I welcome the delegates from the Port of Waterford Company: Mr. Stan McIlvenny, chief executive officer; Mr. Michael Flynn, chairman; and Ms Marie Aylward, finance manager. I draw the delegates' attention to the fact that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I propose we begin with a presentation by the delegates after which we will have a question and answer session. Is that agreed? Agreed. I invite the witnesses to make their presentation.
Waterford Port: Discussion with Port of Waterford Company.
Mr. Michael Flynn
I am chairman of the Port of Waterford Company. I am joined by my colleagues, Mr. Stan McIlvenny, chief executive officer; and Ms Maria Aylward, finance manager. Mr. McIlvenny will begin by offering a brief overview.
Mr. Stan McIlvenny
I thank the Chairman and members for the opportunity to make a presentation to the committee. We received very specific instructions from the clerk to the committee which I hope to follow to the letter. He advised I should speak for no more than five minutes and I will endeavour to adhere to that direction.
I will begin with some background information. The Port of Waterford, located in the south-east region, is one of the most efficient ports in the country, offering a broad and growing range of cargo handling and warehousing services. It is the nearest Irish port to mainland Europe and has always played a key role in servicing traffic to the United Kingdom and continental Europe. Some 2.437 million tonnes of cargo are handled at the Port of Waterford annually, which represents 4% of the goods transiting through Irish ports.
The Port of Waterford's ambition is to be Ireland's premier medium port for exporters and importers and to attract foreign direct investment. To underpin this vision, the port has invested heavily in infrastructure in the last ten years, including a relocation of the main port facilities downstream. In this context, several significant development proposals were undertaken in recent years to reinforce further the port's role as a key economic driver in the local and regional economies.
Since 1992, all cargo handling operations have taken place in Belview, four miles downstream of Waterford city. The Belview facility currently includes 450 m of container berthage, 400 m of general cargo berths and a privately owned and operated jetty of approximately 120 m. The site also provides substantial warehousing facilities of circa 30,000 sq. m and stevedoring services. Substantial future development works, for which the port company has planning consent, will create the development of a further 800 m extension downstream of the port and together with land reclamation will enable the creation of a significant further operational space for cargo handling and storage. The port company is both in the unique position of having planning consent for quay expansion and being capable of providing infrastructure incrementally as the market demands. The port company owns 60 acres of land adjacent to the terminal with planning consent for port-related activity. I have included an aerial photograph of this land with the presentation. In addition, the IDA has created a substantial business park adjacent to the port.
The port also owns lands and quays in the centre of Waterford, which was the original location for port activities. The operational use of the inner city berth has declined over the years to the extent the future of these berths lies in their redevelopment for a range of mixed-use developments. In particular, Waterford City Council's local area plan of 2008 proposes that the north quays should sustain substantial commercial development, which may include a venue building, hotel and marina, residential, office and retail uses, a cruise liner berth and public and pedestrian space, when the market permits.
The Port of Waterford's strategic advantages include availability of land adjacent to the port for port-related development and direct quay connection to the rail network. I also have enclosed some photographs pertaining to the work we do with Iarnród Éireann. In addition, there is opportunity for the port to leverage planning approvals and available land etc. to enter new markets. The Port of Waterford is located on the River Suir and geographically is the nearest Irish port to mainland Europe. The port is strategically located with regard to Ireland's two key markets, namely, the United Kingdom and continental Europe, and two thirds of the domestic market in Ireland falls within a 100 mile radius of Waterford. The port is served by improving road and rail access, which provides an attractive proposition for Ireland's importers and exporters. The N9-M9 Dublin to Waterford works are scheduled to be completed by 2010, as is the N25 Waterford city bypass. While other important road improvement schemes are at an early stage, they are not expected to be substantially complete before 2010.
The port handles a comprehensive range of cargoes including lo-lo, bulk liquid, bulk solids, break bulk and general cargoes. This business base is underpinned by a significant infrastructure investment programme in new port facilities at Belview. The existing wharf area at Belview covers an area of approximately 14 hectares, most of which has been reclaimed from the River Suir. The Port of Waterford also is unique amongst Irish ports in that it has no captive business and relies exclusively on its ability to compete efficiently and cost-effectively to attract business.
