Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I do not believe Deputy Pringle will be attending the debate. I am not yet sure if Deputy Coppinger will be attending but I will fill up the half an hour if necessary.

I am very happy that we are speaking about harbours. Many issues need to be looked at. My particular knowledge in this area relates to Dún Laoghaire Harbour, but I suspect that the issues that arise for Dún Laoghaire have implications for how the harbours of regional significance that are designated in the Bill should be governed.

As well as making some general comments, I intend to focus much of my contribution on specific concerns about what the Bill means in broad policy terms for Dún Laoghaire Harbour and also some very serious issues of what I believe to be corporate misgovernance in Dún Laoghaire Harbour over recent years which the provisions of the Bill simply will not address. Even though it may present itself as attempting to address these things, I do not believe it will succeed in doing so.

I will try to be positive initially. As a general principle it is good that these ports should come under the control of local authorities. That is a positive development and something for which we, in Dún Laoghaire, have campaigned actively for reasons I will outline. Dún Laoghaire Harbour Company has been a law unto itself. Nominally under the remit of the Department of Transport, Tourism and Sport in reality on a day-to-day basis it is run by a semi-State quango that is not accountable to anybody. It is certainly not accountable to the public in Dún Laoghaire, nor to the local elected representatives.

In so far as I have submitted parliamentary questions asking about what is going on in a range of areas in Dún Laoghaire Harbour, the fairly standard response I get from the Minister is that it is an operational matter for Dún Laoghaire Harbour Company and all questions are referred to it. That is bizarre and unacceptable. If I ask the Minister questions about what I believe to be very serious matters of misgovernance and poor policy in the harbour company and he refers them to the people that I hold responsible for that misgovernance and bad policy, it is a bit of a joke.

To move from that to having at least the possibility of genuine local democratic control of a harbour, in this case Dún Laoghaire Harbour but it could be any of these harbours of regional significance, is a move in the right direction. The problem is that the Bill offers two options for how that might happen.

Option one is that the harbour become a corporate subsidiary of the council but with the existing company structures staying intact. Option two - the one I believe we should take - is dissolving the existing company structures and bringing the harbour directly under the control of the council. It would become a department of the council and, by extension, the councillors, the elected representatives, would have real control over the policies pursued by the harbour and all governance issues to do with its management and operation. If we go for option two and not option one, the elected representatives, not the unelected executives, would have real power over the key issues of policy and governance.

The Dún Laoghaire council executive and the existing executives of Dún Laoghaire Harbour Company favour the corporate subsidiary model. In so far as I can get soundings from the Minister for Transport, Tourism and Sport, although he has sort of said it is up to the council, the opinion on the Government side seems to be leaning towards that model. I totally disagree with this for general and specific reasons.

The general reason is that it would hasten the ongoing and creeping privatisation of the harbour. Those in other harbours can speak for themselves. I do not know what the situation is in other harbours of regional significance in the same detail. In Dún Laoghaire Harbour the corporate subsidiary model, whether, as is the case now, under the nominal control of the Department or, as the Bill would allow for, under the nominal control of the council while retaining the existing corporate subsidiary company structures means that it would continue to be a law unto itself and have a narrow for-profit mandate which would push it in the direction of privatisation. A harbour, certainly in the case of Dún Laoghaire, has to be seen as an integral part of the town and the region as a whole. The idea that it should be isolated from the town and the region and have its viability and future development determined not by how it contributes to the town and the region but by the financial imperative to turn a profit or wash its own face economically fails to recognise that it should not be treated as an isolated entity. It has to be seen as a vital piece of infrastructure for the town and the region. If it is isolated by its structure, the pressure is on to commercialise it to make short-term profits or maintain short-term commercial viability.

Connected to this, if it were to be done in that way, the decisions on how to govern and operate it and maintain its viability would be taken by a group of people not accountable to anybody. I do not think what is being proposed will make them much more accountable. There is some tokenistic stuff in the Bill about chief executive officers, CEOs, being brought in front of the Oireachtas Joint Committee on Transport and Communications or the local councils, but the real power would still rest with the company executives and they would make the decisions, perhaps in conjunction with the CEOs of the councils. The problem is that this has been happening. This option would not change it one iota.

