Michael Ring (Mayo, Fine Gael)
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I move: "That the Bill be now read a Second Time."

On behalf of the Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, I am pleased to introduce to the House the Harbours Bill 2015. The Bill results from the review of ports policy which began in 2010 and culminated in the publication of a new national ports policy in 2013. The primary purpose of the Bill is to provide the necessary legal basis to allow for the later transfer by ministerial order of the five designated ports of regional significance to local authority-led governance structures. Every Deputy is aware of just how important our ports are to our island nation. The Competition Authority estimates that ports handle around 84% of all our merchandise trade in volume and about 62% in terms of value. The ports are, simply, critical to our ability to trade with the rest of the world.

Our ports face challenges to ensure they are capable of meeting the modern needs of the economy and the nation. These challenges are nothing new as throughout history the fortunes of individual ports have ebbed and flowed in response to changes within ports and the shipping industry. Currently, there are nine State commercial port companies operating under the Harbours Act 1996. Their status is that of a State-owned private company the shareholders of which are the Minister for Transport, Tourism and Sport and the Minister for Public Expenditure and Reform. The companies are guided by a board of directors appointed by the ministerial shareholders and managed by a chief executive officer answerable to the board of the company. Additionally, we also have Rosslare Europort which differs from the other ports as it does not operate under the Harbours Acts but is instead a business unit of larnród Éireann. Within the nine State port companies there is enormous variety. As an example, in 2014, Dublin Port handled 21 million tonnes and 7,000 vessels, while at the other end of the scale Wicklow Port handled 94,000 tonnes and 56 vessels. It is clear that different ports perform different functions and service different markets. National ports policy recognised these differences through providing a clear outline of the Government's strategic vision for the sector by categorising it in three tiers.

The tier 1 ports of national significance are Dublin, Cork and Shannon Foynes. Collectively, these three ports handle over 80% of all tonnage handled in Irish ports in any given year. All three have ambitious development master plans and earlier this year the Minister, Deputy Paschal Donohoe, launched the first phase of the Shannon Foynes development, its east jetty project, while both Cork and Dublin ports have just recently received planning permission from An Bord Pleanála for their projects in Ringaskiddy and the Alexandra Basin. The expected total outlay on all these projects is over €350 million and all will be delivered without any Exchequer contribution. The Minister was delighted to learn recently that all of the projects had qualified for EU funding through the trans-European transport network, TEN-T, programme and its related Connecting Europe Facility, CEF, funding stream.

The tier 2 ports of national significance are Rosslare Europort and Waterford Port. These ports together handle approximately 7% of total tonnage. Importantly, both offer competition to the bigger ports in the economically significant unitised LoLo and RoRo trades. Both are well positioned in terms of their ability to service direct routes to the Continent and are well connected to the national rail and road networks.

The ports of regional significance are the remaining five State port companies. They are Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow ports and any other port which handles commercial freight. These are the ports which are central to the Bill. Collectively, they handle approximately 4.5% of total tonnage, which represents a decrease of over 30% in their collective market share when compared to 2000. Within them there are individual, very different stories, with some quite dramatic decreases in commercial tonnage in Dún Laoghaire, New Ross and Wicklow, with much more modest decreases or even steady State developments in Galway and Drogheda. The Government recognises that there are those with particular interests who may question the need to make any change to the status quo. However, at a national strategic level, we need to be clear on which ports are fundamentally important for national competitiveness and regionally significant.

The approach adopted by the Government is broadly accepted by all as common sense. The Oireachtas Joint Committee on Transport, in its review of the Bill, stated its overall purpose was broadly supported by the committee. In respect of the ports of regional significance, national ports policy recognises that the five ports continue to play an important role for their regional hinterland. However, this role is not one that requires central government oversight.

In line with the Government's reforms in the area of local government generally, responsibility for the oversight of these regionally significant ports should be devolved to the most appropriate level of government, that is, the local authorities. This devolution of responsibility will allow the ports to continue to develop as required by their regional economy and in tandem with their regional community. The change in perspective will enrich and enhance their future development. It better aligns the needs of the local authority, the regional economy and the port. For some of the ports, the requirement that a separate statutory company should oversee and manage the port may no longer be appropriate. The Department of Transport, Tourism and Sport has funding available for local authorities for a due diligence exercise in respect of all five companies. The results of these exercises will inform the eventual model of transfer chosen for each port. The Bill is flexible enough to allow for either the continuation of the existing company and a transfer of the ministerial shareholding to the local authority or for dissolution of the existing company and a physical transfer of all assets, liabilities and employees to the local authority.

The main provisions are found in Parts 2, 3 and 5 of the Bill. Part 2 deals with the first of the two possible transfer methods, that is, a transfer of shareholding in the existing company. Section 8 provides the actual power to transfer the shareholding to a port company. Any order under the section will be made by the Minister for Transport, Tourism and Sport with the consent of the Minister for Public Expenditure and Reform, as the other current shareholder, and the Minister for the Environment, Community and Local Government.

Section 9 provides a potentially interesting new dynamic for the commercial ports sector. It allows for the local authority chief executive, subject to the consent of the elected members of the council and the Minister for Transport, Tourism and Sport, to consider a divestment of shares in a transferred port company to the private sector. However, it ensures continued public ownership of the port through limiting any such disposal to 49% only of the shares in the company. This represents a new potential method of sourcing funds for future development for the transferred port companies. It is not currently a feature of the sector.

