Creative ports policy required

The future of state-owned ports is under consideration but they are unlikely to stay in their current formation. eolas reports.

The future structure and ownership of Ireland’s 10 state-owned ports is yet to be decided. However, Transport Minister Leo Varadkar has indicated that the department is currently considering the recommendations in the McCarthy report into state assets, as well as responses to the department’s ports policy review.

The 10 state-owned ports are: Bantry Bay, Cork, Drogheda, Dublin, Dún Laoghaire, Galway, New Ross, Shannon Foynes, Waterford and Wicklow. Rosslare port is operated by state-owned company Iarnród Éireann. The other operational ports, which are run by their local authority, are: Castletownbere, County Cork; Greenore, County Louth; Killybegs, County Donegal; Kinsale, County Cork; Sligo and Youghal, County Cork.

At the 2011 Irish Ports Association conference, Varadkar said that state-owned ports were performing badly financially and there was a poor return to the Exchequer on those state assets. Moves such as Dublin port taking over management of Dundalk port “occurred much later in the day than should have been the case” and port managers were encouraged to be more progressive and creative in planning their futures, bearing in mind that there will be no state funding available for ambitious infrastructure plans.

The McCarthy report recommended that state-owned ports, including Rosslare, should be restructured into several competing multi-port companies, built around Dublin, Cork and Shannon Foynes. Privatisation of some or all of the ports should be considered, ideally after restructuring, the report suggested. It also said that ports policy should limit the level of public subsidy through greater efficiency and the amount of capital to be invested in further transport projects should be severely constrained.

Varadkar has described these options as a “one-size-fits-all” approach that may be too difficult to implement. However, privatisation of one of the larger ports is an option as it could “inject real competition and bring new players into the sector.” He added: “Ports are strategic assets but we do not need to own ten of them.”

The Minister has said he is considering whether to allow ports to continue as they are or whether to transfer cargo and passenger ports with a doubtful commercial future to local authority control. He might also encourage the nine ports to co-operate e.g. Dún Laoghaire and Dublin to work together to develop a single cruise ship terminal for the capital. He has also queried whether, if a new deepwater port was needed on the east coast in 20 or 30 years’ time, should this be done by a new competing company or should Dublin port lead its own move out of the city centre to a new site over time.

Ports play a huge role in maintaining Ireland’s competitiveness, particularly through their role in transporting agriculture products, pharmaceuticals and tourists (three of Ireland’s main economic strong points).

Performance

Seven state-owned ports have been consistently dealing with less gross tonnage from 2008-2010 (see table). Dublin is the only port to have experienced increasing gross tonnage (up from 133.5 million tonnes in 2008 to 148.7 million tonnes in 2010). Over forty per cent (43.6 per cent) of imports came through Dublin port in 2010, while 46.2 per cent of exports from Ireland originated from Dublin port. Shannon Foynes and Cork both dropped in 2009, affected by the record collapse of shipping volumes in 2009, but picked up again in 2010.

Dry bulk (ores, coal and agricultural products) accounted for the most goods handled by public and private ports (10.44 million tonnes) in 2010. Most of that trade (5.31 million tonnes) came from other Irish ports, while 692,000 tonnes came from Great Britain and Northern Ireland. Dry bulk from other EU countries totalled 3.8 million tonnes.

Liquid bulk (liquefied gas, crude oil and other oil products) accounted for 9.55 million tonnes handled by Irish ports in 2010. Liquid bulk from Great Britain and Northern Ireland totalled 4.32 million tonnes, while 1.68 million tonnes came from other European countries. Non-EU countries sent 2.07 million tonnes of those products through Irish ports last year.

Lift-on/lift-off traffic (i.e. 20 and 40 foot containers) totalled 3.66 million tonnes in 2010 and roll-on/roll-off traffic (i.e. road goods and trade vehicles) carried 6.73 million tonnes through Irish ports. However, roll-on/roll-off traffic was generally concentrated in larger ports such as Cork, Dublin, Dún Laoghaire and Rosslare, while lift-on/lift-off traffic was highest in Cork, Dublin, Drogheda and Waterford.

Passenger numbers passing through Ireland’s ports increased from 2.87 million in 2009 to 3.08 million in 2010 (excluding cruise passengers). Dublin dealt with most last year (1.759 million), while Rosslare saw 92,000 and Dún Laoghaire had 250,000.

The headline pressure for the lift-on/lift-off market at the moment is the volatile price of fuel, according to the Irish Maritime Transport Economist. Irish roll-on/roll-off volume of growth slowed towards the end of 2010 due to concerns about the pace at which the UK emerged from the recession and about the state of the Irish economy, the report added.

Responding to eolas (see page 32) the Minister said: “I hope to have a ports policy review concluded in the near future but we have already acted in a number of cases, such as merging Dundalk port with Dublin, and reverting the management of several harbours back into their local authority.”

Port activity

Source: CSO