I thank Members for their positive attitude to this important and timely Bill. This is a period of historic change in Irish ports. With the passage of this Bill, the 1990s will see a radical restructuring of our leading ports, combined with new technology on our docksides and new shipping services to our world markets. We are seeing the implementation of probably the most far-reaching changes in port and shipping policy in the history of the State.
The Bill is designed to allow our 12 major harbours to grow into fully commercial and market-driven ports. In the next five years, £135 million of Irish and European funds will be invested in the development of our major ports. The ferry companies are responding with exciting new investments. Irish Ferries launched their Isle of Inishfree service from Dublin last month; Stena Sealink will begin their high speed service from Dún Laoghaire this autumn and Irish Ferries sail into Roscoff for the first time this month. Between the port developments and these new ships over £250 million will be spent to improve access for Ireland's trade and tourism.
All these developments at sea and onshore will bring benefits to the travelling public, exporters, business and tourism, with travelling times between Ireland and the United Kingdom and the Continent being reduced. Travelling and transport costs will become competitive to the benefit of the travelling public and shippers alike and port facilities and administration will be modern, efficient and competitive. I am sure all Members will join me in welcoming this great progress in our ports sector. Our commercial port traffic has grown by over 46 per cent since 1980. As the only island nation remaining within the European Union, we are more dependent on seaports than any other member state. We must minimise our transport cost barriers to enable us compete in the Single European Market. We have set an ambitious target of reducing port and shipping costs in the Republic by 15 per cent in real terms by 1999.
The Minister for Agriculture, Food and Forestry recently set a target for our food industry to become the primary food exporter to the UK market. This Bill shows that the Department of the Marine and the Government are serious about putting the right structures in place to meet the export challenge.
I would now like to respond to some of the key points and queries raised by Members during the opening debate. A number referred to the fact that the Bill provides far too much intervention by the Minister for the Marine and Finance. Many of the provisions of the Bill are standard, especially those in relation to the establishment of the companies, the appointment of ministerial directors, their remuneration etc. Provisions such as these are normally subject to the consent of the Minister for Finance. It is not intended to depart from this practice in so far as this Bill is concerned.
Likewise, borrowings by semi-State companies are subject to ministerial control, both by the Minister with direct responsibility for the company and by the Minister for Finance.
The aim of this legislation is to give the new port companies more commercial freedom and flexibility in day to day matters. The ports will, for the first time ever, be empowered to set their own rates and charges, they will be able to enter into joint ventures. In general, they will have control of their own destinies.
Several Deputies referred to the provisions dealing with sale, leasing and acquisition of land. Under the Harbours Act, 1946 all transactions of this nature, with the exception of short term leases, were subject to approval by the Minister.
Now the companies will have to notify the Minister of all such transactions and the Minister, if of the view that a particular proposed sale or lease is not in the best interests of the harbour, may direct the company not to proceed with it. Section 15 (1) (c) empowers the Minister to exempt specified classes of leases, sales or acquisition from such prior notification. I envisage that minor transactions such as short leases, sales or acquisitions of small plots of below a certain value, will be exempted.
Deputy Smith referred to section 17 (1) (h) and suggested the amount quoted was too low. This section empowers the new port companies to invest in undertakings, other than subsidiaries, up to a limit of £250,000. Investments above this threshold will be subject to ministerial control. Borrowings by port companies are dealt with in section 23. Port companies will be empowered with the consent of the Ministers for the Marine and Finance to borrow up to 50 per cent of the value of the company's fixed assets. The value of Dublin Port's fixed assets could be in the region of £100 million. A borrowing limit of up to £50 million is a considerable improvement on the present borrowing limit of £200,000 for Dublin Port.
Deputy Kavanagh mentioned existing local authority guarantees of borrowings by harbour authorities. I envisage such existing guarantees will remain in place. However, future borrowings may now be guaranteed by the Minister for Finance. This facility was not available under the 1946 Act.
In so far as the appointment of the local authority directors is concerned, the position is that the Minister, in consultation with the Minister for the Environment, will make regulations prescribing the manner in which such directors are to be selected and by whom they are to be selected. While no decision has been taken in this regard, I envisage that the local authority directors will be selected from among the elected representatives.
The ministerial directors will in general be drawn from the professional and business community. In appointing such directors I will be anxious to select persons with the appropriate business acumen. For this reason, I may decide to invite recognised bodies such as IBEC, the chambers of commerce, etc. to recommend persons for consideration for appointment as directors. Though not specifically provided for in the legislation, the chairperson of each port company will be selected by the Minister. In selecting a chairperson, the Minister will choose one from the board of 12 members.
Interest was also expressed by a number of Deputies on the question of how the fixed assets of the new port companies will be valued. No decisions in this regard have been taken to date but there will be full consultations with the harbours concerned at the appropriate time. There are a wide variety of acceptable valuation bases which may be used in determining asset valuations, for example, historic or original cost, existing use, alternative use, depreciated replacement cost. It is likely that different valuation bases will have to be adopted for the different classes of assets in the ports, for example, harbour walls versus floating craft, surplus versus core operating assets and so on.
