Irish Sea eventually. Everything is being pulled to this side of the country. As someone who grew up in Dublin and who has a great love for this city, I note that many of the amenities I knew in the city growing up have been destroyed by overly rapid expansion out into some of the fantastic recreation areas that used to exist beyond Stillorgan. Those places are now all brick, mortar and tar. It would have been better for Ireland if we had more balanced development and we should not pull back from it now.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Many points were made there, mainly directed at Dún Laoghaire-Rathdown and Galway.

Ms Philomena Poole:

To look back to 2013 when the ports policy was first mooted, at that time there was a call for comment from a number of bodies. Dún Laoghaire-Rathdown County Council was one of the bodies which made a submission. In common with the other local authorities with ports, we stated that it should be a separate legal entity for a number of reasons. It would avoid any TUPE or HR issues and it was also good to retain a commercial focus, particularly in relation to the cruise business and the town as a developing town and, indeed, the region. As such, being a separate entity, the employees will not transfer to the local authority and will remain as part of the board's responsibility. The due diligence process which is about to be initiated and which will be done through the transition group is the mechanism for declaring any issues that may come up whether of a commercial, financial or legal nature. They will have to be addressed either prior to the mechanism for taking over or there will have to be a mechanism to address them in the future. They cannot just be exposed and left there if there are any. Whichever mechanism is chosen, whether it is a reserved or executive function, we would simply say as a local authority that there needs to be clarity. We need to not be caught in ambiguity when there are very significant decisions to be made in relation to the port. That would just be our call that there be clarity about whether they are executive or reserved functions.

Mr. Eamon Bradshaw:

Deputy Ellis asked a few questions before he left including whether the enterprise park would be doubled with the new port. It would and a further 500 jobs are envisaged in that respect. The Port of Galway has a regional focus and very little of the produce going through the port - approximately 600,000 tonnes - comes from the city itself. The majority of the produce comes from outlying areas, including Mayo and County Galway in particular. The funding of a port of regional significance is much more difficult than funding a tier 1 or tier 2 port. The reasons are obvious. Investors will be much more attracted to investing into ports which carry much larger volumes. They will see the potential there. In our case, what we have decided to do is get our planning permission at which stage we will have a product we can offer. We have gone through significant research and the production of various funding strategy documents to demonstrate that we can fund the development of the port and we are comfortable that it can be achieved.

Governance issues were raised. Clarity is vital when one is running a commercial entity. It is vital from the point of view of the port of Galway that we are clear where responsibilities lie and who are the decision makers. Is it within the local authority? Is it within the executive of the local authority or does it rest with the councillors? That is very important from our point of view. Clarity on governance issues is vital to the running of a commercial entity in a very difficult environment.

Mr. Pat Mangan:

I would like to comment on Deputy Boyd Barrett's earlier remarks.

I agree wholeheartedly with him that a port and a harbour involves much more than the shipping of goods. It is an amenity facility and often a very important part of the heritage. Dún Laoghaire is a very good example of that and it is important that the transfer to local authorities allows the opportunity to consider the development of the port area in a much more holistic way than might have been possible to date, given that there have been separate entities.

Nonetheless, my concern is in regard to ports, shipping, transport and so on. If these ports are not able to operate commercially in that part of their business, they will simply sink without trace. As I said earlier, they are competing with big beasts who have much deeper pockets and are becoming increasingly dominant in the market, and they must be enabled to compete in that market. That is not to take away from the other functions they have and finding ways of carrying out those functions but, ultimately, they start off as a harbour that moves goods through and back. If they are not able to do that competitively, and if they are not able to offer the services that are required by shippers and freight forwarders, they will disappear. That has to be one of the factors. The challenge for the local authorities is how to develop all the aspects of a harbour while ensuring they continue to operate commercially as transport entities.

Mr. Howard Knott:

I will deal with some of the remaining points. One of the useful items in the draft is the facility where a particular business opportunity arises and with that opportunity comes the potential of investment by a third party to facilitate it. The new port companies operating within the council can consider that opportunity, so it can become part of the port going forward. This would allow the smaller regional ports, which will not be single-business focused but will probably be focused on a relatively small number of businesses, to become real specialists in a particular area. The history of a great number of ports outside Ireland is that they become experts in handling, say, equipment for wind farms, which is outside the normal run of things. Why not get the wind farm people to put in the money? I would not get hung up on the point that if a regional port is in this new environment, it is necessarily totally unable to secure funding.

Another issue arises from the various comments around the table. One of the things we mentioned in our submission is that the IEA has become involved over the years in a number of EU-supported logistics-focused projects, whether that is west-east across Europe or along the Atlantic arc. In doing so, one interacts with people from ports elsewhere. It is instructive that the European model supports can be quite different from what we have in Ireland, and the Irish model can be quite different from what they have in Britain. Before the Bill is finalised, it probably behoves the powers that be to consider whether we are missing something here. For example, are we looking at the way municipal governance operates in a port like Rotterdam? While that may sound ridiculous, governance there is very much controlled by and under the authority of the local government. It is not necessarily only a small issue.

