We are now going to deal with the final item on our agenda, SI No. 214 of 2012, regarding fishery harbour centres rates and charges. I invite Mr. Beamish to make an opening statement.
Fishery Harbour Centres (Rates and Charges) Order 2012: Discussion
Mr. Cecil Beamish
I would like to give the background to the publication of the recent Fishery Harbour Centres (Rates and Charges) Order 2012. The finalisation of this order was the culmination of an extensive research and review process by the Department and the Minister and included a comprehensive consultation process with various stakeholders before the final signing of the order. I would like to set out the background to the fishery harbour centres, the basis for the rates and charges order, the process undertaken in the review of the 2003 order, which was the applicable order up to this year, and the main changes in the Fishery Harbour Centres (Rates and Charges) Order 2012.
The six fishery harbour centres are located around the coast of Ireland and were set up to create a base for the commercial fishing industry so that we can compete further offshore, increase scale, provide integrated services and proper landing facilities and enable a processing hub to develop in Ireland in the commercial fishing industry. The Department has responsibility for the management, control, operation and development of each of these harbours, which are located in Killybegs, Rossaveal, Dingle, Castletownbere, Dunmore East and Howth and are a valuable and vital resource to the Irish commercial fishing fleet. The harbours undergo constant maintenance and development so that we can provide the high-quality facilities expected and needed by the fishing industry if it is to compete in the international food industry and attract more landings from vessels of all flags. The harbours contribute to and are drivers of the local economy and facilitate the provision of numerous ancillary services, such as fish processing, chandlery supplies, engineering services and fuel supplies. They also make a significant contribution in terms of the revenue generated and employment, as can be seen from recent studies on economic dependence in Castletownbere and Killybegs over the past two years which have highlighted the economic importance of these fishery harbour centres.
While the provision of services to the fishing industry is the core activity at the fishery harbour centres, the harbours also provide growing marine leisure and ferry operator facilities. They also facilitate other compatible business activities, such as the support of the offshore oil and wind industries where possible and other commercial activities. The basis for rates and charges at the harbours is that these large scale industrial type operations require considerable funding for maintenance, development and to maintain the level of service provided. The Fishery Harbour Centres Act 1968, as subsequently amended, sets out the mechanism to be employed in funding the day-to-day operational costs of the six fishery harbour centres. All income received at each of the six fishery harbour centres is effectively lodged to what is known as the fishery harbour centres fund. All of the day-to-day running costs of each fishery harbour centre are financed from the fishery harbour centres fund and it is the only source of income available to fund the day-to-day operational and management costs for the centres. The expenditure includes, for example, harbour master and staff salaries, electricity and fuel costs, harbour cleaning, public lighting, maintenance, etc. Without this funding and investment, the fishery harbour centres could not function and certainly could not provide the service to their customers they currently provide. All the income lodged to the fishery harbour centres fund is invested directly back into the centres and is used for no other purpose. Essentially, every cent of revenue at the fishery harbour centres is invested back into them for the benefit of the customers.
The rates and charges order is the legal instrument that enables the charges to be levied that provide the income necessary for the provision of the various services at the fishery harbours. There have been no increases in rates and charges since the previous charges were set in 2003. In setting the new charges, the Minister was mindful of the need to set the charges at a level sufficient to provide adequately for the costs involved in the day-to-day running of the harbours, while also taking account of the economic environment in which users of the harbours operate. The last review of the rates and charges was completed in 2003 and since that time, particularly through 2009 and 2010, a number of those charges were deemed by the industry and Department to be out of date, not always with regard to the level of the charges, but to how they were structured. Certain of the charges were structured to facilitate what was happening in 2003, when we had a different fleet structure and development. At the time, we were going through white fish fleet modernisation and renewal. The problem then was that people could not access some of the services in the facilities because old vessels were being left lying around in harbours, with little incentive to move on and other vessels were left for a long time in the syncrolift yards in the harbours, thereby blocking up vessels that wanted to access the facilities. Therefore, the industry asked, through 2009-10, for changes to be made to the structure of the 2003 order.
