Oireachtas Joint and Select Committees

Wednesday, 25 September 2019

Seanad Committee on the Withdrawal of the United Kingdom from the European Union

Implications for Ireland of the Withdrawal of the UK from the EU in Regard to Transport Matters

Photo of Neale RichmondNeale Richmond (Fine Gael)
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Apologies have been received from Senator Gerald Nash. I remind members to ensure their mobile phones are switched off. This is important as it causes serious problems for broadcasting, editorial and sound staff.

I welcome all our witnesses from key parts of the transport sector to update the committee on the implications of Brexit for the transport sector and preparations for Brexit. In May and June 2017, we had valuable engagements with these key organisations: the National Transport Authority, NTA, the Dublin Airport Authority, DAA, and the Irish Rail and the Freight Transport Association, IRFTA. It was clear even then that transport links for individuals and freight would be one of the major challenges. Whatever happens in the next couple of weeks, transport links will be one of the most immediate and visible impacts of Brexit. We very much appreciate all these experts making time to be available to us again today. We look forward to learning from them as much as we did on the previous occasion.

Before inviting the witnesses to make their remarks, I remind everyone of the rules on privilege. 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, either by name or in such a way as to make him or her identifiable.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a 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. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I reiterate my appeal to members and witnesses about switching off their mobile phones. Before inviting our guests to make their remarks, I must point out that the Seanad is sitting and we are subject to votes being called. If we are called to a vote, we will suspend briefly. The process takes about eight to ten minutes depending on how divisive Senator Craughwell chooses to be-----

Photo of Paul DalyPaul Daly (Fianna Fail)
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It has just happened.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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Unfortunately, Senator Black has to leave early for an important parallel meeting at 2.30 p.m., such is the nature of Oireachtas business. I ask Ms Graham, Mr. MacCarthy, Mr. Gilpin and Mr. Flynn to make their opening statements in that order, following which I will invite the members to ask questions and make comments.

Ms Anne Graham:

I thank the Chairman and members of the committee for the invitation to attend. I understand that the committee wishes to focus on the impact on transport of the withdrawal of the United Kingdom from the European Union. To assist me in dealing with the committee's subsequent questions, I am joined by Ms Anneliese Jones, public transport regulation manager with the NTA.

Before dealing with the specific area of focus, I would like to set the context by providing a brief overview of the remit of the NTA in the provision of public transport services. The remit of the authority is to regulate and develop the provision of integrated public transport services - bus, rail, light rail and taxi - by public and private operators in the State, to secure the development and implementation of an integrated transport system within the greater Dublin area, and to contribute to the effective integration of transport and land use planning across the State.

In addition to its statutory responsibilities, the NTA has various arrangements with the Department of Transport, Tourism and Sport to discharge functions on its behalf. These include the assignment of responsibility to the authority for integrated local and rural transport, including provision of the rural transport programme. The authority is, therefore, an agency that implements Government and departmental policy in line with its legislation. The Department of Transport, Tourism and Sport plays a key role in managing any change in legislation or regulation required for the management of cross-Border public transport services.

The NTA is responsible for securing the provision of public transport services through two specified mechanisms, namely, public service contracts, where services cannot be provided on a commercial basis, and the licensing of public bus services, which is operated on a commercial basis. The main relevant legislation is the Dublin Transport Authority Act 2008 and the Public Transport Regulation Act 2009, as amended by the Vehicle Clamping Act 2015 and the Public Transport Act 2016.

The focus of my statement today is on the regulation of cross-Border bus services and to give the members an update since my previous statement to this committee. I believe my colleagues from Iarnród Éireann will update them on cross-Border rail services.

Regarding cross-Border bus services, currently, all bus and coach traffic to and from the UK is regulated by Regulation [EC] No. 1073/2009 on the common rules for access to the international market for coach and bus services. This regulation applies to regular, special regular, occasional, and cabotage operations. The NTA is the designated competent authority to issue authorisations and control documents and to authorise cabotage operations under this regulation. The Department for Infrastructure in Northern Ireland is the competent authority for Northern Ireland.

Once the UK leaves the EU, it will automatically become a third country. In the longer term, the Interbus Agreement is the legal framework that will provide a basis for the carriage of passengers by bus and coach between Ireland and the UK after the withdrawal date.

At present, this only applies to the international occasional services between certain non-member states and member states. It does not apply to regular international services, national services, the use of buses and coaches designed to carry passengers for the transport of goods for commercial purposes or to own-account occasional services. A protocol to the Interbus Agreement covering regular passenger transport services was negotiated between the contracting parties, but it is not expected to enter into force in time to be a viable alternative. To cover this gap in regular international services, as well as allowing for any delay in the accession of the UK to the interbus protocol, Regulation [EU] 2019/ 501 was adopted by the EU on 25 March 2019, to ensure the continuation of regular authorised services. As a further contingency measure, the Government enacted in March 2019 the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019. Once commenced, that will amend both the Dublin Transport Authority Act 2008 and the Public Transport Regulation Act 2009 to enable the authority to authorise and regulate services with third countries.

However, neither the current or proposed Interbus Agreement provides for cabotage operations as part of a regular service. The withdrawal Act could not provide for cabotage operations, as that is within the European Union's exclusive competence. Member States "may negotiate or enter into such commitments only if empowered to do so by the Union" in line with Article 2(1) of the Treaty on the Functioning of the European Union, TFEU. Article 2(1) provides for the Union to empower member states in respect of areas in which the Union has exclusive competence.

The EU has recognised:

Cross-border coach and bus services between Ireland and Northern Ireland are of particular importance for communities living in the border regions, in view of ensuring basic connectivity between communities inter alia as part of the Common Travel Area. The picking up and setting down of passengers in regions on either side of the border supports the viability of those services. Therefore, the picking up and setting down of passengers by United Kingdom coach and bus service operators should continue to be authorised in the border regions of Ireland in the course of international passenger transport services by coach and bus between Ireland and Northern Ireland.

Regulation [EU] 2019/501 ensures the continuation of regular, authorised services up to 31 December 2019 and cabotage operations up to 30 September 2019. These dates were based upon a withdrawal date of 30 March 2019. The authority is strongly in favour of the proposed amendment to Regulation 2019/501 to extend the applicable dates to potentially allow for regular services to continue until 31 July 2020 and cabotage in the Border region for six months after the regulation comes into force. Furthermore, the authority would be supportive of permission at an EU level that would enable Ireland to put alternative arrangements with the UK that would permit cabotage in the Border region. That concludes my introductory presentation. I trust we will be able to answer any queries that arise.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I trust we will have plenty of queries for Ms Graham.

Mr. Niall MacCarthy:

I am Niall MacCarthy, managing director of Cork Airport. I am a member of the DAA executive team. I am here today in my capacity of DAA executive Brexit lead and I am speaking on Brexit planning for both Dublin and Cork airports. I thank committee members for the invitation to attend and for facilitating the important discussion on the implications of Brexit for Irish aviation and for the wider transport sector.