Section 10 provides for a general ministerial power of direction to the transferred port companies in respect of the national ports policy. The section requires the Minister for Transport, Tourism and Sport to consult the Minister for the Environment, Community and Local Government and the chief executive of the local authority concerned prior to issuing any such direction. The requirement for consultation addresses a concern identified by the Oireachtas joint committee with regard to its potential unilateral use and possible interference in a particular company's operations. The section restricts the use of the direction to general policy issues only; it cannot be used to direct a company to act in a particular manner in a particular instance.

Sections 11 to 27, inclusive, lay out the administration of the transferred companies under the new local authority shareholding arrangements. The Harbours Act will continue to apply to any company that transfers under the transfer of shareholding model. However, as the Acts contain several explicit provisions relating to the ministerial shareholding, the sections require amendment to reflect the fact that the shareholding has transferred. The exercise of these shareholder functions will primarily be a matter for the local authority chief executive, but the Bill also provides for a number of important oversight functions for the elected members.

Section 11 lists 17 sections of the Harbours Acts that will no longer apply to a transferred company. These sections are those requiring an active role for the shareholders in consenting to something. Obviously, since the shareholding has changed, these sections can no longer apply and amended versions are instead included within sections 13 to 27, inclusive. Many of these sections are routine in nature such as section 14 which requires any change to a transferred company's memorandum and articles of association be approved by the relevant local authority chief executive. Therefore, I will focus my remarks instead on a number of the more substantive sections, as well as on the role of elected members generally in the oversight of the transferred companies.

In instances where the transfer of shareholding model is chosen as the transfer method, the company structure remains in place as it applies today. One important consideration in the model is to ensure the appropriate balance between the commercial freedom of the company and democratic oversight. The Bill achieves this balance through providing for a number of specific oversight functions for elected members of the council. First, section 23 requires the chairperson and the chief executive of a transferred company to appear before the elected council, if invited, to account for the administration of that company. Second, there is a provision within section 22 for any proposed chairperson of a transferred company to appear before the elected members prior to formal appointment. This mirrors the current practice of prospective chairpersons appearing before the Oireachtas joint committee, a practice which the Government introduced and which has proved its worth in allowing elected representatives to quiz prospective chairpersons on their vision and ambition for the company in question.

Section 19 requires the annual audited accounts of the transferred company, accompanied by a report on the year generally, to be laid before the elected members. While it is a matter for the relevant local authority, there are obvious potential links between the submission of the accounts and the power of elected members to require a chairperson and the chief executive to appear before the council under section 23. I have already stated the consent of the elected council will also be required where any disposal of shares in the transferred company to the private sector is envisaged.

In the case of board appointments to the transferred companies, the Minister for Transport, Tourism and Sport is clear in his view that the improvements to the board appointments process generally must apply to any transferred company also. Therefore, section 22 mirrors the improvements introduced in section 39 for those companies remaining under ministerial shareholding. Directors will be selected through the State board appointments process which the Minister for Public Expenditure and Reform launched in February. The Bill requires that certain skill sets be present on the board, including maritime transport, financial, legal and commercial skills. It also indicates a further set of skill sets that might be considered for board level representation such as infrastructure planning or environmental management.

The local authority chief executive will formally appoint the persons recommended by the Public Appointments Service. The maximum length of total service of any director will be limited to ten years. This will allow for the development of board level experience, as well as provide the required fresh thinking, which is a necessary feature of any board. The central oversight of the Department of Public Expenditure and Reform of board fees will be maintained. As is the case today, the chief executive of a transferred company will be appointed by the board of the particular company after consultation with the local authority chief executive. The central oversight of the Department of Public Expenditure and Reform of terms and conditions of chief executives will be maintained.

These are the key issues addressed in Part 2, but the Bill also provides for a second transfer method within Part 3. This model is called "transfer and dissolution of companies" and outlined in sections 28 to 33, inclusive. Essentially, the sections are based on existing precedents generally and provide for the break-up of the company as a corporate body and its complete integration within normal local authority structures. The port would be administered as any other functional area of a local authority. All employees would transfer to the service of the local authority, as would all property, assets and liabilities of the company. The Bill provides for the continuation of harbour and pilotage limits.

Part 5 runs from section 37 to section 49 and generally comprises technical amendments to the existing Harbours Acts that are being made on foot of submissions made during consultation or experience gained in the years since the last amendments were made. There are, however, three important elements of this Part of the Bill that further improve the overall corporate governance culture within the ports sector. Section 39 amends the board appointments process through, for example, introducing mandatory skill sets and introducing an overall term limit of ten years.

Section 40 introduces a new statutory provision regarding the accountability of a chairperson and the CEO of a port company to elected representatives. The section requires the chairperson and the CEO to appear before the Oireachtas joint committee if invited to do so and account for the administration of the port company.

Section 42 extends the current prohibition on Members of the Oireachtas and MEPs serving on the boards of port companies to include councillors. This will apply equally to those companies the shareholding of which remains with the Minister and the shareholding of which transfers to a local authority shareholding model. National ports policy is clear that the boards of port companies must comprise individuals with the necessary skills required in any commercial company. The Bill is legislating for that very fact in sections 22 and 39. There have been instances where councillors serving on port company boards have had to absent themselves from discussions at board meetings and also from council discussions on topics owing to potential conflicts of interest. When people elect their local representative, they obviously do not want to see his or her contribution to local democracy restricted in such a manner.