The Belview facilities include a 450 m lo-lo container berth serviced by two high output gantry cranes, 400 m of bulk cargo and general cargo berths, a 120 m private berth facility, 30,000 sq. m of general warehousing, which is in private ownership, and a 2,000 sq. m transit shed. We provide sheltered mooring for vessels and have a water depth of 6.5 m chart datum in the access channel. Therefore, the maximum vessel size, subject to tide, is 170 m in length overall and a maximum draft of 9 m, again subject to tide with no beam or air draft restriction. The N29 is a dedicated road link that links the site to the N25-E30 national primary and euroroute. As there is direct rail access to the Waterford to Rosslare railway line, the port is nationally connected and has a major rail siding. At present, the port company works six train sets per week and I have enclosed a photograph of that work.
These dedicated port facilities, which originally were developed in 1992, are part of a longer term phased programme of investment. Substantial development works are planned for future port expansion involving an additional 800 m downstream quay extension to handle lo-lo, ro-ro, dry bulk, liquid bulk and miscellaneous cargoes. The proposal also allows for capital dredging to depths of minus 7.2 m chart datum, which would provide deeper water to accommodate the increasing use of larger size vessels across all key trades but which affects the container trades in particular. The expansion proposals may also include a new bulk liquids terminal. The port company already has received planning permission for its phased development at Belview as a multi-modal port. The concentration of port activities downstream at Belview presents an opportunity for significant waterfront development opportunities over time, particularly along the north quays, to support the city's economic regeneration initiatives.
I thank Mr. McIlvenny. Does any other witness wish to comment?
Mr. Michael Flynn
We are open to questions from members. A key point is we believe the port is extremely well set in respect of its facilities and its possession of planning permission for the future.
The planning permission pertains to a substantial amount of property.
Mr. Michael Flynn
Yes, but the port's view is that it is there. While we have made the investment to get planning permission, no development will take place without a strong business case to support it. We would not simply go ahead and build and then wait for business to come. We will wait for and investigate appropriate business opportunities and then go ahead. However, the existence of the planning permission means that should suitable opportunities arise from industrial development or otherwise in the area, we would not be constrained by the timespan required to seek planning permission.
I have one further general question before I call Deputy O'Dowd. As the witnesses may be aware, the joint committee is meeting all the port companies. Where will Waterford fit into the overall national port profile during the next ten or 15 years? Given the much greater tonnages that now are coming into ports and so on, where will Waterford fit into the overall picture in the future?
Mr. Stan McIlvenny
The Port of Waterford has certain advantages. Its geographical location as the closest port to the great ports of the central European corridor gives it an opportunity to attract more business. There are a couple of issues to which I have alluded previously, one of which is that we have planning consent. We sought and secured consent some years ago, which recently was renewed, for another 800 m of quay. We also have planning consent for a pontoon and linkspan for ro-ro services.
Does the Port of Waterford intend to adopt such a ro-ro system? Do the witnesses envisage a significant opening in Waterford for such a system?
Mr. Stan McIlvenny
The direct answer is "No" because of the present state of the economy, which is the biggest risk for all of our business. It is difficult to know what our customers might do in the coming two years. Nonetheless, it was strategically prudent from our perspective to seek planning consent for such a facility. I am not in a position to say whether the consent is something we could exploit in the coming years.
Given the river regime on the River Suir, we can reduce the river to at least 7.2 m relatively easy. We know we can reduce it to below 6.5 m. It involves a cost, but it could be done without resorting to specialist dredging techniques or blasting.
I welcome the representatives from the Port of Waterford Company. Waterford is a fine city which I have visited a few times. The water feature as one enters the city is magnificent. One would like more ships to use the port, although Mr. McIlvenny seemed to imply that the future is downstream.
I live in Drogheda, which is also a port town, but there was a controversy between the Cork and Waterford port companies. I want to ask a constructive question. In light of the Harbours (Amendment) Bill 2008, which is before the Dáil, is there room for co-operation between the authorities? Could it resolve issues of economies of scale, efficiencies and so on?
Mr. Stan McIlvenny
I thank the Deputy for his important question. It is Government policy that ports should explore the possibility of co-operation in some way. From Waterford Port's perspective, this matter has been discussed at board level as part of the port's strategic development. We are open to dialogue with any and all ports in or outside the island. Our remit is to enhance the local economy and to provide facilities of national strategic interest and importance. The board has held two conversations with the Cork authority — I was involved in one and the other occurred prior to my arrival — about collaborative approaches, alliances or whatever one wants to call them. It would make sense.
