We have been joined by representatives of the Dún Laoghaire Harbour Company. I wish to draw attention to the fact that while members of the committee have absolute privilege the same privilege does not apply to witnesses appearing before it. Members are reminded of the parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside the House, or any official by name or in such a way as to make him or her identifiable. I welcome Mr. Seán Costello, chairman, Mr. Gerry Dunne, chief executive officer, Captain Simon Coate, harbour master and operations manager, and Ms Adele O'Connell, financial controller and company secretary. I propose that we hear a short presentation to be followed by questions and answers.
Dún Laoghaire Harbour: Discussion with Dún Laoghaire Harbour Company.
Mr. Seán Costello
I thank the Chairman and members of the committee for the opportunity to make this presentation. I wish to introduce my colleagues, Mr. Gerry Dunne, chief executive officer, Ms Adele O'Connell, financial controller, and Captain Simon Coate, harbour master. Subject to your direction, Chairman, I shall make some introductory remarks to be followed by presentations from each of those individuals.
In giving some general information about Dún Laoghaire Harbour Company, unlike most other witnesses appearing before the committee today, we run a harbour rather than a port, which is an important distinction. It has a unique location. It is a leisure harbour close to a European capital. It is a statutory commercial body charged with maintaining and developing Dún Laoghaire Harbour essentially as a marine tourism gateway to Ireland. The harbour was built as a port of refuge somewhere between 1817 and 1842. It is widely recognised as one of the finest artificial harbours in the world. It controls an area of approximately 297 acres, 47 acres of which is land. At present the company employs 41 people.
In 2008, 627,000 passengers came through Dún Laoghaire, which is fewer than the 737,000 of the previous year. The main source of revenue to the company is from ferry operations. Due to a number of factors, this source of revenue will be subject to significant contraction. Dún Laoghaire Harbour Company is actively identifying additional sources of revenue to provide a substitute revenue stream in addition to making a contribution to its economic and tourism potential and that of Dún Laoghaire.
Over recent years, the company has invested significantly to upgrade the east pier, at a cost in the region of €6.5 million. This included the resurfacing of what is best known as the walking pier. Recently we opened the historic east battery to the public for the first time.
Mr. Gerry Dunne
I was appointed CEO of Dún Laoghaire Harbour Company in March 2009. My colleagues, Captain Simon Coate and Ms Adele O'Connor, will make specific presentations on facts and figures associated with the harbour and on the financial performance of the business.
As Mr. Costello stated, Dún Laoghaire Harbour Company operates modern ferry facilities and also the largest marina in the country for recreational vessels. There is capacity for approximately 800 berths. It has great infrastructure for those interested in sailing and there are a number of yacht clubs and sailing clubs, a diving school and other marine-related activities. It has become very successful in attracting and hosting major sailing events. In that sense, the harbour is very different from a traditional industrial harbour.
The challenge for the company is to ensure that the impact of the downturn in the economy and in tourism activity can be offset through generating sufficient revenue from a broader range of commercial operations. In 2008, the company had a turnover of nearly €11 million, representing a slight increase of 2% over the turnover for 2007. Our main source of revenue is from ferry operations. In 2007, passenger numbers fell by almost 15%. Apart from ferry operations, the main sources of income are berthing charges at the marina, parking charges and rental income. Over recent years, there has been a consistent decline in passenger numbers. It is inevitable that the profile of ferry usage and revenue associated with such usage in the harbour will change.
Stena Line is, has been and, I hope, will continue to be a valued customer. For the past 15 years, it has developed the Dún Laoghaire-Holyhead route, the focus being on the HSS Stena Explorer vessel. Due to the unsustainable energy costs of the company and falling tourism numbers, this type of vessel is no longer commercially viable. We are investigating additional revenue streams and also seeking to realign our cost structure to reflect current rather than historic realities. Stena Line, at its peak, was operating five sailings per day and it is now operating one per day. The majority of the restructuring will, I hope, be of a voluntary nature. The consultations and negotiations with our own staff and unions began last June.
Dún Laoghaire Harbour Company continues to fulfil its core mandate of maintaining the harbour's infrastructure to a high quality. Over the past ten years, capital expenditure on maintenance and upgrading amounted to over €40 million.