As Deputies can see, the Bill is an important step in the development of the commercial ports sector and an important contribution to the further devolution of responsibility from central to local government. The changes it introduces will enhance the ports' role as centres of their regional economies, deepen the economic development role envisaged for local authorities and improve the corporate governance and democratic accountability of the sector overall. The ports sector is an unsung hero of the economy. Without it, we simply could not trade with the world and many of the everyday items we take for granted would not be available. The amendments the Bill proposes on board structures will enhance the corporate performance of ports and ensure they will continue to fulfil their vital role as facilitators of the economy.

The Minister, Deputy Paschal Donohoe, and I look forward to hearing the views of Deputies on this important Bill and sector. We hope the objectives of the Bill will enjoy the support of the House, just as the Bill enjoyed the broad support of the Oireachtas Joint Committee on Transport and Communications during its scrutiny. I commend the Bill to the House.

Timmy Dooley (Clare, Fianna Fail)
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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.

Séamus Kirk (Louth, Fianna Fail)
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I am glad to have the opportunity to speak about this important legislation as it applies in my constituency. Drogheda Port Company is named here as a port of regional significance. It is clearly intended that it will be catered for under this framework legislation. As Deputy Dooley, our spokesperson, has clearly intimated, the exact detail of how the changes will be implemented will come at a later stage. I would have thought that particularly on Second Stage, there was a need for some spelling out of how the envisaged structures would be put in place.

Due to its location and its close proximity to Dublin, perhaps the expansion and development of Drogheda Port has not materialised at the pace one would like to see. I have a few questions. There are really two local authorities in respect of Drogheda Port - Louth on one side of the river and Meath on the other. Will the port be transferred to one or the other or will it be a joint venture between the two counties? What sort of discussions have taken place with the management of the respective local authorities about the transfer?

Are the local authorities happy about accepting responsibility as envisaged in this legislation? Are they unhappy about it? Are some local authorities in such a difficult financial position that the addition of responsibility for ports to their financial demands would create further woes for them down the road? It seems that this is an issue that needs to be teased out.

Anyone who has been in the political arena for some time will realise that water infrastructure is expensive. I refer to the Drogheda situation where the capital expenditure was quite substantial for the repair of a harbour wall. Under the new arrangements, who will foot the bill for this type of work? Will it be the new port company structure or the local authority? Will the Department supply grant aid and support?

I refer to the silting up of the shipping lane. Every three or four years it is necessary to bring in the dredger at significant cost to ensure the shipping lane is clear of silt. If the harbour silts up, the weight and volume of ships that can use the port is considerably reduced.

It is a matter of looking at the new concepts and deciding whether they are self-sustaining. In the medium and longer term, will the ports be able to generate the revenue that will ensure their sustainability? Will subvention be required from the local authority or from some other source? This is a question that needs to be answered at this time.

A further query arises with regard to the Drogheda situation. If it is decided to proceed with a new port development along the east coast, bearing in mind the movement of population into the province of Leinster, in particular, in the greater Dublin area or in counties Meath, Louth or Kildare, could a change in population require increased port capacity development along the east coast? In that case, Drogheda would be an obvious place for that development. If such a development were to be undertaken, who would finance such a large project? Would it be the responsibility of the local authority or of the local authority combined with the relevant oversight Department? I acknowledge that the secondary provisions in the Bill will cater for much of this work but it might be useful at this time to inform the House what would happen in those circumstances.

I refer to the business planning model for the various regionally significant ports. If particular models or variations of business models have been assembled, these would be very useful for the enlightenment of the discussions between the Department and the local authorities who will be taking responsibility for the ports. I presume the issue of corporate governance will be dealt with in the statutory instruments and secondary provisions. How will suitably qualified people be chosen for appointment to the board? Will qualifications and suitability for board membership be decided on the basis of commercial experience in the port or on the basis of some previous experience, knowledge and involvement as a member of a local authority? These are the questions that need to be answered. It would be very useful to have some indicative answers at this point. Perhaps the Minister of State would address these issues in his concluding statement.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister of State for his opening remarks. This is a very important Bill. Harbours are an important part of many coastal communities in our country. They provide for recreation and commerce and they are a major asset in attracting tourism, especially for an island economy such as ours. Many cities and towns depend almost completely on their harbours for their economy. This is not the case in most Irish harbour towns but it does underline the value of a harbour to local economies. If best utilised, they can be an engine for growth and a sustainable source of good employment. Access to the sea brings many opportunities to a town or city, but it also brings the challenge to maintain that opportunity and to grow it. In too many cases, harbours have been allowed to go to rack and ruin and so too has the local economy. A harbour policy must have at its core a drive to maximise the potential of our harbours, to support and encourage growth and job creation and to do so in a sustainable and environmentally sound way which incorporates all the local community in decision-making. In this regard, the Bill may be taking a step in the right direction but, unfortunately, it falls short at an important hurdle, thus rendering the Bill's provisions much less powerful and positive.

The Bill empowers only local authority chief executive officers and provides little or no democratic oversight of the harbours by local councillors who are the people elected to make the decisions for their community. The CEO is unelected and, in too many cases, is utterly unaccountable. He or she often has his or her own agenda which can run contrary to the mandate of the council given by the local community in democratic elections.

Studies by the OECD and general experience have shown that councils are efficient and effective at managing and overseeing local services. This is because they have the local know-how and expertise to make it work and to complete the job in hand. They also have the support of the public. They have inbuilt mechanisms for engagement with the public as well as being accountable. This does not always work perfectly, but certainly our local authorities and our councillors are much more accountable than those in the corporate world who only care for the bottom line and their shareholders. I strongly believe that democratic oversight is an important ingredient in finding success in the management of our harbours but also in ensuring success benefits the wider community which will last for generations. However, this Bill does not aid this aim and it requires significant amendment to place democratic structure central to the management and direction of our harbours.