DAA is a global airport and travel retail group which operates in 13 countries. In Ireland, DAA manages and operates the country's key gateways at Dublin and Cork airports, which welcomed a combined 34 million passengers in 2018. DAA's airports at Dublin and Cork are uniquely exposed to Brexit in a European airport context, given the significant traffic flows that exist between Ireland and the UK. To put it in context, research by our industry body, Airports Council International, ACI, Europe, published in October 2018, shows that UK passenger traffic accounted for, on average, 12% of total traffic flows across EU 27 airports in 2017. In contrast, UK traffic amounted to 38% of total Irish traffic, which emphasises why we are uniquely exposed.

Given these unique challenges. Brexit has, over the past three years, been a critical and ongoing area of focus for our business. DAA has established an internal Brexit planning team, which has been focussed on identifying and understanding all of the potential impacts which Brexit could bring for our airports, passengers, and customers, as well as for our wider business. We have put in place robust contingency measures to effectively minimise these impacts. In our planning, we worked closely with Departments such as Transport, Tourism and Sport and Agriculture, Food and the Marine, key State bodies such as Revenue and the Irish Naturalisation and Immigration Service, INIS, as well as customer airlines and a range of other key operational and commercial partners at our airports. We have also participated in key industry fora such as the National Civil Aviation Development Forum, NCADF, Fáilte Ireland and Tourism Ireland's Brexit readiness group and the Irish Institute of European Affairs Brexit readiness grouping.

I would like to provide the committee with a brief overview of the implications of a no-deal Brexit for Irish aviation and DAA's airports, as well as the steps that have been taken to manage these impacts. First, this is categorically important in terms of our own business, I reassure the committee that we expect flights to continue to operate as normal at Dublin and Cork airports in the event of a no-deal Brexit. If the UK leaves the EU without a deal, emergency regulations will come into force at EU level to protect air connectivity for passengers and freight between the EU and the UK. Regulation EU 2019/502 on common rules ensuring basic air connectivity with regard to the withdrawal of the UK from the Union will take effect immediately in the event that the UK exits the EU without a deal on 31 October and will apply until October 2020.

It will bring into force a range of provisions to ensure that UK air carriers can continue to provide basic air transport services between the UK and the 27 remaining EU member states, including Ireland. The UK has confirmed that it will mirror the provisions set out in the EU regulation in respect of the rights of EU air carriers within the UK. For example, the regulation will, in a no-deal Brexit scenario, give UK air carriers the right to continue to perform scheduled and non-scheduled international air transport services between any point within the UK and the EU. It will also allow UK carriers to continue to engage in co-operative marketing arrangements such as code-shares under certain conditions and will allow further traffic freedoms for all cargo services for a limited period.

In addition, the regulation also states that if airlines can, within two weeks of the no-deal legislation taking effect, provide proof to the European Commission that they have robust plans to ensure compliance with EU ownership and control rules within the subsequent six-month period, these airlines would in effect be entitled to a six-month grace period, during which their EU operating licences and associated rights would remain unaffected. For information, I have supplied a copy of the regulation, as well as recent amendments to it, to all members. Given these important provisions, and given the current traffic profiles at our airports, it is critically important to emphasise that flights into and out of the UK and feeder flights through the UK will continue to operate in a no-deal Brexit scenario. It is important that we all get this message out to the travelling public.

The next key area I will address relates to the passenger journey, and the key implications Brexit will have within our airports from a passenger viewpoint. First, I will address the implications of a no-deal Brexit for passengers departing at our airports. Regarding security processes, there will be no changes or additional requirements for UK-bound passengers departing from Irish airports, as a result of a no-deal Brexit. UK-bound passengers will simply continue to comply with all current security processes and requirements, with no change anticipated from existing processes. Furthermore, the Government has now confirmed that duty-free shopping will return on alcohol and tobacco products if the UK leaves the EU without a deal. This means that passengers departing from Irish airports to UK airports will be able to purchase these products at duty-free prices, but only in the event of no deal. Other than that, we do not anticipate any other significant implications for passengers departing through Irish airports.

Second, I will address the implications of a no-deal Brexit for passengers arriving at our airports from the UK. At airport immigration, UK passport holders arriving at Irish airports are currently processed through the European Union, European Economic Area and Switzerland, EU-EEA-CH channel. If the UK leaves the EU without a deal, INIS has confirmed that UK passport holders will continue to be processed through the same channel. However, the channel will be redesignated as an EU-EEA-CH and UK channel. There will be no additional or onerous immigration checks applied to UK passport holders at Irish airports. It is important we all get this message out as there is likely to be confusion and uncertainty, in particular with UK tourists considering coming to Ireland.

DAA has identified all relevant signage that will need to be changed within our airports in this scenario. The new signage has been printed and is currently being held in storage, on standby, to be switched over, if and when required. In the event of no deal, additional customer services staff will also be deployed in immigration areas at the airports, for a period, to advise passengers, and to deal with any queries or confusion which could arise.

At customs points in the arrivals hall, Revenue has confirmed that all passengers arriving at Irish airports from UK destinations, including all Irish and EU passport holders, will be required to use the green channel in a changed scenario. We will simply use a different channel from that we use now; rather than using the blue channel, we will use the green channel.

Again, we will have customer services staff on hand to help passengers and to deal with any queries or confusion that may arise during the transition period.

Furthermore, UK arriving passengers will need to ensure that they are aware of allowances applicable to duty-free and tax-free goods and that they are in compliance with these allowances. If they are carrying goods in excess of these allowances, they will need to make a declaration at the red customs channel. Generally, UK passengers arriving in Irish airports who have not made purchases exceeding their allowances will have the normal smooth experience, except that they will use the green rather than the blue channel. Random checks will continue to arise.

Another area which will be impacted at Irish airports in a no-deal Brexit scenario is bulk cargo, as a result of the additional paperwork and inspections which would be required for UK cargo on both sides of the Irish Sea. Airports will be far less impacted in this area than ports, given the relative scale of freight handled by airports compared with ports. Dublin Airport handled 143,000 tonnes of freight in 2018, while Dublin Port handled more than 26 million tonnes of freight in the same period. Notwithstanding this, we in the DAA have been engaging closely with Revenue and customs for a no-deal scenario. Revenue and customs have confirmed that their preparations are now well progressed, with an additional 40 customs officers in place at Dublin Airport to meet increased requirements. Similar preparations have been made by customs with respect to Cork Airport. On this basis, no material impacts are currently anticipated for DAA airports by Revenue and customs in this area of bulk cargo, though there will be significant additional paperwork.