Mr. Simon Coate
The new harbour is located on the south shore of Dublin Bay, just over 11 km south-east of the capital. Constructed between 1817 and 1842, it was the biggest man-made harbour in the country. It is formed by two breakwaters, commonly known as the east and west piers, each of which measures approximately a mile in length. There are anchorages outside the harbour, one just to the north east that can take 9 m vessels and another 2 km north-east of the harbour entrance that accommodates vessels such as the QE 2 or USS John F. Kennedy aircraft carrier. It is 17 m deep.
There are five berths. The first is on the east pier. It is the smallest and is only 76 m long. The second and third are on the east and west sides, respectively, of Carlisle Pier and are 139 m and 130 m long. They are not currently in use. The fourth berth is 142 m long and is on the east side of St. Michael's Pier. The fifth is a dedicated berth for the HSS Stena Explorer and cannot be used for any other vessel. All have a depth of 5.8 m. We are currently undertaking a feasibility study to examine the possible cost of extending the capability of Dún Laoghaire Harbour to facilitate larger vessels, be they ferries or cruise liners.
In 1996, when the HSS Stena Explorer was launched, the number of passengers was 1.6 million and freight amounted to almost 15,000 units per annum. In 1999, when duty free was abolished, passenger numbers had fallen to 1.3 million but the freight volume had risen to 40,000 units per annum. By January 2007, after the opening of the Dublin Port tunnel, and due to significant increases in the price of oil, the HSS Stena Explorer had reduced its sailings from five per day to three per day. Total passenger numbers declined to 737,000 and, critically, the freight volume declined to less than 19,000 units. The forecast for 2009 is a reduction in the freight level by 50% and a further reduction in passenger numbers.
With regard to Dún Laoghaire hosting major sailing events, we hope to host the biannual Dún Laoghaire regatta. The third one took place this summer and was very successful. We have been successful in attracting the youth world sailing championships in 2012. This is the gateway to the Olympic Games for talented young sailors and will attract over 60 participating countries. We have secured for the first time in Ireland the International Sailing Federation's annual conference, which will also take place in 2012.
Ms Adele O’Connor
As part of the development of the harbour, Dún Laoghaire Harbour Company has undertaken two major developments since its incorporation in 1997, the marina and the harbour yard development. The purpose was to build up solid revenue streams to broaden the company's revenue base.
The marina was developed in 2000 and provides 800 berths for leisure craft. It also included the construction of a breakwater. To fund it, we undertook a long-term loan of €11.3 million over 20 years. This will be repaid by 2022. The income from the marina from 2000 to 2008 was €5 million.
The harbour yard agreement involved a land swap that involved issuing a licence to develop a site owned by the company, in return for which the company received one of four mixed commercial residential buildings. We received a licence fee during the development stage and we have an asset at the end of the development that generates a steady income for the company. The revenue to date amounts to €6.6 million. The value of this asset is reflected in our balance sheet at €13 million.
Since 1997, Dún Laoghaire Harbour Company has accumulated retained profits of €34.8 million and has invested in excess of €40 million into the infrastructure of the harbour, both in terms of maintenance and capital.
Dún Laoghaire Harbour Company increased its turnover from €10.7 million to €10.97 million between 2007 to 2008, mainly due to an upturn in the marina income. There was a slight decline in the profits from 2007 to 2008. Operating costs increased from €7.18 million to €8 million, representing a total increase of €852,000. This was partly due to exceptional expenditure such as redundancy payments and rate increases. By 2008, the balance sheet reflected fixed assets of €67.7 million and a loan of €7.7 million, which was in respect of the marina development. The total number of employees at that point was 42.
Mr. Gerry Dunne
Dún Laoghaire Harbour Company is fortunate to have a unique structure in terms of its location, facilities and interaction with the wider community. The community's lands cover an area of 47 acres and there are very successful sailing clubs and events associated with Dún Laoghaire Harbour. Each year more than 1 million people walk the piers and surrounding area showing the popularity in general of the harbour.