The Bill seeks to move the control of five harbours, at Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow, into new governance structures. This Government is claiming the control will now be handed to the local authority but, in reality, control will rest with new bodies established by the chief executive officers of local authorities and will have little, if any, democratic oversight. The legislation will give the CEO a number of powers without any accountability to the councillors of the local authority. The CEOs of the relevant local authorities will nominate two new directors to each harbour without consultation. The decision will most likely be rubber-stamped by the Minister without any consideration by the relevant Oireachtas committee.

The Bill empowers the CEO, with council consent, to dispose of the shares in the harbour company. I welcome that there is council consent required, but the disposal of such lands, which might be important to the wider ports strategy, must be handled very carefully. The CEOs will be able to alter unilaterally the memorandum and articles of association of the harbour company. This could have far-reaching effects on the harbour company involved and requires no consultation with or consent of the council. This is too great a power to have in just one person’s hands. A decision to change memoranda or articles of a company should not be taken without serious consideration, but allowing it to be one person’s decision makes this all the more likely. The CEO will be empowered to authorise unilaterally commercial activities by the harbour company. Commerce is an important part of what harbours can bring to a community but it should not be above the interests of the wider community. Such decisions require consultation and democratic oversight through the seeking of council consent.

In many cases such decisions may be relatively minor but that should be for the elected representatives of the community to decide.

The board can sell off assets without any democratic oversight by local authorities. This is completely wrong and given the somewhat cold way that CEOs can approach the accounts of the local authority, it could lead to very damaging sell-offs completely against the wishes of the community. CEOs will be able to approve of harbour borrowings unilaterally. This is again another unchecked power for CEOs which allows them to make very serious decisions without consulting local representatives. Consultation is crucial in these cases so that all issues may be taken into account.

CEOs will have sole oversight of accounts of harbour companies. Local authority representatives should be allowed to debate the accounts and have oversight of the audits of the harbour company. Similarly the chairperson of the harbours board must submit a report annually to the CEO but not to the local authority members to consider, debate or question. CEOs will have the sole right to commission a performance review of the board of the harbour. Councillors elected by the community should have this power given their role in ensuring the provision of quality services and value for public money. Only the CEO will be able to approve new superannuation schemes with no democratic consultation or otherwise needed. The CEO will be able to issue directions on the policy of the harbour company but this cannot be done by the elected councillors.

The Bill will transfer all employees of harbour companies to the local authorities but remuneration cannot be less favourable, so a local authority has no ability to reduce pay to highest earners in a harbour company. Concern was previously raised that commercial bodies which receive State support are able to pay high-ranking employees very large wages without any input from the State which funds them. This move should empower local authorities to consider the wage bill of high earners within the harbour company should savings need to be made.

The Bill proposes to make the harbour structure more democratic and accountable. Unless these concerns are addressed I am doubtful if we can fully support a Bill which gives such a range of powers to the CEO of the local authority but with no oversight or need for consultation. We will seek to secure a number of amendments on Committee Stage. It is welcome that the Joint Committee on Transport and Communications has supported the Bill. Bringing it before that committee for initial scrutiny was a very positive step. The Bill also provides for the possible future transfer of Bantry Bay Port and Dundalk Port to local authorities.

The Minister's plans for gender balance on the committee are very important. It is important that the chairman designate of the board must come before the Oireachtas committee, as stated in the Bill. The make-up of the board is also very important and the Minister of State has outlined some issues there. I believe that the local authority members should be represented on the board.

With the transfer of ports and assets, I hope there will be no job losses. Will the Minister continue in the same role as we have seen in the past where people are nominated to the board and the Minister makes the decision as to who will be the CEO or puts forward a number of names and then we go to the committee but de factoit is already a done deal? It is a very poor way of doing things. It would make more sense for a number of names to be put forward with the committee having some decision-making powers in that.

Addressing local concerns are very important. On the cost of these transfers to the local authorities, will there be a write-down of debt? Will they come with no baggage when they are transferred over to the local authority? Will there be investment or will the local authorities be left to deal with it, with no expectation of money coming forward to help with improvement projects?

I look forward to debating the Bill further and we will table a number of amendments on Committee Stage.

Michael Kitt (Galway East, Fianna Fail)
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The next slot is shared by Deputy Boyd Barrett and others.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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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.

Ruth Coppinger (Dublin West, Socialist Party)
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I am speaking on behalf of the Anti-Austerity Alliance. In theory, the idea of bringing ports under the remit of local authorities is a positive step as port authorities have proved unaccountable to local communities in many cases. They have not taken the impact of the port on the community and local small businesses into account. However, the devil is in the detail. In reality, these authorities are not going to be accountable to local councillors. Ministerial orders will still apply.

Section 9 allows councils to sell 49% of their shareholdings. Such sales would be subject to a decision of the council, in the context of the underfunding of local authorities. We all know this underfunding is cited whenever any of our councillors try to extract anything on behalf of local residents. Limits are also being put on the ability to borrow. This could give rise to situations in which the selling of shares is cited as the only means to raise capital for further investment. Even the Competition Authority has said that the Government should retain public ownership of the ports infrastructure, yet the Government is providing for 49% of harbours to be privatised. It starts with 49%, just like Aer Lingus, and ends up being the full shebang. That is exactly what can happen. Is this really a cloak for divestment, allowing the Government to sell off these harbours? The dangers of privatisation are very obvious. I have a 2013 statement from the Irish Congress of Trade Unions welcoming the fact the Government is retaining the harbours in public ownership. Was this clause introduced at some stage after the initial consultation?