Let me give some examples. One big issue in Dún Laoghaire has been the Dún Laoghaire Baths which are situated just beyond the boundary of Dún Laoghaire Harbour. The people have been campaigning for 25 years to have the baths rebuilt on the same site, in the area controlled by the council. Initially, it proposed madcap plans to build apartments, which proposals were shot down because of mass protests. The people demanded not only that we should not have apartments but that we have a swimming pool. Although the proposals for apartments have been knocked off the agenda, we are not getting our swimming pool. The council claims it does not have the money to give us one at the site of the baths. Strangely, however, Dun Laoghaire Harbour Company is proposing to pay out €3 million for a floating swimming pool on a barge which it is going to buy from Germany to be put inside Dún Laoghaire Harbour. It is bizarre. The people will not have the pool where they asked for it; instead Dún Laoghaire Harbour Company will spend €3 million in giving us a barge. Half of that money will be contributed by the council, but it will all be under the control of a corporate subsidiary. What the people have asked for has been dismissed; instead this corporate subsidiary, in a cabal with senior executives in the council, has decided not to give them the pool where they asked for it but will provide this thing inside the harbour which potentially will be damaging for the harbour because it is talking about building new structures on the East Pier. Even Owen Keegan, when he was the manager of Dún Laoghaire-Rathdown Council, said it probably would not be economically viable. Most think it is insane to put a barge which was intended to be used on a canal in Germany inside the East Pier of Dún Laoghaire Harbour. It is madness and will not work, but the harbour company is doing it because of its desperate attempt to sustain the financial viability of the harbour. This is a madcap gamble and wasting our money, but we have no control over it. If we did not have separate governance for the harbour and the areas controlled by the council which are within a stone’s throw of each other, we would make a rational decision. The decision would not be based on the short-term financial crisis facing Dún Laoghaire Harbour Company but on what the people asked for and the harbour would be seen as part of the town. Wrong, stupid and inappropriate decisions would not be made just because the harbour company had short-term financial issues. It would all be part of an integrated whole.

The other serious example relates to the controversial issue of the cruise berth. The corporate subsidiary allows for our new friend - off-balance sheet financing. The harbour company proposes to borrow €18 million to build a giant cruise berth inside Dún Laoghaire Harbour to bring in giant cruise ships. I have no problem with cruise ships coming into Dún Laoghaire Harbour; small ones already come in. The big ones anchor outside the pier. There is no problem and passengers come in on little boats. Borrowing €18 million, however, to build a giant cruise berth, where the decision to borrow the money is taken by a corporate subsidiary, over which we have no real control, is financial madness.

It will lead to very serious damage and destruction to Dún Laoghaire harbour and will lead to the privatisation of the harbour.

What do I mean by that? First, Dublin Port has just got planning permission for a giant cruise berth, so it is competing for the same business and it already has most of the cruise berth business. For the Dún Laoghaire Harbour Company proposal to be viable, it would have to take most of the business that is now going to Dublin Port from it and bring it to the Dún Laoghaire. That is madness for a start. Dún Laoghaire Harbour Company is going to spend €18 million in trying to bring in this business and take it from Dublin, when Dublin Port has just got planning permission for a cruise berth and is itself planning to bring in all the business. Something has to give. One or other will not be financially viable, and it will almost certainly be Dún Laoghaire.

How is Dún Laoghaire going to finance this and what collateral will it put up to borrow this €18 million on a madcap gamble that will almost certainly not work? The answer is that it is going to build apartments. In a masterplan which is widely derided and opposed by the people of Dún Laoghaire, Dún Laoghaire Harbour Company spent some €140,000 on consultants for a masterplan to build hundreds of apartments inside Dún Laoghaire harbour, something that is utterly opposed and that would effectively privatise sections of the harbour. In the document relating to the cruise berth, the harbour company states that the financing of the berth is contingent on the apartments. Therefore, to get the cruise berth, we have to get the apartments, which will privatise that section of the harbour. They will become exclusive, millionaire apartments and the area where they were built will then be off limits to the public in a public amenity harbour. Furthermore, if the scheme collapses who pays for it? The company will have to privatise further or else the council, where the elected representatives have no say in these matters or these borrowings, might have to pick up the tab. In fact, it will have to pick up the tab, possibly through increased property taxes, even though it will have no control over it. It is madness but the corporate subsidiary model allows this to happen, in fact it actively encourages it to happen.

Another example brings us into the area of governance issues. In recent years the harbour company executives set up a new company, the Irish International Diaspora Centre. Under the Harbours Act, if a harbour company sets up a new company, it is supposed to get permission from the Minister. The harbour company did not get permission from the Minister yet it set up a new company to develop the diaspora project. Let me make it clear that I am in favour of such a project. What we need in Dún Laoghaire harbour is a diaspora museum, not apartments or a cruise berth. This would be a very good, sensible investment. However, the setting up of this company was done without reference to anybody in a situation where ministerial consent was required but was never obtained.

In questions about this to the Minister, I asked how the executives could set up a company that does not have ministerial consent. The Minister said he told them it needed ministerial consent but it seems they just ignored it, and the Minister did nothing about that. That company has some €200,000 in what appears to be two salaries, yet it has never traded and has no share capital, so where is the money coming from? The money is coming from the harbour company. However, the harbour company is supposed to be required to have ministerial consent to set up a company. In this case, this company has not got that consent, but people who are in this company were being paid salaries. Apparently, that company has since been wound up. Where is the oversight? Who paid that €200,000 for a company that has now been wound up, with the result that no diaspora museum is going to appear? This is unbelievable but it is allowed to happen under the corporate subsidiary model.