The 2012 review was conducted in the context of the changing business environment in which the harbours operate and the increased and new additional business activities at the harbours. Marina facilities were now part of the harbour network in both Rossaveal and Dingle but these were not covered in the 2003 order and this contributed to the call for the general request for a number of the charges to be recalibrated and refocused in order to take account of the changing structure of the fleet. The initial review of the order took account of representations already made by the industry and customers as well as by the harbour masters. The review also looked at charges in place in other fishery harbours in Northern Ireland and the United Kingdom and in non-fishery harbours and ports here in Ireland. Every effort was made to draft the charges in a way that would balance the need to run the harbours in an efficient and economic manner while also being cognisant of the economic realities faced by customers.
The first draft order was made available for public consultation on 30 March 2012, with a closing date for receipt of written submissions set of 20 April 2012. The public consultation process afforded an opportunity for the public to comment on the proposed changes and to suggest alternatives. The process worked well and a total of 87 submissions - a high number - were received. They were received from fishermen's organisations, individual fishermen, tourism and leisure interests, passenger and cargo vessel operators, business interests and many private individuals. All submissions were examined and the Department officials met with a number of individuals and groups where necessary clarifications were sought and provided. The draft 2012 order was considerably revised by the Minister to take account of the submissions made and this resulted in a significant number of reductions in the charges to be levied, as well as changes to the structure of some of the charges. The published 2012 rates and charges order has a total of 29 charge categories, which are further broken down into individual sub-categories. As a result of the public consultation process, there was a total of 21 reductions to ten of the 29 charge categories. The reductions ranged from 12.5% to 70%.
I would like to outline the significant changes made in the 2012 order. General fish landing charges are the basic charges that form the primary purpose for which the fishery harbour centres operate, namely, the charges levied on the volume and value of fish landed. General fish landing charges set for all whitefish and fishmeal have not been increased in the 2012 order, above the levels set in the 2003 order. The only category of fish for which there has been an increase is for the landing of mackerel and horse mackerel over two tonnes, where there was a €4 per tonne increase, and this reflected the increased value of this species since 2003. The value of mackerel and horse mackerel has increased significantly over that period.
We have an increasing number of non-Irish vessels landing in Ireland, but the structures were largely set up to facilitate vessels operating in and out of our fishery harbour centres on a permanent basis. The agents and operators of vessels coming in from other flags who wish to land in Ireland - that is a positive economic contribution - were looking to pay on a single entry charge basis as an alternative to the annual multiple entry charge. The level of that charge had to be calibrated so that it was not overly favourable or unfavourable to those who chose that option. A new €400 single entry charge was provided for in the new order. It is available at the discretion of the operators, and if the operators choose not to avail of it they can use the annual multiple entry option instead.
Syncrolifts are the facilities which allow vessels to be taken out of the water in various harbours and taken to yards so that works - maintenance, upgrades and so on - can be carried out. The charges for syncrolift use as set out in the 2003 order were the subject of complaints. The order was designed to deal with a problem at the time whereby people were taking vessels into the yards, taking up space in the yards and leaving them there for a long time and not organising their business in an efficient way. The charges that existed before 2003 were not incentivising people to get their business done quickly and allow others to use the facilities. In the meantime we have seen decommissioning and various other changes, and the reasons for using the yards have changed. There is now a big demand for vessels to go into the yards for safety checks. There are new safety standards in place and people sometimes have to pull the keel and so on, and this takes time. The 2003 order penalised people who stayed a long time in the yards. That has now been reduced in the new order. The charge for standing in the covered repair bay - the only one is the so-called painting shed in Killybegs - has been increased from €50 to €100 per day, but the charge for prolonged use of the syncrolift has been reduced by 50%, from €400 per day to €200 per day. The period for which a vessel can avail of the reduced rate of €100 per day has been extended from ten to 28 days. To ensure the charge is fair, the 2012 order provides for an exception to the €200 charge to facilitate an inspection by a Government body, such as when a vessel is awaiting inspection by the Marine Survey Office. The period in which it has to be in the syncrolift yard may in that case be determined by the ability of the Marine Survey Office to carry out the inspection.