These regional ports are not very significant in the overall context of the national economy but they are very important to local areas and communities. It would be wrong for private hands to take control of them. Private shareholders will not take into account the impact of their decisions on communities. We know this. Their bottom line is profit. We are likely to see an emphasis on property development on port land and a focus on commercially beneficial aspects, to the neglect of things like sports facilities, heritage, wildlife and the environment. We have already seen this occur, as Deputy Boyd Barrett has illustrated in the case of Dún Laoghaire.

There are also safety issues. The harbours are being passed over to local councils but I do not see the Government allocating funding as well. Perhaps the Minister of State can clarify that. I have no doubt that safety could potentially be compromised.

I also wish to ask about workers' rights. In the legislation, although there is provision for the recognition of existing terms and conditions, there is nothing said about protecting new entrants into these occupations. There will be significant pressure in the context of privatisation. We know this will mean cheap labour and casual work without the same terms and conditions. We only have to look at the likes of Irish Ferries and what happened there. I call on workers in the ports, local authorities and local communities to mobilise and lobby their representatives to ensure privatisation of the ports is opposed. I am by no means opposed to the harbours being in the hands of local councils, but that should not be with the potential for 49% of them to be sold.

Fergus O'Dowd (Louth, Fine Gael)
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I am sharing time with Deputy Andrew Doyle. I welcome the Bill. It is very important and will lead to significant changes in our ports.

I take the point Deputy Boyd Barrett outlined and confirm that, when I was spokesperson on transport, I had serious concerns about the port in Foynes. While I am not familiar with the issues Deputy Boyd Barrett raised, I was and remain deeply concerned about the question of governance. At that time - it is a matter of record - there was a company set up by the chief executive to supply services to the port. It happened that the chief executive and his wife were directors of the company. I was deeply concerned about that and about the transfer of a significant piece of land - described to me as a ransom piece - owned by the harbour authority into the private ownership of a company. I brought those matters to the attention of the transport committee and the Minister of the day.

As I am no longer a member of that committee, my involvement with the issue has ceased. However, I agree with Deputy Boyd Barrett that there are serious issues which need to be clarified definitively when this legislation is passed. The Minister and his staff will be aware of these issues. They could arise at other ports and need to be dealt with to bring transparency, accountability and clarity in terms of the business model that must be followed by our ports. I welcome the opportunity to have this debate in that context.

Drogheda, where I live, has huge potential to develop its port Europe-wide. Perhaps the Minister of State might address the issue of Bremore port, either in his reply or at some point prior to Committee Stage. How can we further support Drogheda Port Authority in developing a new port at Bremore? I know the Minister of the day, Mr. Noel Dempsey, was in favour of it. The Harbours Acts were amended and local government made a commitment in planning to develop a new outer bypass of Dublin, which would go from Gormanstown or Drogheda right around through Naas and Newbridge down to Wicklow. Former Deputy Liz McManus represented Wicklow at the time and was also in favour of that proposal. Now that our economy is recovering and we are in a different mode, I hope we can debate these issues on Committee Stage. They should inform our opinions as we decide what is going to happen.

Drogheda and other ports on the east coast have great potential. There is huge growth in offshore energy, which could be a bonus in terms of new port facilities. I know of one local company that is anxious to get involved. It manufactures and exports products that can be used in wind energy, particularly at sea. I hope the business plan for the ports will take that sector into account.

We are faced with a dilemma which was raised by the Deputies opposite and which I raise again. I want the control of local authorities in terms of overall governance to be part of this Bill, and so does the Minister.

There is no doubt about that, but we also want them to be free and unfettered in terms of their business and their ability to create new businesses and jobs and to develop and improve port infrastructure. The Bill allows option A and option B to be considered. The Minister of State can correct me if I am wrong, but as I understand it the local authority will be informed by its research as to which option will be chosen. That is a reserved function of the county manager. I have discussed the issue with the county manager in Louth. I am strongly of the opinion that the local authority should have a hands-on approach to the development of Drogheda Port. The governance issues which are part of the legislation should be firmly and absolutely in place, but at the same time there is a need for the business model to be separate from the dead hand of people who know nothing about such matters, and who have no need to know anything about the business issues but have an entitlement and belief in the governance and improvement of the port. One might consider that an ambiguous statement, but I am clearly in favour of greater authority for Louth County Council in the running of Drogheda Port but for it to be free in its business plan.

I understand in the context of Drogheda that if the local authority were to control the port that the dividends would go to it, which could make a significant difference to the income of the local authority. I refer to such matters because the infrastructure of ports is changing. In Drogheda, for instance, the historic and traditional infrastructure on the quays of the town are no longer used by ships. We have music and other festivals, including a fantastic sea festival. An entire new business can be run from the old port in Drogheda. The leisure industry can have a significant positive effect if we organise it properly. The local authority can have an ideal influence on the development of models and activity in those areas whether the new port is at Bremore or at Tom Roe’s Point, and that the business model can be developed.