We then get into the really serious corporate governance issues. Since getting elected to the Dáil in 2011, I have asked between 75 and 100 parliamentary questions about these matters and matters to do with expenses, salaries and unexplained payments to executives and I have got the run-around for several years. I will give some examples. A former director wrongfully claimed €40,000 in expenses for flights from Dubai to attend meetings in Dún Laoghaire Harbour Company. We were told many years back, when I raised this question, that this €40,000 would be chased down but it was not. In successive questions about this, I was told by the Minister that legal proceedings were being taken to pursue the money. That was to fob us off. In further questions, I kept asking what was happening. I asked whether the legal proceedings had started, whether I could have the number of the court case and so on. Then the Minister told me that there are no court proceedings. We were told by the Minister, on foot of what he was told by the CEO of the harbour company, that there were legal proceedings but when I ask for the details of those legal proceedings or the case number of the court proceedings, I find there are none. Either the Minister was misled or he misled us. Then it turns out that legal proceedings are not court proceedings, and that there are some other legal proceedings, which are not court proceedings, to pursue this €40,000, which we were told several years ago was going to be recovered and which everybody acknowledged should never have been paid out. Nobody is pursuing it. There are no proceedings.

This is allowed to happen by a Government that says it is serious about governance, corruption and all that sort of thing. Why was there no effort? Instead, we just got statements like, "I am referring it to the harbour company". It is the harbour company against which we are making the allegations. Of the people who are on the audit committee that allowed this to happen, one has been appointed the new chairperson of the harbour company, although it is that committee that passed all of this.

The other thing it passed was an extraordinary payment two years ago of €20,000 to the current CEO. At the time, in an answer to a question I put, he said he got this €20,000 in lieu of holiday pay. That is against the law, in particular, the Organisation of Working Time Act. I put this to the Minister, who said that, yes, he accepted that the payment should not have been made. He contacted the harbour company and it came back and said it was an exceptional circumstance. That was it. It was just let go. The most recent reply was that it was an exceptional circumstance. According to the Organisation of Working Time Act, however, the CEO paid himself money that is not allowed under the law, and the Minister has been aware of this and is not doing anything about it. If this Bill is passed and if the favoured model of the corporate subsidiary happens, that same CEO will still be the CEO under the new model, and the same kind of thing can continue. We will get the same kind of response when we put questions about corporate misgovernance and unexplained payments that may be in breach of the law or illegal, and that possibly should be the subject of criminal investigation. We will get the run-around. All questions are referred back to the very same people against whom the allegations are being made. This is totally unacceptable.

There is then the universal issue. This CEO is getting paid €136,000 a year, plus some €20,000 for a car, plus, in that case, unexplained payments. This company has 12 front-line employees, yet he is getting more than a senior Minister. When we add in his pension contributions, the total amount is about €188,000 a year for a company with 12 employees that is being run into the ground. This is totally unacceptable and it needs to be investigated. When one takes the combined total of directors fees of €12,000 for each director per year, other executive salaries, the CEO's executive salary, pension contributions, extra payments and so on, we estimate the total is about €600,000 a year, and this will continue in a company which is in a financial crisis. If we dissolve the existing company structures, that is €600,000 saved a year.

The front-line workers who actually do a job can be transferred over to the council under existing conditions, which is absolutely right and proper. However, those who are feeding out of the honeypot and milking it dry, who have helped run the harbour company into the ground and are accountable to nobody, will continue. That is utterly unacceptable.

These matters need to be looked into. Serious vigour is needed in pursuing them. As the Bill is currently framed, however, in the option that it provides for the governance of these harbour companies, it will be allowed to continue. That cannot happen. It is an utter waste of money, in this case more than €500,000 a year. Mad decisions are being taken and will lead to the privatisation of the harbour. There is no sense of how we might develop the harbour in a democratic way with real public oversight in order that it would contribute to Dún Laoghaire town, which desperately needs help and is in real trouble in terms of small businesses and so on, or to the wider region. The harbour authority is being allowed act as a law unto itself with the connivance of some of the senior, unaccountable, unelected officials in Dún Laoghaire-Rathdown County Council.

I will be coming back to all this on Committee Stage, when I will be proposing amendments. Perhaps the Minister of State would take these issues on board and delete that option. The harbour should be brought directly under the control of the elected representatives on the council. We should get rid of this parasitic group of hacks and cronies who have run Dún Laoghaire Harbour into the ground and engaged in serious misgovernance.

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