Finally, like all businesses in a no-deal scenario, DAA could potentially face disruptions, delays, and interruptions to its own supply chains. To this end, detailed and comprehensive risk assessment and contingency planning has been completed with respect to DAA’s supply base, and mitigating actions have been undertaken where necessary to protect ongoing supplies, such as chemicals and equipment from the UK. Beyond the operational impacts that I have outlined, it is also very important to add that, ultimately, the greatest risk for Irish aviation from a no-deal Brexit is the wider macroeconomic impact that such a scenario would bring to Irish tourism and business. Inevitably, with sterling predicted to fall further in the event of a no-deal Brexit, Fáilte Ireland has indicated that at least 10,000 jobs would be at risk in the tourism sector in Ireland. Estimates vary but Fáilte Ireland believes there could be a loss of more than one million British tourists each year, resulting in the loss of €380 million per annum. To put this in context, 3.5 million visits from Britain were recorded in 2018, contributing around €1 billion to the Irish economy. For this reason, we in the aviation industry strongly believe that everything possible should be done to avoid a no-deal Brexit to safeguard tourism and all the jobs throughout the country that are dependent on it.

Our expectation is that the operational impacts for Irish aviation and Irish airports will be relatively minimal in a no-deal Brexit scenario and, where impacts will be experienced, I believe that the DAA and its key stakeholders are taking all reasonable measures to minimise any negative effects that could be experienced. However, I cannot emphasise enough the macroeconomic damage that will arise to tourism and travel in the Irish economy from the currency and other effects of a no-deal Brexit. I look forward to any questions the committee may have.

Mr. Billy Gilpin:

I thank the committee for the invitation to attend today to discuss the impact on transport, as it relates to Iarnród Éireann, of the withdrawal of the United Kingdom from the European Union. Our chief executive, Jim Meade, apologises for the fact that he is unavailable to be here today. I will address our readiness for Brexit in the context of the operations of Enterprise services, and Mr. Carr will do so in the context of our role as port authority for Rosslare Europort.

The Dublin to Belfast Enterprise service is jointly operated by Iarnród Éireann and our colleagues in Translink in Northern Ireland. Since the committee last considered the impact of Brexit on transport services in 2017, we have continued to work jointly with Translink to understand the potential impact of Brexit on Enterprise services and to ensure, particularly as a no-deal Brexit has become a more likely possible outcome, that we undertake the necessary measures to mitigate that impact and to ensure we continue to offer a seamless service to Enterprise customers. This has been done with the support and guidance of officials of the Department of Transport, Tourism and Sport and with the invaluable regulatory input and oversight of the Commission for Railway Regulation, CRR.

I am pleased to confirm to the committee that from a customer point of view, under all models of Brexit, Enterprise customers will see no change to the service we jointly provide with Translink. In terms of European Directive 2012/34, as reflected in SI 249 of 2015, the CRR is the regulatory body, licensing authority and independent monitoring body for the heavy rail sector in the State. In addition to the regulation of rail safety, its functions include the licensing of railway undertakings, more simply described as train operators, wishing to access the network. Currently, EU regulations allow Translink to operate south of the Border based on the UK’s EU membership and train drivers holding EU-compliant train driving licences. Translink is well advanced in the process of obtaining approval from the CRR to be licensed as a railway undertaking in Ireland should a no-deal Brexit materialise. If, for any reason, the licensing of Translink as a railway undertaking in Ireland is not completed by 31 October, we have developed proposals under which Enterprise services south of the Border would operate under Iarnród Éireann’s operating arrangements and licences, pending the finalisation of Translink’s status as a railway undertaking in Ireland. As detailed, this understanding and progression of the licensing arrangements could not have been achieved without the practical and solution-based approach taken by the CRR and Department of Transport, Tourism and Sport and the partnership ethos between ourselves and Translink.

Regulatory matters will have been resolved in a manner that will protect the seamless service we provide with Translink, and which both companies have been proud to deliver.

Before I hand over to Mr. Carr to discuss Rosslare’s preparations, I would like briefly to reassure the committee on the issue of fuel supply in the event of a hard Brexit. Iarnród Éireann, on behalf of the three CIÉ operating companies, keeps defined minimum fuel supply levels, as provided for under the National Oil Reserves Agency standards, as part of the State’s fuel security measures. This equates to approximately two months' supply for the operation of all rail and bus services across the CIÉ group. We currently hold in excess of this level, with approximately three months' supply, and intend to increase these levels further to ensure security of fuel supply for rail and bus services as contingency for any issues that could arise in the early weeks of Brexit.

Mr. Glenn Carr:

I am the general manager for Rosslare Europort. Rosslare Europort is the second busiest roll-on, roll-off, ro-ro, port in the country. On average annually, the port handles up to 120,000 freight trailers, 800,000 passengers, 20,000 trade cars and about 50,000 tonnes of bulk. The port enjoys the advantage of having capacity, space and surrounding land availability to both ease the possible disruption of the Brexit process and to attract new business. As the closest port to mainland Europe, Rosslare Europort offers the quickest direct sailing times to key European ports, offering an alternative to the current use and dependency of the UK landbridge. Opportunities for new routes are being explored with French, Belgian, Spanish and Dutch ports as well as with various shipping lines operating the ro-ro market. Working closely with Government and State agencies, shipping lines and haulage industry, Rosslare Europort will be ready for both a no-deal and transition deal on 31 October.

Rosslare Europort was recommended and approved for significant facility upgrades as part of the Government central case to meet customs, Revenue, agriculture and immigration controls post Brexit. A 16-acre temporary border inspection post, BIP, and facilities have been designed and built by the OPW which will help ensure that freight and passenger traffic will be efficiently discharged from the berths to the BIP away from the port, which will help ensure any issues in the event of no deal will be managed in an orderly fashion as best as possible. The longer-term central case designs for permanent facilities are under way and will link in with the master plan designs for the development of the port and incorporate further improved road access and connections. Additional resources in customs, Revenue, agriculture and health have been recruited and trained by the relevant agencies to provide the necessary support and to ensure the efficient movement of freight and people through the port. Through ongoing engagement with a stakeholder group with Government agencies, shipping lines and industry, both transition deal and no-deal scenarios are finalised, with workshops and exercises having taken place and more planned in the coming weeks.

Rosslare Europort would like to acknowledge the positive engagements and ongoing support throughout this process from the Department of the Taoiseach, the Department of Transport, Tourism and Sport, the Department of Finance, the Department of Agriculture and Food, the Department of Health, the Department of Justice and Equality, the Office of Public Works, OPW, and the Office of the Revenue Commissioners.

A no-deal Brexit will bring fundamental changes and challenges regarding how the movement of freight and people between the UK and Ireland will operate at ports. These changes and challenges will be managed to ensure the efficient movement of trade and people between both countries through ongoing contingency planning, communications and investment in infrastructure, resources and facilities at Rosslare Europort. We are happy to address any questions.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I thank the witnesses and I invite Mr. Flynn to make his contribution.