As well as the significant tourism dimension and potential, the harbour company is located in a very vibrant residential and commercial area with excellent public transport links very close to Dublin city centre and with access to more than 1 million inhabitants in its broader catchment area. In Dún Laoghaire and the broader catchment area, there is a captive population, many of whom visit the harbour area every week year round.
The harbour, which dates back to the early 19th century, and its surrounding areas include a large number of buildings with a rich architectural heritage. In recognition of this in 2004 the company commissioned Shaffrey Associates, conservation architects, to undertake an inventory of buildings, structures and elements in Dún Laoghaire Harbour. This was a three-year process which involved consultation with a range of bodies including An Taisce. The report was published in 2007 and is available to the public through our website.
This year as part of an overall policy to achieve the broadest possible public access to the harbour, we opened the historic East Pier Battery to the public for the first time for six weeks until mid-October. Early next year, we hope to commence a sensitive restoration of the complex with appropriate restoration work which could have the potential to accommodate exhibition space and modest refreshment facilities.
As part of our progressive public access policy, at the end of August this year we submitted an application for a five-year temporary permission for Carlisle Pier which would enable us to fulfil the objectives set out in the county development plan. In September, following a public tendering process and on the basis of professional advice, we removed the derelict and unsafe structures on Carlisle Pier. An Bord Pleanála is conducting a review of this and we expect a report by the end of February 2010. Owing to the fact that the review process is under way, we are unable to elaborate any further on this matter.
Our plan for the Carlisle Pier reflects that of the draft development plan of Dún Laoghaire-Rathdown County Council in so far as it says specifically that the redevelopment of the pier must incorporate uses which will bring significant cultural, recreational and economic benefits to the area and must provide for a high degree of public accessibility and permeability with walkways, viewing areas and public spaces throughout.
On the ferry side, we have enjoyed a successful relationship with Stena since 1997. The current agreement was predicated on the HSS Stena Explorer. During its peak operations, Stena ran a schedule of up to five return journeys a day from Dún Laoghaire to Holyhead. For more than a year, the schedule has been reduced by Stena to one sailing a day. Next February the HSS Stena Explorer will be replaced by a smaller craft. In April 2011, the current agreement will expire. We are in active discussions with Stena and several other operators with the key objective of maintaining and developing our ferry business.
In line with a substantially reduced ferry schedule and a corresponding reduction in our revenue, we must address the organisational structure of the business. The company began an open consultation process with all staff last June, followed by a series of meetings between staff members and an industry expert, leading to the production of a report and recommendations distributed to our board and all staff in October.
At the same time, the company introduced a voluntary redundancy scheme which has received 11 applications. These are now being processed and the company is entering formal negotiations with the unions and hopes to reach a fair and equitable solution to the serious challenges facing the business.
The company is engaging with the trustees of the pension scheme, a defined benefit scheme, to agree a way forward in dealing with a significant deficit that has arisen owing primarily to the almost 40% fall in equity values in 2008. There are four trustees, three of whom have been newly elected and two of whom are elected by the staff. Pension challenges have also been experienced by several other port companies. We will have a constructive dialogue with the new group of trustees over the coming months, presenting our proposals to the pension board by December 2010.
Notwithstanding all of this, the company has a strong balance sheet even though it is experiencing significant challenges in its revenue base. We have commenced a major feasibility study to determine the viability of a public private partnership approach to funding the long-term development of the harbour and to developing marine, leisure and tourism attractions and facilities. To this end, earlier this year and following an open tender process, the company engaged consultants to work with us on this study. The results of the study will establish the viability of the company to attract sources of finance for the development of such new attractions and facilities.
Part of this feasibility study will examine successful marine leisure harbours in other cities internationally where harbour areas have developed facilities in response to and with relevance to their current and historic contexts. The range of opportunities for Dún Laoghaire Harbour is quite wide, including cycle and pedestrian routes, sensitive conversion of former coast guard cottages for tourism uses, open-air markets, a cultural and heritage centre at the East Pier Battery, a children's centre, an art gallery, development of facilities for cruise ships, development of renewable energy facilities, boardwalks and sea sport activity centres. We believe that in the medium to long term such development will lead to much needed economic and employment opportunities for Dún Laoghaire Harbour and the surrounding area.
