Timmy Dooley (Clare, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute on this Bill. In recognition of what the Minister of State, Deputy Michael Ring, has said, I believe it was helpful to bring the heads of legislation before the relevant committee. This gives us an opportunity to feed into the overall development of legislation, thereby expediting the legislative process and requiring less time on the floor of the House. It is a good use of the committee structure. In this case, we have had an opportunity to discuss many of the provisions and we expressed our views.

As the Minister of State said, the Bill will legislate for the key recommendations of the national ports policy, including the recommendation on ports of regional significance. The policy introduces categorisation of regional significance in Drogheda, New Ross and Wicklow ports and Galway and Dún Laoghaire harbour companies. The policy recommends the transfer of responsibility for these ports of regional significance to local authorities, and the Bill legislates for this transfer.

As the Bill is not prescriptive, there is not much to quibble about with the Minister of State. It just provides the legal framework for the transfer of the harbour companies. The actual transfer process is to occur at a later date under what we understand to be statutory instruments. I have some concerns about this. I often feel successive governments have overused statutory instruments. A lot of very important detail, which is what we should be discussing, must be dealt with. Therefore, I hope that in advance of publishing the statutory instruments, the Minister will facilitate discussion at a meeting of the joint committee, perhaps with the heads of a statutory instrument in draft form, in necessary, thereby providing us with an opportunity to feed into the process. As with any other matter of this nature involving a transfer of responsibility and assets from central government to local authorities, the devil will surely be in the detail.

Fianna Fáil will support this Bill through Second Stage. In principle, we support the transfer of responsibility for the regional ports and harbours to local authorities but the Minister needs to describe the transfer process in more detail in the House at a later stage. I would like a draft statutory instrument to be made available to the joint committee.

From my conversations with councillors and local authorities in the areas concerned, I believe there needs to be more consultation with councillors. The transfer process, while important, needs to be dealt with and councillors’ concerns need to be taken on board at an early stage. Currently local authorities are being left in the dark over the assets and liabilities their local areas and local taxpayers are to become responsible for.

If, as the Minister of State has sold it, the spirit of this Bill is to enhance local control and local democracy, he and the Minister will have to engage more fully with the local authorities and outline the measures they have talked about. The Minister has not engaged with local councillors or local residents on what the transfer of harbours to their control will involve, particularly from a financial perspective. It is important that consultation take place with residents because they see that the local property tax revenue is to be spent on local facilities, assets and infrastructure. Some concern was expressed to me by county councillors over the fact that, at some time in the future, they might have to explain to property-tax payers in their areas that the tax will have to be increased to meet some of the liabilities associated with such facilities and assets. This may not be the intention of the Government or Department so it is important to have consultation. In order to support this Bill on later Stages, the Minister needs to talk to local councils, and not just their executives, and he needs to involve the public through consultation.

As it stands, the Bill, in addition to the national ports policy, does not have any detail on the transfer of recurrent expenditures, liabilities and illiquid assets from central government or the harbour companies to the local authorities. It is on this matter that there is the most disquiet, as represented to me through local councillors. The Minister needs to clarify, in particular, that any assets being transferred will have a sufficient revenue stream to cover any known and potential capital costs associated with them. He needs to ensure local authorities and taxpayers will not wind up being saddled with debt as a result of financial mismanagement of harbour company projects and the absence of oversight by the Department.

There are a number of concerns about this Bill and the transfer of harbour assets and harbour or port companies to local authorities and a number of issues with both models of transfer, as they are currently designed in the Bill, that the Minister needs to address. Chief among the concerns of local authorities are the commercial viability of harbours and piers and, more particularly, the questions of what exact associated costs will have to be incurred by local authorities and how they will be met. The harbour assets to be transferred to local authorities are not liquid and not all harbours are revenue generating. As it stands, the balance sheets and books of several of the harbour companies are in the red. There are very significant capital costs that will be associated with maintaining harbours and it is unlikely that harbour companies will be able to generate enough revenue to cover large-scale capital costs of harbour maintenance, such as harbour dredging and the maintenance of harbour walls.

Any chief executive of a local authority or any councillor with whom the Minister of State engages – he keeps in close contact with them – will be well able to tell him there is no spare pot of cash that can be applied to any of the assets being transferred into local authority control.