Mr. Aidan Flynn:

I am delighted to present to the committee today on issues of major concern to our members. The Freight Transport Association Ireland, FTA Ireland, is a not-for-profit membership trade association representing some of the largest freight distribution, logistics and passenger operators in Ireland, with more than 25,000 employees and 12,000 commercial vehicles operating between them. From our establishment, our members have demanded that FTA Ireland develop and implement an industry-wide standard called TruckSafe. That facilitates a path to continuous operational compliance, but also provides recognition for commercial fleet operators in the so-called own account and haulage sector who meet their minimum legal operational obligations.

Brexit has mandated that we define and appreciate the supply chain in all its efficiencies and complex distribution channels and relationships. Key to the challenge of dealing with change such as will be caused by Brexit is to stay competitive, develop strategic plans and implement these plans with confidence to pre-empt and manage the change. A core objective of FTA Ireland is to provide our members with up-to-date guidance and information on operational compliance and standards that make this process easier. Promoting the highest standards of compliance and professionalism through our TruckSafe standards help drive this culture within our membership.

In 2017, FTA Ireland published our Brexit position paper. Its key recommendations are still relevant today. These include avoiding checks at the Border, preserving the Common Travel Area, ensuring seamless transport links between Ireland and the UK, preserving mutual recognition of documents, qualifications and licences to limit disruption to road transport and logistics operations and, most important, ensuring a seamless transition to the post-Brexit era. We commend and support the Government for the work done to date on ensuring Irish interests are heard and understood in the UK and at EU level.

Uncertainty remains the main cause of concern for the freight, distribution and logistics sector as Brexit day, 31 October, gets ever closer. FTA Ireland continuously and consistently engages with our members through briefings, seminars, meetings. We have also developed publications and guidance notes to raise awareness of the implications of Brexit, with emphasis on encouraging the development of contingency plans. Due to the uncertain and protracted political situation in the UK, the costs, in both resources and monetary terms, to develop contingency plans create a challenge to keep industry focused on preparing for the post-Brexit trading environment. According to the recently published Managers Guide to Distribution Costs 2019, respondents estimated that they allocated 606 hours per company to preparing for Brexit in 2018, equating to taking one person out of their business for more than 75 days or 15 working weeks. Companies anticipate the number of hours allocated will increase to 720 in 2019 or the equivalent of 18 working weeks. This, however, is more complicated for the small and medium enterprise, SME, sector, which includes the majority of haulage businesses. Approximately 13,500 trucks operate an international haulage licence out of a haulage fleet of 18,000 heavy goods vehicles in Ireland. The average fleet size is slightly more than five vehicles. The sector is driven by high-volume, low-margin business and is struggling to allocate time and resources, which operators do not have, to prepare for Brexit.

Ireland stands to be affected the most due to our geographic location and reliance on the UK, not just as a trading partner but as a link to continental Europe. While the focus has been on looking to new markets, we must not negate the importance of the UK as a market for Ireland. In 1973, almost 55% of the total value of exports from Ireland went to Great Britain. By 2018, according to data from the Central Statistics Office, CSO, this reliance had reduced significantly to 11% of total exports, worth approximately €14 billion. It is not all about exports, however. Imports are vitally important to the Irish economy. Some 22% of imports, worth €18 billion, came from the UK in 2018.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I hate to interrupt Mr. Flynn, but a vote has been called in the Seanad. I have noted where Mr. Flynn has stopped in his presentation, however. If Mr. Flynn will extend us the courtesy, we will go to vote. The process will only take about ten to 12 minutes and we will then resume this meeting at the exact point where we left off. Members have questions for the witnesses, as do I, so I ask for their patience for a short time. The situation may change if Senator Craughwell calls a walk-through vote.

Sitting suspended at 2.35 p.m. and resumed at 2.51 p.m.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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We will resume in public session. Prior to the suspension, Mr. Flynn mentioned we have imports from the UK worth €18 billion.

Mr. Aidan Flynn:

I thank the Chairman for that. The complexity of the issues faced by traders in a post-Brexit world in getting goods to market cannot be underestimated. Understanding customs union issues and Single Market issues is critical in developing effective contingency plans. The supply chain, as it currently stands, has incrementally adapted to the efficiencies the Single Market has afforded, however, a sharp shock like Brexit will have the consequence of creating significant friction in the supply chain that will result in increased costs, reduced product choice and loss of jobs. Being prepared and having flexible contingency plans will be very important in dealing with and mitigating risk in the changing trading environment. Time is also vitally important for business to prepare and adopt to the future trading environment. The EU and Ireland have publicly highlighted that protecting the integrity of, and competition within, the Single Market are of vital importance in any deal.

Future arrangements must deal not only with customs issues but with regulatory requirements such as mutual recognition of licensing for the movement of goods by road, driver licences, qualifications and insurance requirements. UK nationals living and working in Ireland are encouraged to transfer their driving licence to an Irish one, swap their UK issued driver certificate of professional competence, CPC, card for an Irish one prior to 31 October 2019 or face the prospect of driving illegally on our roads.

While road transport within the EU is harmonised and, thus, based on common EU rules, road transport between EU and non-EU countries - third countries - is still largely based on bilateral agreements between individual member states and third countries. That harmonisation will expire once the UK leaves the EU, unless and until there is an agreement between the UK and the EU. Currently, the movement of goods is taken for granted in that it happens seamlessly.

In the event of no deal, the EU Commission has agreed to extend access to the EU transport market for an additional seven months until the end of July 2020. However, cabotage will be phased out over this period.

Efficient logistics are derived from industry finding the path of least resistance to markets. The cheapest and the quickest route to the EU market that supports the just-in-time model of logistics is known as the landbridge. It involves a journey duration of 20 hours versus 40 hours on Ireland-EU direct routes and it is also three times quicker than container shipments. This is by no means the only route to market, but it relies on access to continental Europe via Great Britain. The Irish Maritime Development Office, IMDO, published a report in 2018 entitled, The Implications of Brexit on the Use of the Landbridge, which highlights that 150,000 trucks use the landbridge each year moving more than 3 million tonnes of product. Post-Brexit the landbridge will be compromised because of multi-agency checks at ports and new administrative red tape which, ultimately, will lead to increased costs and delays. In addition, Operation Brock, a newly proposed traffic management plan to reduce congestion at southern UK ports will further complicate the viability and efficiency of the landbridge.

To use the landbridge, hauliers will have to operate under the common transit convention, CTC. It requires a guarantee-bond to cover VAT and excise duties and will ensure that import and export declarations do not have to be completed while entering and exiting a third country - Great Britain - en routeto continental Europe. The CTC is closely aligned with the simplification process encouraged by Revenue for businesses to be authorised economic operator, AEO, accredited. To date, there are only 230 AEO registered companies, which is only up by 90 companies since the start of the Brexit process. Furthermore, it is taking more than nine months to attain AEO status.