Significant issues arise in terms of development of the old inner town port, for want of a better description. We could have fantastic private development on the quays which would result in new business and commercial activities, including shopping. That would make a significant difference to the town. In many areas access to quay areas is poor due to the level of dereliction and lack of activity. The absorption of the port and town quays into the county council would give a significant strategic advantage to the local authority and its planners. It would avoid time delays in the acquisition of properties and haggling over prices. Pending such development, it would be very important for the county council to own the town quays. It does not make sense that the port authority gets a significant amount of its present income from parking charges on the quays. I do not see why that income should not go to the local authority to be ring-fenced specifically for the development of new activities centred on the old port.

The absorption of the port into the county council as an administrative unit would allow state aid by the EU in future and allow grants and cross-Border financing, for instance for training walls to keep the River Boyne navigable and to reduce the dredging costs which currently amount to hundreds of thousands of euro per annum. Under state aid rules, remaining as a corporate entity would lead to any grants being disallowed. There are considerable advantages to the absorption of the port into the county council.

The port has many properties in its portfolio. It has a fine site of several acres on the Meath side where its head office is located. The modern jetty could be used and would represent a huge advantage to inward foreign investment on the site. The new synergy between the port and the county council will make a significant difference. I am conscious that I am sharing time with my colleague, Deputy Andrew Doyle, so I will conclude. In summary, we need change, transparency, accountability in terms of the funds which are paid to chief executives and other officials of port authorities right around the country. The range of payments should be available. They may well be published in their annual reports but in view of what Deputy Boyd Barrett said it would be important to have transparency on such issues in all ports so that we know exactly what we are doing and where we are going. The legislation is very important. I welcome the debate and look forward to Committee Stage. I commend the Bill.

Andrew Doyle (Wicklow, Fine Gael)
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I thank my colleague, Deputy Fergus O’Dowd, for allowing me to share his time. I welcome the Bill’s provisions and key principles. As an island nation, ports are essential infrastructure that should stay in public ownership. Ports should be competitive and profitable. As a country we import and export many goods. We export food and pharmaceutical products in bulk. There is every reason for port companies to be viable and to stay in public ownership.

The ports we are talking about, namely, Drogheda, Dún Laoghaire, Wicklow and New Ross, are all located on the eastern seaboard. This week we opened a very significant piece of new road infrastructure on the M11, called euroroute, eventually to link Larne with Rosslare including all the ports along the way that form part of the necklace of ports. The ports can all be contributors to the Irish economy. Deputy Boyd Barrett referred in particular to cruise liners and tourism. Wicklow Port Company is a small semi-State entity that has been a profitable company, notwithstanding what Deputy Boyd Barrett said about the Dún Laoghaire Harbour Company. The company in Wicklow Port has continued to be prudent. It has invested money in the provision of key infrastructure such as a pier and has managed to keep some reserves. I recall when the then Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, visited, the harbour master was very concerned about his humble port headquarters. I assured him that the Minister would rather come to a port company with humble headquarters and a healthy bank balance than one where the opposite was the case.

It is wise to have the two options. We should not rule either one in or out. If a port company is to be transferred as it is to a local authority the company should then be answerable to the executive and the members of the council and the audited accounts should be available and published. Decisions taken by the company should be subject to the council in the same way that agencies of the State come before relevant committees of the Dáil. Port companies should present their annual report either to the full council chamber or to a select sub-committee.

If the desired option is to dissolve the port company and transfer it to the local authority a proper committee should be set up. The rules pertaining to revenues and profits of the port should be decided by the members. Section 9 provides for ministerial consent to the divesting of equity to the private sector. That should be a function of the members. There should be a double-lock provision in that a majority of members of the council would have to recommend the course of action first and then the decision would have to go to the Minister for approval.

We should be reassured that it cannot be privatised willy-nilly. Private equity may be necessary. It would not be the preferred option if, as I said, the port companies can trade profitably. Whether the new configuration means that they will be maintained as a company or absorbed into the council, they should continue to be able to avail of grant aid from the Department of Transport, Tourism and Sport or the Department of the Environment, Community and Local Government for investment in capital infrastructure that may be beyond their ability to provide, given their trading operations. Allowing it would make them profitable. Whether by way of a deferred loan or grant aid, they should be entitled to source such money without being in breach of state aid rules.

It is welcome that the provision is being made. We have a local government reform programme in place and are trying to restructure the way administration takes place and how we govern. There has been significant local government reform, much of which has returned responsibility, control, management and accountability to local authorities to let them run their affairs. The only way they can do this is with power and money and revenue is key.

All of the significant ports are very important to their local economies. There is very vibrant activity in Wicklow Port. It is very important that their future be secured and that they become integral to the local authorities. I welcome the provisions included in the Bill and I am very pleased that it has come to this point. It was a moot point for the previous Government. Where harbour commissioners were transferred back to the local authorities, as happened, for example, in Arklow, there have been ongoing changes. Wicklow Port Company is still small and does not merit being a semi-State body, as we understand it. However, there is no reason it cannot be part of a local authority and have a commercial and self-financing focus.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I am delighted the Minister of State is present. I can only imagine, if he were on this side of the House, how he would be on his high horse about the neglect of the west and a policy designed to keep it in its place and small.

Michael Ring (Mayo, Fine Gael)
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The Deputy is talking nonsense, as always.

