Sean Barrett (Independent) | Oireachtas source

I move amendment No. 2:

In page 8, lines 8 and 9, to delete “by order provide that, without the need for any instrument of transfer or other form of assignment” and substitute the following:

“not less than one year after the publication of an independent cost-benefit analysis of all options for the future of a port”.

As always, I welcome the Minister for Transport, Tourism and Sport. On this occasion, we are here to discuss harbours. It is not the first time that both of us have discussed harbours, we have both done so in our previous existences in a place of higher education. He is welcome and it is an honour to be here with him to discuss these issues.

Looking at the harbours scene, as the Minister said on the previous occasion, the sector peaked at handling 54 million tonnes in 200. Within two years its tonnage had decreased to 42 million. It has increased again to 47 million, which is 88% of peak tonnage. I agree with the Minister that the sector is almost back at peak tonnage. It is in that context that I propose the first of my amendments. We should deliberate long and hard as to which configuration of ports is best for the economy of this country. We can either put them into local authorities, which is feature of this legislation, we can run them on a group basis or we can see whether some of them have a future, as my amendment states, as independent entities.

I hope to illustrate that ports are a very good business. I am also concerned about local authorities taking over ports. The cause of my concern is Irish Water and I do not say that in an underhand way. Irish Water exposed problems which the McLoughlin report had said earlier were inherent with the process of government in this country. The McLoughlin report recommended that the number of county and city managers should be reduced from 34 to 24, representing a reduction of 30%, that the number of directors of services should be reduced by at least 20%, from 240 to 190, and that the number of senior and middle managers should be reduced by 15%. It also recommended that: the number of corporate service staff should be reduced by 10%; the number of planning staff should be reduced by 10%; the number of roads staff should be reduced by 250; and that there should be a 15% reduction in staffing and local government arrangements in Dublin and Cork. I have outlined these numbers because I am not convinced that our local authorities are models of efficiency and that moving ports into them is beneficial for the economy of this country.

Let us look at the specifics of the first amendment that is in my name. In terms of the Bill as proposed, my amendment states, "In page 8, lines 8 and 9, to delete “by order provide that, without the need for any instrument of transfer or other form of assignment”, which seeks to ensure that the ownership of all of the shares and share capital of the company concerned can be moved.

Amendment No. 3 in my name seeks the deletion of lines 15 to 17 which read, "No consideration shall be payable by the local authority specified in an order made under this section in respect of the shares vested in that local authority under this section." The reason I use the words "without the need for any instrument of transfer" is because what is proposed is almost casual. I know that is not the way the Minister operates and is not what he intended it to be but it almost seems as if we can just do this at the stroke of a pen. Does it make economic sense? The Minister is running the risk of encountering the problem the McLoughlin report identified in respect of layers of management at local government level. I am unaware that those concerns from July 2010 have been addressed.

We have a business which, as the Minister said on Second Stage, is highly competitive. In the Northern Ireland market, Warrenpoint has taken over as the second port from Larne. As the Minister will be aware, Dublin Port has gained a huge market share from all of the other ports, including ports in Northern Ireland. When one considers the material provided for us by the Oireachtas Library and Research Service one can see that Dublin Port made a profit of €26 million in 2013, Cork made a profit of €1.7 million, Shannon Foynes made a profit of €2.8 million, Waterford has improved by making a profit of €1.5 million, and Rosslare made a profit of over €1 million. These harbours made a combined profit of over €33 million which shows that they are highly successful businessesTherefore, I would not make the casual assumption that they should be moved to local authority control or that local authorities represent a more efficient kind of model for running harbours. It takes a specific kind of skill to relate to one's customers and competition also keeps harbours efficient. As I mentioned on the last day, we are at fault because we have not implemented the Competition Authority's report on competing terminals, more people doing stevedoring and having shorter leases on facilities at ports. There is a job to do at those ports to make them efficient.

There is a serious question to be asked on whether it is correct to place an emphasis on transferring them to local authorities in view of what I have outlined. Obviously, I make an advocacy case for them here. We need to sit down and see what is the best option for these ports and that is why I mentioned in amendment No. 2 "an independent cost-benefit analysis of all options for the future of a port”. The ports are good businesses which I shall go through them individually and they have a high amount of turnover per staff employed. They also have, as a group, a combined profit of €33 million. As the Minister said on the last day, as much as €26 million of that combined profit was generated by Dublin Port. These businesses compete internationally and have a track record. Therefore, an assumption that they could be run better by local authorities is one which would require to be proven.

Amendments Nos. 2, 3 and 35 have been grouped together. I tabled amendment No. 3 because I am concerned about what will happen if these assets are transferred. My amendment seeks the deletion of lines 15 to 17, on page 8, "No consideration shall be payable by the local authority" in respect of those assets. I contend that they are valuable assets. Perhaps they can be sold to somebody else if a local authority does not want to pay for them. They are businesses which are up and running. That is the caveat that I have about amendment No. 3.

I shall move on to discussing amendment No. 35, which relates to section 30. I have elucidated the same principle in amendment No. 35 which states, "following published evaluation of the productivity both of the port company and the local authority concerned”.Is the port company operating to full productivity? Has it left un-implemented the recommendations of the Competition Authority? Is the local authority operating at full productivity? We do not assume that the takeover by the local authority of a port will in fact give us the desirable result. The relevant section is section 30(1), which states:

A local authority specified in an order made under section 28shall, on the company transfer and dissolution day, accept into its employment each person who immediately before that day was a member of staff of the dissolved company concerned.

That is almost negating any possibility of productivity gain without investigating the two factors mentioned in amendment No. 35.

The other concern I have is referred to in the documentation prepared by the Library and Research Service. Where county councils run ports, their level of traffic is far lower than at the ports listed in Schedule 1. The list includes the ports in Drogheda, Dún Laoghaire, which is a special case, Galway, New Ross and Wicklow. Where local authorities have taken over ports, one could say they had gone so far down in the market that they could not be reversed. However, looking through the list that the Library and Research Service prepared for us, it seems that up to seven of them have no ships calling at all. Arklow, which is under the control of Wicklow County Council, has nine. Wicklow Port, which has a separate authority, had 70 ships in the past year. Is the running of ports by local authorities a good idea? Granted, some of them had gone very far down the list of busiest ports, and that was the reason they were transferred. However, would it amount to death for ports that might otherwise have recovered as the economy recovers? Certainly, I have looked through all the zeros on the list as well as the very small numbers for the ports at Ballyshannon, Annagassan, Baltimore, Buncrana, the River Moy, Westport and Wexford Harbour. Compared to what the independent port companies have been doing, there is not much evidence, going on past record, of local authorities being able to develop ports. The only one I could find was Youghal, which had 73 ships per year. All the rest are way out of line. Some places are serving four or five ships per year. That does not equate to commercial business for a port. Is it the wrong model, then, to allow local authorities to take over ports? I maintain that such ports are feasible, making money, attracting ships and, as the Minister said the last day, reviving themselves as the economy pulls out of the recession.

I am making the case in my three amendments that ports are a specialised business. They are disciplined by their customers. The idea of local authorities taking them over, particularly in light of the McLaughlin review and the experience of Irish Water, is not a precedent that commends itself to me.

I am pleased that the Minister is considering these great issues, but I wonder whether the speed of takeover by local authorities of the ports listed in schedule 1 is too great. Are there alternative models that should be considered? Should a further cost-benefit analysis be done?