There are more than 80 ferries per week between Dublin Port and Great Britain and an additional 28 per week from Rosslare to Great Britain. This compares to 17 ferries per week between Ireland and continental Europe for roll on-roll off and lo-lo. An issue for consideration post-Brexit in the event of no deal is the scheduling of ferries, particularly in Dublin Port. Currently, ro-ro ferries are arriving into Dublin Port with up to a 9.5 km lane of trucks starting at 5 a.m. every morning. The ferry companies in most instances are arriving in convoy with 30 minutes separating four ferry arrivals from time to time. In a post-Brexit world this will add strain on the system as all these drivers and trucks will have to be processed at the same time. This has implications for everyone, including the development of logjams in the system that perhaps could be avoided if the arrivals were staggered.

The importance of having contingency plans cannot be denied but this in itself will not result in 100% compliance at ports. The reality is that planning, training, upskilling, better procurement practices, consignor liability, shared responsibility and increased awareness of one's supply chain is a start in determining the best way to get goods into and out of the country as efficiently as possible.

FTA Ireland welcomes the supports for industry, such as the Clear Customs initiative, and Enterprise Ireland and InterTradeIreland supports. These solutions only cover some of the industry's needs. A more all-inclusive approach needs to takento support all in the supply chain, and one sector, in particular, that has been overlooked is the haulage sector. The burden of compliance will be levelled at the haulage operator which is at the mercy of its clients and consignors. Help and assistance need to be provided for hauliers as a matter of urgency to aid their Brexit preparations. Without hauliers, goods will not get moved and without compliance, hauliers goods will not get delivered on time. All must be working together to ensure the realities of a no-deal Brexit are understood.

Revenue advises that only 2% of vehicles will require physical checks and only 6% will require documentary checks, which will not take as long. This is predicated on there being 100% compliance with declarations and documents for the loads on the vehicles. Irish business will go from making 1.7 million declarations per annum to making more than 20 million declarations per annum. Revenue will be available to work 24-7 but it will expect to have access to customs agents 24-7 in the event of errors with declarations. That will be problematic as there is a lack of agents available and working in Ireland with the necessary resources and competencies at the moment. The burden for agrifoods is much more pronounced with 100% documentary checks and between 20% and 50% mandatory physical checks for meat, poultry, eggs, fish and even honey.

To assist industry preparation, regulatory bodies must consider doing dry runs in the ports to trial the new post-Brexit requirements of customs checks, driver routing - for instance, drivers need smart phones to access a Revenue routing site 20 minutes from docking at Dublin Port - and sanitary and phytosanitary, SPS, checks. Publication of routing and traffic plans in and around ports are long overdue and engagement with all stakeholders, including representative associations, is of vital importance to ensure industry has all the necessary information.

The recently announced Operation Purge, where in the event of congestion in Dublin Port trucks will be directed to park up at service stations and other areas off the motorway network that they normally use until congestion at the port eases has a sense of a half-baked plan. Given the fact that trucks travel from all over Ireland to Dublin Port, one would expect a more detailed and thought-out plan to take account of the lack of facilities currently available for drivers. Consideration should be given to how to communicate to the haulage sector effectively to notify drivers that the port is closed and to park up in designated parking areas until further notice.

Given the inevitability of delays on arrival at ports from Great Britain, welfare facilities and rest areas are needed for drivers. Drivers need to understand and be advised of the length of delays to expect from the outset and communication between regulatory authorities and drivers is very important to ensuring speedy processing and aid the efficiencies in getting products to market.

All Brexit preparation-related training should benefit from increased support through the likes of Skillnet. FTA Ireland calls on Government to categorise all Brexit training to include customs courses, preparation for distribution of agrifoods, supply chain adaptation and preparation for the haulage sector to receive up to 80% funding through Skillnet. This can be done by designating this training under the employment activation funding. Given the critical nature of Brexit and the implications for the Irish economy, designation through the employment activation fund will enable the level of funding required that will act as a vital incentive to aid the freight distribution and logistics sector to upskill, as necessary, in preparation for Brexit.

With regard to infrastructure, over 90% of all trade with the UK transits via Dublin Port. There is an over-reliance on Dublin for connectivity with the UK. FTA Ireland is calling on the Government to support investment and planning in our other strategic ports, such as Waterford and Rosslare, as this will result in reduced congestion in Dublin and facilitate rural economic development and new routes to market. It is vital that the obvious future pinch points are assessed now and that pre-emptive measures are taken that will facilitate dynamic growth and opportunity for both import and export activity in Ireland.

There will be many Government agencies charged with checking goods, paperwork and people. It is very important that there are inter-departmental synergies in areas such as shared intelligence, a pragmatic approach to dealing with traders, and even a helpful demeanour. Fact sheets and information and guidance must be produced for industry to aid engagement with these bodies. This will raise levels of awareness and help with the flow of traffic.

Ports must reach out to all stakeholders to communicate more effectively their plans for preparedness and to look for reasonable input in providing the best possible solutions. Space is an issue for most ports, with a finite amount of space available for parking and checking trucks. However, the haulage sector must be engaged to fully understand the new checking facilities and traffic management so they can plan for them efficiently. The infrastructure must take account of tachograph rules, welfare facilities must be provided for drivers in the event of delays, and the ports must be adequately staffed to manage traffic and traffic flow.

Finally, it is vital that there is a period of transition to the new trading environment. While we are working hard as an industry to prepare, the reality is there will be significant learning once Brexit happens. We need to respect the fact that the transition to the new training environment will not be easy for industry or for regulatory bodies. Mutual respect, clear communication, and stakeholder engagement will be vital in adapting to the new post-Brexit trading environment. I thank the committee for its time.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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It looks like I will have to battle for speaking space. I thank the delegations for being here today and taking the time to make their presentations. In 2016, I spoke about the need to recover the corporate knowledge we had with respect to managing borders, managing freight, and so on. Sitting here today, a number of days out from what is supposed to be the day on which the UK crashes out with or without a deal, we still do not know how people in Border areas are going to manage. We still do not know what is going to happen. I have just come from a briefing with the German-Irish Chamber of Industry and Commerce. A person involved in distribution and logistics spoke. He put on the record some of the problems that lie ahead. I am not 100% sure how to put all these problems before the witnesses, but I will try to work my way through them.

I will deal with Mr. MacCarthy first. I compliment him on the work he does with the airport in Cork. I am desperately sorry the airport lost the transatlantic flights but I met Mr. MacCarthy some years ago and I know that he will drive ahead and find somebody to fill that niche. It is a wonderful airport; fair play to Mr. MacCarthy. I have discussed the issue of the common travel area at the Joint Committee on the Implementation of the Good Friday Agreement on a number of occasions. The common travel area as we know it has no legal underpinning. It is, for all intents and purposes, a gentleman's agreement. Given the way things are going in the UK, nothing is guaranteed. We have no idea where we are going. If I land at Cork Airport, Dublin Airport or Shannon Airport on 1 November, will I find EU-only and non-EU laneways for arriving passengers? Will I be subjected to all the customs checks and everything else? Does Mr. MacCarthy believe that the Government has the structures in place the DAA will need to operate?