Regarding the point on Cork and Waterford ports, the latter's directors found it difficult to understand why they would invest nearly €250 million in a new facility in the south east that would only provide a service to the south east. In their evidence to the committee, they suggested their captive trade was as far north as Dungarvan. We told Cork Port that, if we and it undertook a joint venture, for which we have planning consent, rather than a joint company and constructed something at Waterford Port, together we could service Munster, the south west and even Dublin, as a great deal of our business uses the M50 corridor. It made sense to us that something constructed at Waterford Port may have been strategically more important to the State.
I welcome Mr. McIlvenny's key point, namely, that the port authority is happy to co-operate on joint ventures inside or outside the State. Under the Bill, port companies will be allowed to raise their own funds to a maximum of €200 million or 50% of their assets to invest inside or outside the State. I am not looking for specifics on locations, but do our guests have plans to invest or use those funds in respect of overseas interests?
Mr. Stan McIlvenny
The short answer is "No", but I will expand on it. Previously, we sought an alliance with a major shipping company. I keep reverting to the economy, which would not permit such a project to proceed at this time. We have an open mind regarding alliances, mergers and joint ventures. In fact, it is a strategic policy of the board.
I do not want to labour the point and I appreciate Mr. McIlvenny's replies. It is key that, when the Bill is passed, it should allow port companies to become more dynamic and to raise their funds to invest nationally or internationally. Key to Fine Gael's considerations is that, as sustainable an economic entity as Waterford Port already is, it could grow further so as that efficient exports through it could build up businesses, jobs and so on. We wish our guests well in their ventures and hope for their success.
Mr. Michael Flynn
The infrastructure around Waterford — the new bridge, which is nearing completion, the road network to which Mr. McIlvenny referred, any further developments downstream at Belview and container traffic taken by road or rail, which links directly to the port, is of significant benefit. Any growth in the port will mean its traffic need not go through the city. This is a major plus, since anyone moving goods out of the port will immediately be able to enter a new network, which is nearing completion. This will be of strategic advantage to the port.
I thank Mr. Flynn.
I welcome the delegation. Waterford's figure for non-unitised tonnage fell by approximately 4% last year. What is the indication for this year? Will the tonnage fall further? In terms of customers having quicker access to the port, how important are the current road developments? Do they mean that a certain amount of traffic to the port will not need to pass through the city? I am referring to the new river crossing and access road.
Concerning the deep water improvements that would accrue from the dredging in question, is the trend for larger container ships? In terms of attracting people, in which direction is business moving? What can the State or the Department of Transport specifically do in the short term to assist our guests in planning for the economic upturn, which will come in its own time?
Mr. Stan McIlvenny
Perhaps I will take the last question first. From time to time, there can be delays in renewing licences to dispose of dredge spoil. The recent renewal caused us some difficulty. The licences are necessary, but we would be eternally grateful if the process through which we must go to acquire one was accelerated.
From the perspective of the port as opposed to the board itself, there is a foreshore issue. There must be greater haste in the regularisation of applications for foreshore licences. It is not unusual for a port to wait ten, 12 or even 15 years for a lease to be issued, by which time the port has invariably built on the foreshore anyway. The State could help with these two matters.
Deputy O'Shea mentioned the roads and tonnage. In keeping with all other ports in the State, our unitised business last year fell by approximately 8%, which is just short of the ports' average. So far this year both bulk business and container business has declined. With the decline in the construction sector——
By how much has it declined?
Mr. Stan McIlvenny
It is early days but the indications of a decline of 20% in unitised business would not be unusual. The jury is out on bulk business because much bulk commodity is seasonal. We know there has been a decline in fertiliser this year. Last year, much fertiliser came into the country. As a commodity its price was high and there was not take-up by farmers of as much fertiliser as came in.
Mr. McIlvenny is speaking to an end user. I know what he means.
Mr. Stan McIlvenny
Then the Vice Chairman understands that the people from whom he buys his fertiliser were left with significant quantities. That had an impact. Our business is down this year. I may have missed one point raised.
How significant is dredging and being able to handle larger ships?
Mr. Stan McIlvenny
As the world economy evolves, everyone is looking for economies of scale. One can get these by chartering, buying or building larger vessels. That was the case until a short time ago. There is no one pressing the Port of Waterford to provide deeper water for vessels. We bring in the largest vessels that come into Irish ports, some 900 TEU, and this is the type of vessel we deal with currently. We can cope with that two hours either side of high water. No one is pressing us to take larger vessels but we know that if there is major pressure to do so, we could provide deeper water relatively easily, subject to acquiring the necessary licence to dredge.
Where does the problem with the licensing issue arise within Departments? What happens to drag out these foreshore licence applications to ten or 14 years?