Éamon Ó Cuív (Galway West, Fianna Fail)
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May I continue, without interruption?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Yes.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I can hear the Minister of State's voice rising to castigate the Government for a policy that would leave us with no national port between Foynes and Derry. Given the length of the coastline, one must ask how we could leave the area without a national port. As Google Maps, a fantastic facility, shows, Foynes is closer to Cork than to Galway. Therefore, the argument that it is close to Galway does not hold water. One need only consider the distance between Cork and Waterford, Waterford and Rosslare and Rosslare to Dublin to discover we will have a necklace of national ports stretching from the Border between the State and the North of Ireland, north of Dundalk, around the coast as far as Foynes. However, north of Foynes, along the northern bank of the River Shannon and the extremely long coastline of counties Clare, Galway, Mayo, Sligo, Leitrim and Donegal, there will be no national port.

I can imagine the Minister of State fulminating and saying it was a disgrace and should not be allowed to happen. His advisers will say the reason the port in Galway is not in the list is that it does not deal with the required tonnage. That is like telling the people of Inis Meáin that they had no track record in fishing as they did not have a pier and had to fish using currachs. As the Minister of State knows, the port in Galway is tidal and relies on the use of gates which can be accessed only in very limited tidal conditions.

The discrimination against the port in Galway in the Bill is very serious. Its effect will be to stymie the comprehensive development plan developed for the port. If successful, it would make Galway a very important port for the import and export of natural resources. Oil is already brought in, while waste, lime and timber are exported. Many other cargoes could be brought in and out if and when there is a suitable pier that would facilitate the bringing in of significant cargoes in all tidal conditions on ships of a suitable sized. Only ships of a limited size can enter the docks, with the Minister of State is more than familiar.

When I was Minister, I was instrumental in establishing a group that developed a vision plan for the port in Galway. We saw its potential as a commercial port in bringing in and out commercial cargoes, as well as one of the most attractive ports for the cruise liner business. Unlike most other cities, when the new harbour is built in Galway, it will be possible to bring ships within walking distance of the city centre, making it an incredibly attractive place for tourists. The heart of the city is very close to the port. The tourist area is adjacent to the port and will remain so if and when the new pier is built. As part of the creative plan, it was envisaged that the existing port would be used for marine leisure activities, for which it is ideal. Following the successful hosting of the Volvo Ocean Race, there is great potential to host and a demand for such events in Galway city.

We also developed the concept of redeveloping the existing portlands in the inner harbour area which would form the basis of extending and turning the city centre towards the sea, providing recreational, commercial and residential accommodation, along with shops, restaurants and high-quality offices. Rather than extending the city outwards, we aimed to consolidate the city centre, an area which is very eco-friendly and easy to walk around.

In one fell swoop, this Bill seeks to undermine all of this. It will make Galway a port of regional significance. In public service jargon that means it is not considered important, it is not worth investment or European grants and will not be considered part of the TEN-T process. The Bill is about locking the gate but not telling us this in such blunt terms. It is saying it does not believe the west should be developed and all development should take place on the east coast. The Minister of State, in his heart and soul, knows that is what is going on. I know he is not the day-to-day transport Minister but it must be an embarrassment to him to know that this is basically the underlying thrust of this Bill. Essentially, those that remain national ports will get resources and those which do not get nominated will get nothing.

This is perpetuating the future by the past. What holds us back west of the Shannon is underdevelopment in the past. The Galway Port company has shown, however, through objective analysis the port can develop in the future. However, because the tonnage is not there because of the past it will not be taken seriously. If we continue on that path, there never will be balanced regional development on this island. The west coast will always lag behind because historically, well before Independence, it was the poorer part of the island in terms of infrastructure and business.

Surely the Minister of State’s vision is bigger than that. When 15,000 tonnes were being put through the timber mill at Corr na Móna, I always remember being told by the forestry Department that we would never get 30,000 tonnes of timber for it. The big mills were to stay big and the small mills were to stay small. Amazingly, in 2015, that same mill is putting 400,000 tonnes of timber through it. We did not accept we had to be the poor relation. In fairness to P.J. Fahy, he did not take no from the powers that be for an answer. As a result, he has created a significant number of jobs. It is now the largest mill in the country. We were told there was not a tenth of the timber it consumes in a year available because the conventional theory of time was that the mills had to be in other places in the country, not in a place like Connemara.

In fairness, the Minister of State has fought that attitude for most of his life. He has not been willing to lie down and accept the west must always play second fiddle when it comes to roads, ports or airports. I know the attitude of the Department of Transport, Tourism and Sport. It is treating Knock Airport in the same cavalier fashion. I cannot understand why Knock Airport is not given the same status as Shannon and Cork airports. With a Taoiseach and Minister of State with responsibility for tourism coming from Mayo, one would have thought such designation would have been possible. We know the designations create the future. If one is designated to the also-ran league, then one remains in it. Designated to the big boys’ league, however, and one tends to get the investment into the future.

I hope between Second Stage and Committee Stage, the Minister of State, coming from the west, will get over his initial annoyance at me and challenge, as I had to do on many an occasion when I was a Minister, the status quo. The Minister of State knows it is not rhetoric with me. He knows that when I went to Corr na Móna as a young person, well before I was in politics, my whole motivation in the 18 years in the co-op there was not to accept the status quo,not to accept the west was an also-ran, not to accept immigration or that we could not create jobs. The businesses we spawned, under different management, have been highly successful and did defeat the odds.

The Minister of State also remembers Monsignor Horan. The same kind of thinking that informs this Bill, namely that we do not need a tier-1 or tier-2 port from the Foynes on the south side of the Shannon Estuary up to Derry, was the same type of thinking against which Monsignor Horan fought. I would say the Minister of State cheered him on at the time for kicking over the traces and not listening to the gurus in the Departments of Finance and Transport. One of the best pieces of television I ever saw was the famous interview by Jim Fahy with Monsignor Horan at the end of the massive, long runway at Knock Airport.