I will move past Mr. MacCarthy and speak about Rosslare. The first thing that always bothers me about Rosslare relates to the amount of importing and exporting that goes on there. We have a railway line right to the port and we have hundreds of 40-foot trucks coming off ships all day, every day. The Germans in particular have expressed that there is a need to develop the Port of Cork, Rosslare Europort and, possibly, the Port of Waterford for deep-sea roll-on, roll-off freight on the seabridge route. That brings with it its own problems. If we are using the landbridge, we will have drivers sitting idle for a short period of time. If we use the seabridge route, we will have a driver sitting on a ferry for 30 hours. I do not know what sort of negotiations have taken place on that issue. With regard to Rosslare - and I am addressing Mr. Flynn with this as well - the issue of split loads going out on trucks came up this morning. A truck can take a load, half of which is for delivery to the UK and half for transport on to Europe, which could result in problems.

The central problem discussed this morning was customs and customs clearance. Three years ago I recommended that universities or institutes of technology establish courses in customs clearance and logistics management. I am not aware of any now in place. I do not know where we will get the corporate expertise to manage borders both within the island of Ireland and those encountered when moving through the UK landbridge or the seabridge to Zeebrugge or Doesburg. I have serious concerns. Even in respect of simple things like the description of goods for customs purposes on a T2 form, we are now a little bit loose on the descriptions used. One can just put in a part number and move on. Under customs rules, one will have to give detailed descriptions. Even the invoicing documentation used in the country at the moment is not suitable for inter-customs movement where goods are moving across the UK.

We are still not sure what will happen to a truck leaving Dublin Port to arrive in Liverpool or Holyhead before moving on to Dover to cross the Channel. We are not sure how that will be dealt with from a customs point of view. One particular transport company up in the Cushendall area that transports the raw materials for Coca-Cola and pharmaceuticals has informed me that, if the door of the trailer is opened, the entire contents of the trailer have to come back; they cannot continue through. Can we honestly expect UK customs and border security to turn a blind eye to every truck and to say "Drive on lads, you are from Ireland"? There are some in this organisation who believe there will be a laneway from Holyhead to Dover dedicated to the Irish market. These people should wake up. I do not believe the Mr. Flynn believes his drivers will be given priority over UK drivers as they try to make their way across the country.

I am asking for the witnesses' professional opinions. We had them before the committee some time ago. The clock is now ticking very rapidly and I am of the view that we are in no way prepared. Mr. Flynn spoke about trial runs a little while ago. I am not aware of any trial run having taken place anywhere in the country. More importantly, I am not aware of any trial or training programme having taken place for customs personnel. I am just not aware of any. Going back to Ms Graham of the National Transport Authority, there is the issue of buses crossing over the Border and back. I remember the days when we would go to Jonesborough to buy our Christmas shopping and so on. People were marched off the buses and everything they had was checked. I remember one dear lady wearing two overcoats to avoid whatever taxes or duties were due and dying with the sweat as she got off the coach. I can see no problem with the transport of people, but I see a problem with what people carry. I do not see the UK authorities doing anything with the Border. I see a Turkish-Greek solution. From Finland to Greece, there are 11 countries in the European Union with external borders. None of those countries has a derogation with respect to cross-border activity. It could be argued that their borders are all with the countries of eastern Europe and that there would not be the same level of trade, but I am aware of no derogation for the Irish with respect to Northern Ireland.

I was there two weeks ago for a weekend, and I met many people on the ground, including ordinary people who cross the Border for GAA matches and members of the DUP, the Orange Order and the manufacturing community. I did not meet members of the agricultural community because I had met them before. These people are petrified and nobody is giving them an answer. The speaker at the German event this morning contacted the Irish Government about border movements and movement across the UK, and was given information on transport moving from the Republic of Ireland into the UK, across the UK and into Europe. He then asked about Northern Ireland and was told that we do not talk about that. Is that good enough at this stage of the game?

My final point is on the issue of migration, which also relates to buses. I am not going to get into whether these people are refugees or economic migrants because that is not the issue. The issue is that the European Union has a migration policy. How are we to implement a migration policy if we have freedom of movement across the Border in buses with nobody checking who is on board or where they came from? Migration was a major factor for the British in deciding to pull out of the European Union. Ireland will now be a gateway to the European Union from Britain if people wish to travel through Northern Ireland. This will also apply to Mr. MacCarthy because people arriving at his airports will come under closer scrutiny and may need to be repatriated to wherever they came from. I have thrown many questions at the witnesses but these are the things I am hearing from experts and people on the ground. Many people in Mr. Flynn's industry are also beside themselves because they do not know where they are going.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I thank the Senator. As he is aware, roving immigration checks are already conducted on buses and trains along the Border, on a cross-Border basis, regardless of the common travel area. That will not change.

Senator Craughwell has already asked about Rosslare, so I only have one question. I refer to Ms Graham's remark on cabotage and seeking what I would interpret as a bilateral agreement between Ireland and the UK. How would that be done? Would it not be in breach of European rules? From which directive would we need a derogation in order to achieve that? Is this aspirational or is it a genuine request? I open the floor to all the witnesses to answer the various points and questions that have been raised.

Mr. Niall MacCarthy:

I thank Senator Craughwell for his questions and kind words about Cork Airport. His question related to the common travel area not being set down in legislation, and whether we have doubts or concerns on the immigration process post Brexit. The common travel area predates our entry into the EU and has been respected since the foundation of the State. In more recent years, people have been required to carry a passport for aviation, which happened irrespective of the common travel area. That requirement continues. The day after the referendum in the UK, we realised Brexit was going to be significant for Ireland and our business, so we mobilised a part-time team which deconstructed all aspects of aviation, such as the journey, freight and security. We began with pilots' licences, the regulation of aircraft and security processes. One by one, we contacted the Department of Justice and Equality, the Irish Naturalisation and Immigration Service, INIS, the Garda National Immigration Bureau, GNIB, the UK Airport Operators Association, and the British Embassy, and started to tick through all the concerns we had. We are absolutely confident that the common travel area will be respected. We have engaged with the Department of Justice and Equality, INIS and the GNIB as recently as today. The process for British passport holders coming into Ireland will be unchanged and will respect the common travel area. Non-EU citizens such as Americans or Asians are subjected to some questions when travelling here. They go into a non-EU queue and are asked the duration of their stay and where they are staying to establish whether they have the economic capability to remain in the country for the relevant period. British passport holders will not be subject to such questions. There will be a sign change and passports will be checked for validity and scanned, as they were before. We are confident of that.