The HSS Stena Explorer schedule has gone from five sailings a day to one. Does the company see any revival of this service or the development of an alternative service? Has the company examined the harbour’s feasibility in handling new types of ferry services?
The company is to be complimented on its performance on the leisure side of its facilities, not least the sailing end. I had the pleasure of opening the new harbour in 2001 when Minister for the Marine and Natural Resources. As was shown in Galway over the summer, there is significant business in sailing. Is there any way the company could be involved in the development of other harbours' marina facilities?
I welcome the company's feasibility studies on the role of public private partnerships in this area. Will the company comment on attracting public private partnerships and the success of its one?
Mr. Gerry Dunne
Regarding the ferry situation, we are not at all satisfied we should stay still and accept the decisions made by the main ferry operator into Dún Laoghaire for the past 15 years. We intend to renegotiate a post-2011 contract with Stena and rebuild that route with and through Stena over the next three to five years. Notwithstanding that, we do not want to have all our eggs in one basket. We have spread our net through Captain Coate in talking to several other ferry operators who may see an opportunity to develop business between Dún Laoghaire and Britain or even further afield. As these are ongoing discussions, we will have a good update in six months' time.
It is fair to say the company has developed an expertise in the marina business. One item on our agenda for the overall public private partnership process is to determine what direction marina development should take. It is early days for the process. It began in October and has a window of five months to complete its work. I hope we can come back to the committee when the PPP feasibility study is finished.
I welcome the delegation. Is it not the case that the harbour company put all its eggs in one basket and relied far too much on Stena? Stena has now put a gun to its head and said, in effect, that if the harbour company does not do what the ferry company wants in the harbour, it will greatly reduce its funding. Effectively, the harbour company has wasted time instead of getting new business and asking other companies to come forward. It now finds itself with all its eggs in one basket.
Looking at the accounts it seems that, because of the threat from Stena, the harbour company is faced with a shortfall of €5 million. The revenue shows an enormous €5 million gap, which is an astonishing situation to have developed. Regarding Stena, does the harbour company accept it has not done its business in getting new business? Based on the accounts and the information sent to us, is it not fair to say that this is a company top heavy with management? I see, for example that among a relatively small staff there are five or six major managers, three or four of whom are present. It seems that very well remunerated senior management are a major drain on the company's finances. I note that the outgoing chief executive, Mr. Michael Hanahoe, got a total package of €221,000, representing a basic salary of €154,000, with a total cost to the company of €268,000 and that Mr. Dunne will cost the company €174,000 in 2009. These are very high salaries in the public sector at a time when we are looking at all those matters.
I understand that 12 staff have expressed interest in the redundancy package on offer and, in the event, they will not get a pension until the age of 65, despite the fact that the outgoing chief executive enjoyed his full pension rights from the moment he retired. The company says that owing to the performance of world equities, the pension fund is in serious difficulties. What is the total deficit? It looks as if, under Mr. Dunne and the previous chief executive, the pension fund has effectively been allowed to deteriorate. We are looking at a situation now where major contributions will be necessary from the company to bring it back into balance. Perhaps the company might have to come up with a very large sum to achieve stability in the pension fund.
We are fortunate to have as Chairman today a former Minister for the Marine and Natural Resources. When the leader of my party, Deputy Gilmore was Minister of State at the Department of the Marine in the mid-1990s, were commitments not made to the development of the harbour company to the effect that pensions had to be maintained? We have just heard from Foynes the type of measures being taken there in this regard.
The Dún Laoghaire Harbour Company is famous for having the oldest police force in the country in the harbour. In the proposed reorganisation is it not envisaged that a significant amount of that police force would be downsized, along with other major departments such as maintenance, cleaning and so on? It has been put to me by locals that Dún Laoghaire Harbour is different from Dublin Port. People can go as far as the O2 on the East Wall and then Dublin Port effectively belongs to the Dublin Port Company. However, Dún Laoghaire Harbour is famously shared with the public. The harbour company has an enormous public role as a public company in managing and controlling that. Therefore a proposal to withdraw night-time and evening cover by harbour police appears not to be in the public interest.