Charges for use of the facilities in the fishery harbour centres by yachts and other pleasure craft have been introduced in the rates and charges order. This follows the provision of specialised marina facilities at Dingle and, more recently, Rossaveel fishery harbour centres. The charges introduced are competitive and in line with the charges for similar facilities at other comparable locations.
The charges for passenger craft using the fishery harbour centres have been carefully calibrated so as to be fair and equitable, but also to reflect the particular importance of the services provided by the ferry operators to the island communities. There has been a minimal increase in the charge for small passenger boats licensed to carry up to 12 passengers, and a significant reduction in the charges levied on passenger vessels licensed to carry 13 or more passengers. There has been no increase in the charges due in respect of visiting cruise liners at the fishery harbour centres.
The new order was signed on 21 June 2012 and is effective since 1 July 2012.
I thank Mr. Beamish for the presentation. Deputy Ó Cuív's position is that the charges levied at Rossaveel Harbour for cargo boats is far in excess of that levied for passenger craft. They are quite different to the charges at Galway Port. The Deputy quotes a figure of €85,000 for the three boats at Rossaveel and €35,000 for the Galway boats. He wants to establish why there is such a disparity in the figures and asks that there be an option of setting annual fees for cargo boats using the harbour on a continuous basis.
The Deputy is not here because there is a debate on the Gaeltacht Bill in the House, but he asked that these issues be raised here. Perhaps Mr. Beamish can respond to them.
Mr. Cecil Beamish
There are many different types of charges in this order and there is a lot of detail. It may be useful to explain the position on the charges for cargo vessels. There are Schedule 1 and Schedule 2 charges in the structure of these charges. There is a fixed amount in schedule 1 and no variation in the charge is permitted. If the charge comes under Schedule 2, the Minister is setting the maximum amount that can be charged. There is a discretion for the harbour master in levying the charge if it is a Schedule 2 charge, so he or she can charge something less than the maximum. That is because-----
Why is there such a discrepancy between Galway and Rossaveel?
Mr. Cecil Beamish
The cargo charge was a Schedule 1 charge in the 2003 order. There has been great change in the way cargo is landed since then, and the cargo charge has now been moved to a Schedule 2 charge, which means that maxima are set for different types of cargo. The amount that is levied for the cargo charge has not changed since the 2003 order. Under the 2012 order cargo is broken down into many different types. Under section 15 of the 2012 charge order cargo is broken down into metals, timbers, sand and gravel, crushed stone, offshore oil and gas, bagged coal, cement products, animal feed and grain, machinery and other cargo and there is a different rate set for each of those. In the vast bulk of those the rate had been €1.25 per tonne for cargoes up to 150 tonnes and a higher rate applies for cargo above that tonnage. That has been the rate in respect of that cargo, with the exception of the machinery charge, which up to now has been essentially applied to windmills, wind turbines and that type of machinery, which have been landed mainly in Killybegs. The rate for the rest of the cargo is €1.25 per tonne or lower, which was set in 2003. The cargo charge for the machinery and manufactured goods is €2 per tonne and that reflects the high value of the products that have been landed. The charge has not increased and for certain categories of cargo the charge has decreased since 2003.
An issue was raised regarding the tying up of a cargo vessel in a port. A charge of 30 cent per tonne for that facility applies after seven days for the first 28 days and a charge of €1 per tonne applies after 28 days. A cargo vessel that is lying in the harbour takes up a good deal of space and it prevents other users from operating, therefore, a higher charge applies to such a vessel after 28 days. That is the rate of charge that has been in place since 2003 as well. That has not changed.