The second part of the Senator's question related to refugees, asylum seekers and illegal immigration. These are people whose status the Garda or INIS are not satisfied with. They will sometimes present themselves without proper documentation or declare themselves to be refugees. All airports have passport checks before one leaves, where one is obliged to show a valid travel document and passport. These can sometimes be bogus passports, but we are not expecting a significant increase in those through the airports. It may be an issue in ports, but I can only answer for airports. We are printing leaflets in which we tell passengers not to panic because people are questioning whether they should books flights to the UK. We are concerned about the impact people panicking would have on businesses, aviation and tourism. The leaflet is headed "Do not panic in the event of a no-deal Brexit" and has six points. We also have frequently asked questions, FAQs on our website. To answer the Senator's question, we are not worried about the status of the common travel area.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I thank Mr. MacCarthy and welcome such a leaflet. It brings a mild laugh sometimes but that is where we are at. It is important to get that information out to the public at large.

Mr. Glenn Carr:

The Senator asked about the current infrastructure in Rosslare. As well as being the general manager for Rosslare Europort, I am also the general manager of rail freight for Irish Rail and I am often asked about the development of infrastructure for Rosslare. Rosslare Europort is a roll-on, roll-off port. We currently run freight trains into Dublin Port and Waterford Port. Waterford Port, which is in the south-east region with Rosslare and New Ross, is a lift-on, lift-off port. Rail connectivity and the movement of bulk or containers are more traditional with lift-on, lift-off ports than roll-on, roll-off ports. That is not to say that trucks or trailers could not migrate directly on to freight trains in the future, as happens in parts of Europe. I have been working with Waterford Port and Wexford County Council to promote the south-east region as an alternative to Ireland's tier 1 ports. It is very important that investment plays to each port's strengths. There is little point, from a business case point of view, in putting a railway connection for freight into Rosslare when a neighbouring port in Waterford already has that facility.

Investment in the lift-on, lift-off service should be developed for Waterford Port and investment for Rosslare should concentrate on roll-on, roll-off and some additional bulk. The two ports could then jointly bring together a mixture of service offerings in the intermodal section that could compete with Dublin or Shannon Foynes, the latter in essence being a collection of ports offering different modes of transport.

The other challenge for a rail connection from Dublin into Rosslare is that it is a single line passenger service which would require significant investment and upgrades in order to accommodate freight. We would have to double the track all the way to Dublin. We should also bear in mind that due to the M11 and N25 upgrades, road connectivity to Rosslare Port has been greatly improved, which has been very well received. People can now travel from Dublin to Rosslare in 90 minutes, where they might previously have spent 90 minutes caught in traffic on the M50 or trying to access a port in Dublin city. Rosslare Port should be seen as a release valve for Dublin. It will never compete with Dublin but it can certainly take away some of the current congestion in Dublin.

I mentioned earlier that one of Rosslare's advantages is its capacity. We can currently take in additional ships and have space to handle additional sailings. There is also land availability around the Rosslare region. Rosslare, Kilrane and Wexford need industrial development, and we can use the port as the gateway to drive that development.

Iarnród Éireann has committed to an initial investment plan of just over €25 million for the port. That will improve the length of berths and the size of ships which we will handle in future, additional quayside space and technology to move trade efficiently and seamlessly through the port. Our focus is on developing the roll-on, roll-off business and on working with Waterford and New Ross in developing the south-east region and those ports.

From the rail freight perspective, we are driving that agenda forward. There are plans to connect into Shannon Foynes Port. I believe the Port of Cork is now looking again at the possibility of rail connection. Particularly in the context of the climate action agenda, and the shortage of drivers in future as Mr. Flynn would say, we strongly believe that rail freight has a role to play alongside road freight. We currently operate about 1% of rail freight in Ireland. Typically across Europe it would range between 12% to 17%. We are putting a plan in place over coming years to help drive that agenda forward. It does require investment and significant movement of freight, which justifies the business investment. Currently, rail freight and Rosslare Europort operate on a commercial basis and must stand alone on their own feet in relation to investment and growing the business. There is no direct subvention into either rail freight or Rosslare. However, freight can benefit from the use of a track that is there for passenger purposes and can be used and developed on existing lines, particularly those connecting into major cities around the country.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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Mr. Carr can correct me if I am wrong but Rosslare port was ring-fenced under the legislation in 2015 where it remains in the management of Iarnród Éireann unlike the other ports which were transferred to local authorities.

I refer to warehouse provision. We are now talking about lean just in time, LJIT, systems rather than the just in time, JIT, system. There will be a need for warehousing. I understand there is land outside Rosslare which would avoid the 9 km tailback and do some customs clearance before arriving at the port. Is all that in train?

Mr. Glenn Carr:

The temporary border inspection post which is being acquired, and will be ready for 31 October, deals primarily with the clearance of imports into the country. If the UK leaves it will be a third country. We should bear in mind that we already trade with third countries. There is nothing new in the documentation; it is just the scale and amount of documentation that will present the challenge. One of the real advantages that we see for Rosslare it that our facility is just outside the port. That means we are in a position to discharge from the berths. For those who are red or green, in the event of a no-deal scenario, the red will present to the border inspection facility, which is outside the port. For those coming into the port, it is critically important that everyone has his or her paperwork in order. Post Brexit they will require a movement reference number, MRN, to book or travel on a ferry. The onus is on the transporter to ensure that the MRN is in order. One would not arrive at an airport without a passport and nor should one arrive at a port without the MRN documentation in place. To keep the ports moving and keep traffic moving, we will not allow trucks to enter the port without their MRN number in place. This has been widely communicated. The documentation can be uploaded quite well in advance. It is worth bearing in mind that in Rosslare Europort, as in Dublin, some 60% of trucks going through contain some sort of an agricultural or food product. Consequently, it is critically important that paperwork is in place to access the port, board the ferry and depart. Similarly for imports, the challenge will be on checks on agrigoods and food because of the scale of those checks. I was at the site on Monday and walked through it. It is well adequate to handle current and future additional traffic in Rosslare. Previously, Dublin was the only port which had that recognition as a border inspection post. Now that Rosslare has also been designated a border inspection post, traffic that currently could only go through Dublin can come in through Rosslare as an alternative. The other advantage of Rosslare is that it provides direct sailiings. Currently the market is waiting to see. The situation is very fluid with Brexit and the shipping lines are waiting to see its outcome. Our plans are not based on Brexit but on future growth. We see opportunities for direct sailings, purely based on current congestion in Dublin, Holyhead and elsewhere on the road. There is also a shift in traffic due to the shortage of drivers. Much of it is going unaccompanied. Ten years ago that market would have been 70% accompanied and 30% unaccompanied, where the market is now 70% unaccompanied and 30% accompanied. There is a need for more direct sailings to mainland Europe. We are working with ports to put together a package to attract shipping lines to avail of the connections from Rosslare to ports such as Zeebrugge, Le Havre, Rotterdam and so on. Rosslare port has a plan, with or without Brexit. We look forward to Rosslare growing and to delivering on the investment plan.

Photo of Ned O'SullivanNed O'Sullivan (Fianna Fail)
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I apologise to the guests for coming in and out, as I must participate in a constituency issue. I have followed as much as the debate as possible on the monitor. I wish to link in with Mr. Carr. I have a particular interest in the Shannon Foynes Port Company, having been a director for many decades. Mr. Carr referred mainly to Dublin and Rosslare but he did mention Shannon Foynes in relation to the rail connection. Am I correct in assuming that because of its western location, Shannon Foynes will not be impacted as much by the Brexit situation as the other major ports?