In general terms, this committee shares the grave concerns raised about some of the company's operations regarding the pension deficit and the proposed reorganisation which may produce a result that is not in the best interests of Dún Laoghaire and the surrounding area, as many people see it.
Mr. Gerry Dunne
On the pensions side, we take very seriously under the terms of the Harbours Act 1996 the fact that we are legally obliged to operate a defined benefit scheme. The collapse in equity and other funds in recent years has eroded much of the value, especially the contributions put into the fund. The company makes a contribution of 24.3% of salaries. The current deficit as defined by the minimum funding requirement is €2.4 million and it is very serious. Facing into the future with reduced revenues from existing sources, as referred to, is a major cause of concern and one we have to address seriously. We have formed a new group of trustees, three of whom are brand new in that sense and two of whom have been elected by the staff. Our plan is to work actively with that group and the company to try to arrive at a resolution that is in the best interests of all.
On the ferry side, it could be said we were the beneficiaries of a very attractive agreement with Stena made many years ago. Stena, as Captain Coate indicated, has exclusive use of two of the berths, particularly berth No. 5. This meant, because these were the only two working berths, that we could not contractually take in new operators. We have until 2011 to try to attract new operators and persuade Stena to stay with us and further develop the business. That is what we are trying to do at the moment on the ferry side.
Restructuring envisages that the management numbers will come down from six full-time equivalent managers to 3.5. That, by any stretch of the imagination, is a substantial reduction.
There will be no harbour master from now on.
Mr. Gerry Dunne
Captain Coate will be retaining the role of harbour master but on a part-time basis. When I say 3.5, even though it is not nice to describe a person as a half, Captain Coate will be taking on the responsibility of harbour master in a part-time capacity. On the management side we are very conscious of the fact that we have to make reductions across the board.
We have made a commitment to our board that we will not ignore the harbour at night-time and that we will have cover with the harbour police at night-time. We are working with and through the unions on that at the moment.
Will there be personnel on site?
Mr. Gerry Dunne
There will, absolutely. That is the commitment to the board. In terms of the overall staff position, we did an independent report and the staff were invited to participate in the consultation process. The report was very clear and it was provided to all board members and the entire staff. All staff members were invited to participate in the process and contribute to it. The report was conclusive and recommended a significant reduction in our overall staffing level, including management, to cope with the reduction in the business.
Will the chief executive say whether the company acted on any of the positive ideas to come from those consultations? A view has been put to me that it is somewhat akin to the problems, from my side of the House, that we have with the national Government. In other words, we would see a positive redevelopment of the country, despite the state of the economy, as being the best way forward, whereas the difficulty I have with the Government is that it seems to be opting more for cutbacks rather than taking a more positive approach.
I recognise and commend the work that has been done on leisure activities and if I get the opportunity I shall ask about those. Would the chief executive not agree, however, that rather than having a more positive redevelopment and expansionary approach which involves more jobs, the company might be taking a more narrowly focused cutback route involving fewer staff and that because of this it will simply not have enough personnel to manage?
Mr. Gerry Dunne
We are caught between two objectives. One is to try to protect the company and the staffing levels and the other is the commercial reality of what our income will be for the short term, and that may be a two to three-year period. We are optimistic that in time, through the type of initiatives I described under the PPP, we will increase the level of business. There will be different types of business. There will be leisure business and so forth. Renewable energy is one area we are examining but there is a short-term problem and our immediate approach to that was to examine a voluntary redundancy scheme. It is a generous voluntary redundancy scheme and 11 people so far have applied. If there is a 12th person I am not sure who that is but so far 11 have applied for that.
Our intention is and always was to deal with staff in a fair and equitable manner. We are entering the next stage of discussions with the unions and the staff — we had our first union meeting yesterday — with a view to finding an equitable solution. We are not in a particularly critical position but it is one we must discuss with and through the staff and their union representatives to at least try to find a short to medium-term solution, while at the same time trying to build up the business again by examining new revenue streams. I hope that answers the Deputy's question.