The Galway Harbour Company is an independent commercial harbour company and it sets its charges as it sees fit. Anyone who is familiar with the Rossaveal Port will be aware that there has been a good deal of development there during the past seven or eight years. A new ferry terminal was built in Rossaveal with finger point floating moorings that are surface accessible for the ferries going to the Aran Islands. That in part was done to create space on the pier wall to allow the cargo vessels which operate to the Aran Islands to access the quay wall. They had difficulty doing that when all the ferries were tied to the quay wall. That created the possibility for the cargo vessels to operate to a greater extent from Rossaveal if they so wished.
Could an annualised charge be applied to cargo vessels that would use it on a continuous basis?
Mr. Cecil Beamish
There was a public consultation process. Some 87 submissions were received and considered, issues raised by all categories of people at that time were considered and the order was signed off on in late June.
I wish to clarify that a flat rate charge was not provided for in the statutory instrument. That was the point the Deputy was raising. A flat rate charge seems to have been provided for passenger vessels but not for cargo vessels. Is that correct?
Mr. Cecil Beamish
That issue was not raised by anybody in the 87 submissions we received and considered. I would point out for the bulk of cargo categories the charges have been reduced from those that were set in 2003.
Mr. Beamish is inferring, and he can correct me if I am wrong, that the reason Galway Port charges three times less than Rossaveal is that it is a privately owned port and therefore it can set its own charges as distinct from the higher charges being set by the State.
Mr. Cecil Beamish
I am not inferring anything. What I am saying is that Galway Port is independent in setting its charges. I can only speak for the charges that are set in the fishery harbour centres. The charge in the fishery harbour centre for a cargo vessel that is tied up for seven days, or 28 days as the case may be, is the same charge as has been applicable since 2003. The charges applying to cargoes that are landed have been reduced in most categories.
To pick up on what Mr. Beamish said about moving from Schedule 1 to Schedule 2, will he explain what is the difference in moving from Schedule 1 to Schedule 2?
Mr. Cecil Beamish
Under Schedule 1 there is a fixed rate charge. There is a defined figure in the charges order and that is the figure that has to be charged. Schedule 2 is designed for charges where the harbour master can apply discretion. For example, under Schedule 2 a maximum amount is set for the charge that applies in respect of cleaning up the harbour after it has been used for some purpose. The harbour master can apply the maximum charge for the clean up where the user has created a great mess, made no effort to clean it up and that would involve a cost for the State. Alternatively, where the user has gone 90% of the way towards cleaning up the harbour and a minor amount remained to be done, it would not be appropriate to charge that person the same amount. Therefore, the harbour master has discretion in that respect.
There is a reduction in the 2012 order over the 2003 order for cargo vessels in respect of water and garbage charges. That helps to fill in the full picture in regard to cargo vessels. The quantum per tonne charge for cargo being carried is now a Schedule 2 charge which allows a degree of discretion.
That means that different types of categories of cargo are charged at different rates.
Mr. Cecil Beamish
Correct.
It is No. 15 on the Schedule.
Mr. Cecil Beamish
It is charge 15 on the Schedule.
I thank Mr. Beamish for that.
The issue here, which was also raised by Deputy Ó Cuív, is that it is a charge being placed on the Department with responsibility for heritage in that it subsidises the cargo vessels that serve the Aran Islands and it is a paper exercise more than anything else. It places a burden on that Department to provide support for the islands and the necessary cargo operations that serve them. That should be taken into account.
I take it from what Mr. Beamish said that there is no option to review the position and the fact that no submission was made in regard to cargo vessels means that is the end of the story at this stage. That highlights another point. The committee had asked that the matter of the public consultation process would be brought to the committee at an earlier stage. We had also raised that the matter of the herring quota allocations a number of months ago would be brought before the committee. It is regrettable that an opportunity was missed to discuss those cargo charges during the consultation phase which could have fed into the decision making process on them and that an opportunity was missed to discuss the matter of the herring quota allocations. If the committee has an issue it needs to raise in the future, hopefully, it might be possible to deal with it in a quicker timescale.