Mr. Stan McIlvenny
I can give the port perspective on this but the question might better be directed at the Department of Agriculture, Fisheries and Food. We go through an extensive process of public consultation to acquire leases. We comply with rules and regulations in double quick time. From there, it seems to languish.
Deputy O'Shea's point is that there must be something amiss if it takes that long. The result will be based on the application made so there is nothing wrong with that side of it. Why is there such a delay? These are the matters we are trying to find out about on this committee so that we can do something about it.
Mr. Stan McIlvenny
Frankly, I do not know. We have gone through the process diligently and fulfilled the criteria. No one has said that we have not fulfilled the criteria but the process seems to stop. The Department of Agriculture, Fisheries and Food deals with this and the answer must come from the Department.
We will have to find that out.
Mr. Stan McIlvenny
We would be grateful if the committee would examine it.
I welcome the representatives from the Port of Waterford. Mr. McIlvenny was asked about what happened to Waterford and Cork, an issue that went nowhere. Any business, whether port related or not, must collaborate more and be of a certain size in order to survive. If collaboration with Cork will not work, the obvious step is to look elsewhere. The first place to look is Rosslare but that is fraught with all sorts of difficulties. Legislation in the UK would have to be changed so perhaps it is not a runner. Is Dublin a possibility? Could the two ports co-operate?
Mr. Stan McIlvenny
The short answer is "Yes". The Port of Waterford is exploring possibilities and the committee will forgive me for not expressing what that might be in an open forum. The Deputy is correct that co-operation between ports based on geography is not the answer. From a national strategic perspective, there is merit in analysing alliances further afield.
The Vice Chairman referred to the new roads infrastructure, which should be of great assistance to the port. Mr. McIlvenny referred to six trains per week leaving it. There is a rail network going right into the port. At one time, five or six trains a day moved in and out. I thought it was a sensible way to move goods around the country. Is there a problem with co-operation from Iarnród Éireann? Are they not upgrading track facilities? Why is more use not being made of it?
Mr. Stan McIlvenny
There are many arguments put forward by those opposed to freight on the rail network but not so many years ago 26 trains a week worked at Belview, in the Port of Waterford. There were up to 60 train movements a week. The trains arriving at Waterford are provided by Irish Rail to DFDS Seaways and the latter accepts all responsibility and risk arising from this. It is the proper way to go.
Over the years, there has been a decrease in the number of train sets available for this sort of work. There is an issue with funding. We see rail as important to the future. Multi-modal facilities are an important aspect of providing an efficient service to importers and exporters on the island of Ireland. I champion rail and recently wrote an article on it that was distributed to Members of the Oireachtas. There is co-operation with Irish Rail, which provides the sets required. Another port is not directly rail connected but is considering taking a train set.
Where did Mr. McIlvenny say it was?
Mr. Stan McIlvenny
Another port has the opportunity to do this and is examining having a train from the west running to it. Ten years ago there were 26 trains a week, and sometimes 60, into the port of Waterford. I am convinced it has a future.
Where is the main area of expansion, perhaps an area where the port is not involved at the moment? Bearing the landbank in mind, is the IDA making enough of an effort to bring port-related industry to that part of Waterford and south Kilkenny?
Mr. Stan McIlvenny
I am not trying to fudge the question but that is best directed at the IDA. The IDA has proactively constructed a new park adjacent to the port. The first client is about to submit a planning application to Kilkenny County Council. That company is Servier Ireland, which has a presence in Wexford, and wants to set up a manufacturing facility. It has constructed a new business park and attracted its first client so we are very happy with what is going on.
Are there any other areas of business that could be targeted?
Mr. Stan McIlvenny
That is very difficult to answer. We do all the various types of business that a port would be expected to do. Deputy Kenneally is absolutely right, the Port of Waterford is located in what is a mostly agricultural rural setting in south Kilkenny. We have an extensive landbank and an ability to increase it because ports have CPO powers and it is a rural agricultural community. There is no conflict between what the Port of Waterford wants to do and civic aspiration.
To give a specific answer to the question, there are opportunities for increasing lo-lo or bulk business, which tends to be for the rural community which the port serves. That will increase only as the economy improves, particularly the agricultural economy. Logistics parks and hubs are very important. Distribution will be key to future efficiencies and having the landbank provides an opportunity for the port to exploit that. I believe there will be opportunities in logistics.
With regard to the future of the ports, particularly Waterford, given that it is situated in an agricultural setting are live cattle shipped from it? Has this happened in recent times?