Deputy Ó Cuív mentioned the dangers of the focus on Dublin and this is something we would like to come back to in due course. There is a consultation process ongoing under the Department of Transport, Tourism and Sport at the moment about infrastructure investment for transport over the next 40 years. On a fairly quick reading of that, it would seem it has a very strong focus towards transport to and from Dublin and less of a focus on transport elsewhere. If these regional ports, about which we are all concerned, are to really thrive, they must have good road and rail infrastructure into those ports so they can serve their communities.

We must ensure that we treat the ports discussion on an all-island basis. The ports of Northern Ireland are just as important to Irish exporters and importers as those that are domiciled in the republic. Again, the lessons of the ports there should be taken on board.

On a point that addresses some of the issues raised in the ports policy document, there is a provision that the Irish Maritime Development Office, which is now related to the Department of Transport, Tourism and Sport, should have an oversight function regarding the competitiveness of each and every port and how they are doing in an international league table. This is very important and might answer some of the worries.

Mr. Brian Sheridan:

It is worth noting what is the definition of a port. A port is no different from a motorway in that it is a piece of infrastructure that facilitates the movement of goods and people. In the Galway case, it is an infrastructural deficit which makes up the shortfall in that the port has outgrown itself. Given its medieval harbour, the points raised by Deputy Boyd Barrett about heritage ports might offer new opportunities for Galway.

I believe there is too much emphasis and a bit of a hang-up on the strength of the balance sheet of the port companies when we look at these issues. In fact, it is the economic benefit that it brings to the region. Not all ports are profitable. For example, the port of Miami is propped up to the tune of €9 million each year by the city of Miami because of the benefit the 4 million passengers who run through the cruise terminal there bring to the city and the region. The ports are there for the benefit of the economics of the region rather than the balance sheet of the port company.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Do the witnesses see Galway Port being able to develop to its maximum potential under the legislation as proposed at present? Do they feel there is a threat from the Foynes development? Do the witnesses feel that Galway Port and Foynes can compete and get on? It would be important to get the views of the representatives on that.

Mr. Eamon Bradshaw:

It is a little difficult in so far as there is a planning application in front of An Bord Pleanála and there has been an objection from Shannon-Foynes to that development, which, of course, we did not welcome and did not expect. We believe there is plenty of potential to co-exist. We believe, from our own research and from working with the economic consultants, that there is more than enough business in Connacht and the west to allow for the development of the Port of Galway. The funding of it is difficult, as we are very much aware, and this has been raised by a number of people. Again, however, we believe that funding will be made available. We do not believe we are a threat to Shannon-Foynes. It is a significant player in this industry and we do not believe this development is any threat because there is sufficient business there.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

We have covered a lot of ground and I accept some of the witnesses are constrained in what they can say about policy or the direction things should take. However, is it fair to say that the biggest problem with the draft heads is that it just is not clear how the legislation will operate. Having moved beyond the current semi-State model, we are being told in broad strokes it is going to the local authority.

What happens after that, however, is not really clarified. Broadly speaking, the choice confronting us is between the corporate subsidiary model and a much more democratic one run by the local authority. Who in the local authority will run it? Is it the elected representatives or the executive? Is that a fair summation of what needs to be clarified?

Ms Philomena Poole:

I suppose the answer is "Yes" in that there is that choice between the two. Dún Laoghaire has made its case in terms of saying that it should be a wholly-owned subsidiary and that the shareholding should transfer. However, there is an issue around clarifying who is to do what in terms of executive or reserved functions. There were members of the local authority on the board in the past and they were removed in 2009 on the basis that it created a conflict of interest when it came to significant things such as the development plan. That would be a concern into the future - how members can on the one hand exercise their responsibilities around the development plan and on the other exercise their responsibilities as directors or, indeed, if it was to be a reserved function. If reserved functions apply, there is going to be a conflict and the legislation will have to address that in some way.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

Was a new board member just appointed?

Ms Philomena Poole:

Yes. The last board position was filled in the summer.

John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On behalf of the joint committee, I thank the witnesses for coming in at short notice and for engaging with us in such an informative manner. There has been a wide-ranging discussion, including some parochialism. There were a lot of equalising points scored in the last period. What has come through in the overall discussion, however, is the need for balance in development between east and west, including along the west coast.

One point made both by members and witnesses was that one facility does not have to be developed as a threat to another. That is the model we need to follow. Competition is needed and the airports were mentioned in this regard. It is important that both Shannon Airport and Knock Airport thrive side by side to develop tourism fully on the west coast. The same applies to Galway Port and Foynes. I hope that all of today's discussion will be reflected in the legislation when it comes before us.

As there is no other business, the joint committee will adjourn until Wednesday, 1 October 2014. We will then have an engagement with the nominees of the RTE and BAI boards. Is that agreed? Agreed.