I ask if a case can be made to the Department with responsibility for heritage in regard to the cargo charges or if some option could be considered to accommodate the operators in this regard. I refer to the charges in general and the increase of 40% in the mackerel landing charge since 2003. While I accept this is due to the increased value of the fish I do not accept that the increase of 40% is justified. On the use of the synchrolifts, companies in Killybegs have had difficulties in tendering for work because of the charges on the synchrolift. Can a flexible attitude be taken with regard to any future issues with the lift? I wish to raise the issue of rents and leases and property charges in the case of people leasing property from the Department of Agriculture, Food and the Marine. These are not covered in the charges under discussion but they will need to be discussed at a future date.
Does the Department propose to deal with those rents and property charges at the six harbours by way of another statutory instrument?
Mr. Cecil Beamish
I will deal first with Deputy Pringle's question. I did not say there was not a submission on cargo vessels; there were submissions from all categories but there was not a specific proposal. On the issue of the mackerel charge, the Minister chose to go from €10 to €14 in the context of the increased value of mackerel over the period since the 2003 charge of €10. The Deputy will be fully aware of mackerel prices. I am not fully clear on the point made about tendering for work in synchrolifts. It is probably a separate issue to the charging.
Companies in Killybegs have been tendering for work and part of that work would include a boat being on the synchrolift. They deal with the Department about charges and this caused difficulties for these companies when pricing work competitively.
Mr. Cecil Beamish
The Department operates by way of customers. The vessels and the vessel owners are the customers. If a vessel owner wishes to access a synchrolift then his or her account is charged for that service, as it would be for water or for landing of fish or whatever other service. The arrangements between a person tendering to do work for a vessel owner on the single synchrolift are private matters and the Department does not engage as these are matters between the vessel owner and the service provider who is tendering. We stay out of it.
The cost of the synchrolift is a commercial decision by the vessel owner. I presume the Department has no interest in that decision.
Mr. Cecil Beamish
The Department is interested in everything. The issue here is that the charges have been substantially reduced for going onto the synchrolifts and for the periods on the synchrolifts. This has been in response to various submissions made over a period by fishing industry interests relating to the access and use of the lift facilities. In addition, the structure put in place in 2003, which had a logic and a reason and was in response to requests at that time, was now outdated, and the 2012 order was a response to this situation. It is in order to facilitate trade and business on the synchrolifts and to facilitate the work of the industry in those areas. This is a responsive action to enable the use of these resources and facilities and to keep business in the harbours.
It is quite straightforward to calculate.
Mr. Cecil Beamish
It is a certain cost per day-----
Per day, up to 28 days.
Mr. Cecil Beamish
Yes, it is quite transparent.
It is €100 a day for 28 days and €200 thereafter.
Mr. Cecil Beamish
The costs are set out in charge No. 12 in the document. It is quite straightforward to estimate a costing, depending on the time. On the issue of rents, these are individual lease arrangements with the State. The lease details will be specific to the property or land and the duration of the lease. It is administered on the basis of the commercial value for that property. An independent valuation is carried out. It arises whenever a lease is up for renewal or when a rent is up for review and this depends on the original terms of the lease. Any dispute will be dealt with in an arbitration process and this results in a settlement of the issue for a continuation. The majority of individuals renting State properties in the harbours are in settled arrangements in respect of their rents and leases.
Are these upward-only reviews?
Mr. Cecil Beamish
I apologise as I have not prepared for this question. I am advised it depends on the terms of the lease entered into and when it was agreed. The change was made last year meaning that new leases are on the basis of new arrangements which do not have upward-only reviews but older leases may have upward-only reviews or may be static. This is governed by the general rule that has been set by the Government.
On behalf of the committee or more particularly, on behalf of Deputy Pringle and myself, I thank the officials for their forbearance in remaining. I have thanked the Minister earlier. I wish everyone, including the committee secretariat, the officials, the broadcasting staff and the ushers, an enjoyable break. I did not hear too many complaints when the Order of Business discussed that particular point this morning.
The joint committee adjourned at 1.20 p.m. until 2 p.m. on Tuesday, 18 September 2012.