It is important that a detailed schedule of the liabilities, future liabilities and current issues is made available up-front in advance of the transfer, that the transfer is based on some kind of agreement and that if agreement cannot be reached, there is some arbitration process that sees that there is an assurance that the local authority will not have to carry the significant costs that are talked about. We want the Minister to clarify what will happen if or when harbours being transferred to the local authorities from the Department cannot make their own way financially and cannot generate enough revenue to be self-sustaining. Since the exit of Stena Line, Dún Laoghaire Harbour has become largely a leisure harbour. It has very limited potential use as a transport hub and its future is really largely as a leisure harbour. It is now facing significant competition from Dublin Port, which it intends to enhance its facilities for that leisure market. This is a similar situation for all the harbours being transferred. The Minister has to recognise that there is no benefit to the local authorities in controlling harbours if they generate no revenue to cover their costs. Indeed, a worrying situation could raise whereby if they cannot generate revenue, local authorities and local taxpayers could be saddled with very significant debts as a result of this transfer. This is especially the case if revenue-generating activities of the harbour-port companies are not successful. It could be the case if projects undertaken by harbour companies to generate revenue, such as the urban beach in Dún Laoghaire, are unsuccessful. Many of these projects are shots in the dark and could wind up carrying very significant costs to the taxpayer, especially if they are not undertaken with due diligence.

Corporate governance and financial oversight of harbour companies are important aspects that need to be considered in some detail. If a harbour is transferred to a local authority under transfer option 1 - the transfer using ministerial shareholder in the harbour company to the local authority - the local authority will take over responsibility for approving corporate plans for the harbour companies. At present, a harbour-port company requires ministerial approval to undertake largescale projects. Upon transfer, it will be the local authorities that become the sole shareholder in the port company and ministerial approval will no longer apply. Instead, those issues will be addressed within the company's memorandum and articles of association, with the oversight functions being specified as agreed between the company and its new shareholder, ie the local authority.

Currently, there are very significant questions over corporate governance in Dún Laoghaire Harbour Company. For example, a letter from the Department in July last year that was given to us under FOI highlights concerns at the approach adopted by Dún Laoghaire Harbour Company in recent years in respect of not meeting corporate governance standards. Among the nine State commercial port companies, issues have consistently been brought to the Department's attention in respect of actions taken, or not taken, by Dún Laoghaire Harbour Company. There is justified concern among councillors who feel that the Government is attempting to pass the buck, hand them the hot potato and leave them in the unenviable position of trying to deal with a situation that was not within their control. They must now deal with a rather difficult and fractured situation over which they really have no control. The councillors I have spoken to would like to see all outstanding issues addressed or the appropriate contingency plans put in place to deal with any potential fallout that might arise from what are effectively ongoing concerns and issues, particularly in the area of corporate governance. There are a number of concerns about Dún Laoghaire Harbour Company. In particular, its board has repeatedly failed to seek ministerial consent for activities prior to their commencement such as the development of construction projects to generate revenue from the harbour area, examples being the urban beach and pool. FOI requests highlight continued concerns over the short and medium-term sustainability of the harbour company as a whole and cast doubt on the financial viability of its corporate plan for generating revenue. These concerns surround the sustainability of the company's corporate plan and involve potentially very large sums of money, including a €50 million diaspora centre, a cruise liner berth with a price tag of €15 million and a €2.5 million urban beach. In all cases in the past, our FOI requests have revealed that the Department has pointed out that revenue returns projected for these projects appear to be extremely optimistic. That is the basis of the concerns of members of the local authority.

There is a number of concerns about the oversight role over harbour companies that the local authorities will have to take on following the passage of this Bill. Given the potential corporate governance issues that have come up in the past, it is essential that there is proper financial oversight of the harbour companies. We have concerns over whether local authorities have the resources and expertise to undertake the required oversight of corporate plans for revenue generation that are submitted by the harbour companies. The Minister simply cannot rush ahead in transferring these harbours without ensuring that local authorities have the resources, expertise and mandate to provide a robust oversight of these harbour companies. There is a real risk that they will not have the necessary resources, expertise and mandate and that corporate plans will not receive the adequate level of scrutiny and oversight they would received via the Department of Transport, Tourism and Sport. One would expect the Department to have the kind of expertise available to it that, in many cases, local authorities will not. There is an added cost involved in availing of such expertise. It is unlikely that local authorities will upskill internally because this would be an exceptionally costly option and a long-term commitment so we are back to the age-old issue of hiring external consultants, be they in engineering, financial management or financial planning. This brings its own costs and could have a potentially devastating effect on the balance sheets of local authorities, which may ultimately fall upon local taxpayers. This is why I spoke at the outset about some level of engagement with local communities as the Government seems to be more concerned with ensuring there is a greater level of taxes paid locally for services delivered locally through the property tax. The Minister has not addressed these concerns. We need to know the level of oversight the Department will retain over large projects that are undertaken by harbour companies, such as Dún Laoghaire Harbour Company.

I would welcome any views based on what I have said and if they could be taken back to the Minister. Perhaps they can be addressed as we move to the next stages. The issue I am particularly concerned with is not just the framework but the detail of the transfer to be done through secondary legislation. I would like us to get a commitment that the committee's involvement in that will be central and that it will be done either through the issuance to the committee of a draft of such instrument or through what might be referred to as the heads. I do not mind what it is called as long as we get some level of input into it.

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