Another question, which is not as related to Brexit, but will Mr. Carr give a brief update on how he sees the rail link in Shannon Foynes developing? It is one of the biggest bulk cargo handlers in Europe. Much of it is hitting our roads and we hear anecdotes about ridiculous things, such as material being imported from Australia and being taken by road to the midlands for energy production. One would wonder where the gain is. Has anything real been firmed up on rail connection?

Photo of Neale RichmondNeale Richmond (Fine Gael)
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In order that Mr. Carr may prepare his answer, I will ask Ms Graham and Mr. Flynn to answer the earlier questions.

Ms Anne Graham:

Regulation (EU) 2019/501 ensures an extension of approval for cabotage in the Border region for six months after the regulation comes into force. Those dates have moved now that we are looking at 31 October. We expect those dates will be extended by the EU to cover cabotage for at least six months after the UK exits the EU. The EU has recognised that cabotage is an important part of cross-border services. We would expect that an agreement will put in place similar to the Alpine agreement between Switzerland, Italy and Germany, which allows cabotage across those borders.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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That was my question so I am delighted with that answer.

Mr. Aidan Flynn:

To paraphrase "Star Trek" the supply chain will go on but not as we know it. That is the reality of Brexit.

In terms of understanding of what we discussed about the complexities of the integrated supply chain, indeed for all-island trade, it is vital in terms of movement of people over and back across the Border, through importing raw ingredients or parts for goods that are then exported and so on. As Mr. Carr said, agrifood in particular will be heavily impacted upon by future arrangements, particularly in the event of a no-deal Brexit. Over 60% of goods consignments coming into the ports include some sort of food. The Department of Agriculture, Food and the Marine's advice to industry would be preferably to have one product, one load. The reality is that just-in-time logistics are reliant on groupage where operators would effectively describe having the kitchen sink on a trailer. Indeed there could be 200 or 300 products on the back of a trailer. The new environment requires them to have safety and security declarations that could cost €40 or €50 per declaration. The added cost to industry and business on that point alone is phenomenal.

I had a meeting today with insurance underwriters for carrier's liability insurance. Another complexity particularly for perishable goods would be significant delays at ports that are out of the control of the haulier. The new trading environment dictates that the haulier and the consigner or consignee need to have very robust partnership relationships, new contractual arrangements perhaps. All of these things should be forming part of the contingency planning. In the instance of a haulier being significantly delayed, it is easy to understand that perhaps the consignee would transfer responsibility for the load to the haulier and perhaps withhold payment for the delivery. They might say they could not accept it because it is perishable, there is a reduced shelf life and all that type of thing. These are realities where businesses need to build trust within their supply chain and have new types of conversations about the reality of the situation. Carrier's liability insurance does not necessarily cover that. Consigners need to have cargo insurance to be able to deal with those type of things. These are real issues that will inevitably arise because of all the multi-agency checks in terms of efficiencies.

As stated earlier, this is going to be a learning experience. One would expect that there would be a pragmatic approach taken for sure, but there are obvious issues. Colleagues of mine spent a day going over and back between Dover and Calais yesterday with a main shipping operator on a trial run. Some 10% of the throughput at Calais is Irish-registered business. It is significant. Calais is quite concerned at losing that business should the landbridge become unviable. As Mr. Carr mentioned, there is undeniable opportunity and we have submitted proposals under the realignment of the Mediterranean TEN-T proposal in terms of trying to link Irish ports with more continental ports. The other reality for the international haulage sector is that business may become untenable because there is an automatic shift from that landbridge to direct routes. They cannot put a driver on a ferry for 40 hours. It just does not work out. That is why there is a shift to unaccompanied transport and so on.

On customs and training, one of the great pleasures I had in the past couple of years was to be involved in a programme called the logistics associate apprenticeship. We are linked in with Technical University, TU, Dublin's school of management in Aungier Street as the lead proposer. We had 90 apprentices start the programme last week, 70 or so in Dublin and we have started it in Cork Institute of Technology, CIT. Customs is a module on the programme. Also very welcome is the clear customs arrangement where there is support for a significant five-day customs training programme. However, to become a customs agent or broker requires years and years of education. That is the quandary we find ourselves in as regards the aid and support we need for that.

Another issue concerning drivers is that we found 30% of international drivers do not hold Irish passports. That could create problems under the common travel arrangements in terms of accessing the UK. There could perhaps be additional checks which is of concern to us. Again as part of an operator's contingency plan, these are all real issues that need consideration. There are over 200 transport managers in Ireland who have a UK-issued transport managers certificate of professional competence, CPC, qualification. Those guys need to start the process of getting an EU or Irish-issued transport manager CPC so they can continue to fulfil their duties after the Brexit date.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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We import over 4,000 specific items from the UK and 2,900 of them can be sourced in other European countries, particularly Germany. That means we have got to put our thinking caps on when it comes to the future and where we will go if there is a Brexit.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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We appreciate that. I will hand over to Mr. Carr to address the question of Shannon Foynes.

Mr. Glenn Carr:

We are working through a study and detailed design for the reinstatement of the rail line to Shannon Foynes. That work, which involves Iarnród Éireann and Shannon Foynes Port Company, is under way. Hopefully, subject to funding and the business case, we might see it materialise. It is something that both parties would like to see happening. There has been good engagement also with the industry regarding that opportunity.

Brexit really has the most impact on roll-on, roll-off ports, particular those that are currently servicing the UK, typically Dublin and Rosslare Europort. Shannon Foynes, Waterford and, to a lesser degree, Cork, would not see the same impact as Dublin or Rosslare Europort.

Photo of Ned O'SullivanNed O'Sullivan (Fianna Fail)
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There is no firmer date as to when the rail link might go ahead. Are we talking in a year or further on?

Mr. Glenn Carr:

I would be reluctant to say a date. What is currently going at the moment is the financial analysis and the investment required. The design and required infrastructure to be put in has been assessed and it is just under consideration now with both parties on a joint approach on how that can be achieved.

Photo of Neale RichmondNeale Richmond (Fine Gael)
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I thank our guests sincerely not just for their detailed contributions and preparation but also for their responses to the very many queries. I apologise once again for the vote that interrupted the meeting. Such are the joys of democracy. Our guests have given us much food for thought, as they did in their previous interventions two years ago. We are in the most testing of times and I wish them all the best with their continuing work. I thank them for their continuing work in society and the industry as a whole. We will suspend briefly to allow our guests to leave. When we return we will be in private session.

The select committee suspended at 3.38 p.m. and resumed in private session at 3.43 p.m.

The select committee adjourned at 3.45 p.m. until 2 p.m. on Wednesday, 9 October 2019.