The wind was blowing and one could see miles of runway behind Monsignor Horan. In his roguish way, pretending that he was the innocent parish priest, which the Minister of State knows he was not, he put his hands up to his mouth and roared into the microphone: "Do not tell them in Dublin. They do not know this is happening." Was he not proven right about making a stand?

It is a great privilege for the Minister of State to be in office. As I pointed out this morning, we have three more Question Times before it is all over, even if the Government goes to 9 March. The Minister of State is coming towards the end. We all want to leave a legacy. The Minister of State knows that, when I was Minister, I supported Knock in every way I could. I am proud of it. I suggest that the Minister of State return to the Department. If the Galway Port Company can provide the plans - it has them and is awaiting permission in the coming weeks following an oral hearing of An Bord Pleanála under the critical infrastructure Act that I attended some time ago - and convince him that, between Galway, Mayo, Roscommon and so on, there is enough business to keep the port going in Galway, including the business of incoming cruise liners, he should tell his senior Minister that he will leave a legacy for the west in the Department because he sees the big picture for the west, namely, what is good for Galway is good for Mayo and vice versa. The Minister of State should suggest and succeed in getting a simple amendment to this Bill, namely, the removal of the reference to Galway as a port of regional significance, the inclusion of a reference to it as at least a tier 2 port and the provision to the west coast, Connacht - the Cinderella province - and that part of Ulster that is in the Republic what they deserve. If he is big enough to do this and see the justice of the case, his legacy will stand on its merits.

Michael Ring (Mayo, Fine Gael)
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I thank Deputies for their contributions. As they acknowledged, the Bill has been before the Oireachtas joint committee, a process that has been of considerable help. Deputies have raised a number of issues that I will bring to the attention of the Minister, Deputy Donohoe, but I will reflect on a couple of them now.

The transfer order to be made under the Bill will be a short and straightforward one nominating the day of transfer. The detail is in the Bill. I have heard Deputies' opinions about the Oireachtas joint committee engagement. They were pleased with it.

Due diligence is under way. This will provide a complete picture of the financial position. In terms of consultation, there have been detailed discussions with the companies and council executives. As regards capital expenditure, Government policy is clear that no funding is available for a commercial company, irrespective of the shareholder. Regarding the corporate governance of a transferred company, the Bill spells out the role of the elected members, the local authority chief executive and the company.

Deputy Ellis referred to the need for democratic oversight and highlighted the OECD reports on the matter. He also referred to the commercial importance of the ports. Therein lies the balance when a company transfers. We will try to balance commercial needs with democratic oversight. The Bill provides a number of important new powers to elected members. Under the other transfer model, everything is run like any other council function. All accounts must be submitted to elected members who may call in chairpersons and CEOs to discuss administration generally.

Deputies queried the lateral model of transfer in respect of particular ports. The Minister and I welcome their views on what model is most appropriate. I assure them that we are in listening mode. Regarding public ownership of our ports, there is no question of the national ports policy moving away from the current model. However, that does not rule out increased private investment if elected members so decide.

Deputy O'Dowd raised a number of important and positive points about ports' potential. I thank him for his comments on Drogheda. Deputy Doyle rightly referred to the importance of our ports. The Minister and I share his views.

I wish to address Deputy Ó Cuív's question on why Drogheda and Galway were not considered as ports of national significance.

Éamon Ó Cuív (Galway West, Fianna Fail)
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There are a sufficient number of ports on the east coast. I do not know why we did not get it.

Michael Ring (Mayo, Fine Gael)
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I cannot let the opportunity go. The Deputy discussed Knock airport. Before responding further to the Bill, I wish to remind the Deputy about when he and I fought bitterly on "Morning Ireland", local radio and Galway Bay FM many years ago regarding Galway Airport. I was in opposition and he was a Minister. I told him not to waste taxpayers' money on Galway Airport when we already had a regional airport in Knock and another airport in Shannon, but he continued putting money into it. Where is it today? Closed.

Éamon Ó Cuív (Galway West, Fianna Fail)
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That is because we did not put money into it.

Michael Ring (Mayo, Fine Gael)
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That Government did.

Éamon Ó Cuív (Galway West, Fianna Fail)
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We did not.

Michael Ring (Mayo, Fine Gael)
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I asked the Deputy not to do so. I asked him to support Knock. I asked him to support Shannon. I wanted the regional airport to be Knock airport. I am a Minister of State at the Department of Transport, Tourism and Sport and I do not deal with harbours. I am taking this Bill on behalf of my colleague. I assure the Deputy that a great deal of work is happening behind the scenes at Knock airport. This Government has been very supportive of it. The Deputy knows the situation better than anyone, as he was in government for 14 years.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are discussing different matters now.

Michael Ring (Mayo, Fine Gael)
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I will finish on the harbours. Deputy Ó Cuív spoke about Shannon, Cork and Knock, but we both know that Knock is in private ownership. Shannon is now in private ownership, but it was in Government ownership, as was Cork. The Deputy cannot have it both ways.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Minister of State has had his say. Will he get back to the Harbours Bill, please?

Éamon Ó Cuív (Galway West, Fianna Fail)
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Shannon is in State ownership.

Michael Ring (Mayo, Fine Gael)
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I will finish. I have always respected the Deputy's point of view. His Government did some very good things, which I will not take away from him, but it also did some very bad things. For the past four and a half years, we have been cleaning up the mess that it left behind. I commend the Bill to the House.