Mr. Stan McIlvenny
Live cattle were exported through Waterford until five years ago. To be frank, I understand it ceased because of a change in legislation and an ability to get better value downstream rather than export the cattle.
What I mean is that it is done through other ports. We are exporting 40% more live animals this year than we did last year. Why does the Port of Waterford not have a cut of this action?
Mr. Stan McIlvenny
The current export of live cattle is on trailers.
Indeed it is.
Mr. Stan McIlvenny
This is ro-ro and the Port of Waterford does not have a linkspan——
It does not have that facility.
Mr. Stan McIlvenny
The export of bulk or herds of cattle, which were carried in the hold——
That is a different matter.
Mr. Stan McIlvenny
——stopped five years ago.
A couple of weeks ago we had a lengthy discussion with another port authority about the possibility of greater consideration being given to tourism trade. On that occasion, it was stated that a number of ports would combine together to bring tourists to the country. Where does the Port of Waterford stand on this?
Mr. Stan McIlvenny
The Port of Waterford is visited by approximately 22 cruise vessels per year and there is one at the City Quay today. We have continually attracted this number of cruise vessels. The demise of Waterford Crystal would be a problem; it was a major tourist attraction and if Waterford does not have a feature relating to Waterford Crystal I suspect that attracting cruise ships may become more difficult.
The Port of Cork and the Port of Waterford are actively involved with our colleagues in Wales and we have attracted INTERREG funding. The idea we had was wonderful but it may not be appropriate now because the price of fuel is down to $60 a barrel. We decided we could create a nice cruise itinerary within the Irish Sea, visiting six or seven ports in the island of Ireland, Wales and perhaps Liverpool. The steaming would be only 200 nautical miles so the saving in fuel for a cruise ship would be significant. When fuel was $150 a barrel the cruise companies encouraged us to do this. The situation has changed slightly but I have no doubt that the price of oil will increase and this initiative will bear fruit. We have forged alliances not only with the Port of Cork but with our colleagues in Wales.
The operating profit of the Port of Waterford was mentioned in the submission. How is this likely to compare with the profit from last year?
Mr. Stan McIlvenny
We are in open forum——
I am not asking Mr. McIlvenny to give us——
Mr. Stan McIlvenny
It will be significantly down on last year.
However, it will be in profit.
Mr. Stan McIlvenny
It will be significantly down on the profits in 2008.
For the record, will Mr. McIlvenny provide the committee with an idea of the workforce?
Mr. Stan McIlvenny
In total we have 50 employees.
How many did the Port of Waterford have last year?
Mr. Stan McIlvenny
We had 52.
How many will the Port of Waterford have at the end of this year?
Mr. Stan McIlvenny
That is a very interesting question. Two colleagues are retiring and they will not be replaced and one other part-time worker has accepted voluntary redundancy.
We are extremely grateful for the information that Mr. McIlvenny has imparted today. If there was a fairy godmother out there what would you like to see happening at the Port of Waterford in the next ten years? I am asking for a type of mission statement.
Mr. Stan McIlvenny
The Port of Waterford would be very keen to forge an alliance with either another port or a shipping company. Many Irish ports are finding life extremely difficult and there may be one or two casualties because they are limited liability companies.
This is the reason for this line of questioning.
Mr. Stan McIlvenny
It was always accepted strategy that the Port of Waterford would forge an alliance with someone else. To see the fulfilment of this in the next short period of time would be very useful. What we want to see most is an upturn in the economy because the port's financial fortunes are very much aligned with the national economy. As the Vice Chairman is probably aware there is a correlation between gross national product and unitised business. If the alliance and the upturn come to fruition in the short term the director of the Port of Waterford would be very happy.
Mr. Michael Flynn
I endorse everything Mr. McIlvenny has said. The policy of the board is to be very open and there is no parochialism. The board would be very open-minded about utilising scarce resources and scarce financial resources to ensure that the country gets the maximum benefit out of any investment in port infrastructure and we would like to play our part in that.
On behalf of the committee, I wish Port of Waterford Company well. Everything that has been said will be noted and we intend to compile a report after we meet all of the port companies. We greatly appreciate the fact that the witnesses came all the way from Waterford today.
Mr. Stan McIlvenny
On behalf of my colleagues, we would be delighted if the committee would visit us. We would be delighted to show members our facilities and to answer more questions.
I could think of worse places to go.
Mr. Stan McIlvenny
It is an open invitation and I will formalise in writing.
I thank Mr. McIlvenny.