I believe I first met Mr. Dunne when he was in Dún Laoghaire Harbour some nine years ago along with the Minister at the commissioning of the Granuaile. I was a Commissioner of Irish Lights at the time. If I recall correctly, he was suffering from a very bad cold at the time but he braved the chilly air and came out, for which I am thankful.
I welcome the Dún Laoghaire Harbour Company representatives. I want to ask them about the company's future business, its pension fund and built heritage. I will start with the company's future business.
Many speakers commented that the company has been very dependent on Stena. It also has an income from offices, the marina and parking. Can the company diversify into cruise traffic? What kind of vessels could be brought in? What type of tonnage of cruise vessels might the company be able to accommodate and what depth of vessel could be brought into the harbour?
In terms of the company's future business, I am concerned that it is over-dependent on car parking. The residents of Dún Laoghaire would not be enamoured of the rates the company charges for car parking. What used to be a relatively easy job of parking and going for a walk on the pier is now dominated by the need to put sufficient money into the meter. The company has put a charge on almost any piece of tarmacadam within its boundaries, if not beyond, and the residents of Dún Laoghaire are concerned about that. I am concerned that the company is over-dependent on car parking. The representatives might address those issues.
The second issue is the future of the company's staff and what appears to be the very serious position of its pension fund. Its staff are growing older yet from what I hear the pension fund seems to have dropped considerably in value. The representatives might comment on the percentage of the fund that is in equities and the future of the fund.
I want to ask a direct question. Has anyone who has taken redundancy or retired received their full entitlements? There is a view that some people received their full entitlements but others had to defer them. The representatives might address that question in their response.
Looking at the company's accounts I am concerned about the figure of €105,000 for conciliation that went to four different consultants. That seemed to relate mostly to the east pier but it is a significant number of consultants and a significant amount of money being spent on conciliation. The representatives might refer to that when responding.
I am concerned about the issue of the foot patrols mentioned by Deputy Broughan. The company has the second oldest police force in these islands. The harbour police force is in place since 1817 and I would hate to think that foot patrols would be replaced by closed circuit television cameras. The representative said it would retain staff but will those staff simply be looking at television screens or will they be on the east and the west piers? Security issues arise, particularly at night time. Over the company's almost 200 years of history the constables and police have carried out an important role in preventing people from harming themselves and in dealing with the ordinary police issues that arise in the harbour. I would hate to think we would lose that continuity and that level of security that the police provide by walking the piers.
The third issue is in regard to the built heritage. I commend the company on having commissioned an inventory of the built heritage within the harbour but I was outraged at its demolition of the buildings on the Carlisle pier. While no one will regret the loss of the 1960s ferry terminal additions, I could not believe the company would demolish the 150 year old railway buildings without going through any statutory process. As the representatives are well aware, I have a referral with An Bord Pleanála on that issue. I believe the company demolished those buildings illegally and it should replace them because over the month of September it wiped away 150 years of our architectural heritage in the heart of a heritage harbour. I am angry about that and I hope the company has retained the historic buildings, including the cast iron, which was one of the earliest railway buildings in these islands. I hope it has safely retained those buildings because I was taken aback that a semi-State body would demolish 150 years of history. I appealed to the company by way of telephone call and correspondence in the early weeks of September. I could not believe that not only would it demolish the 1960s buildings but that it carried on and demolished everything that dated from the 1850s. It was unfathomable that it would do that. I suspect it did it because it wants to park cars on the site. The company has a temporary planning application in for 100 parking spaces and I believe this was done so that it could have a cash crop of car parking. The old building would have been perfect for use during the Festival of World Cultures. In the month of December it could have located an ice rink there under the Victorian cast iron structure but it has wiped that away. It reflects very badly on the harbour company that it did that and on Mr. Dunne's tenure as chief executive.
I am conscious that the previous holder of his office, in concert with the county manager of Dún Laoghaire-Rathdown County Council, wished to build ten or 12 storey buildings on that pier. That was one of the excesses of the Celtic tiger. I do not believe it is suitable or appropriate to put in ten or 12 storey buildings along that pier and I hope the company will reconsider that proposal. I ask the representatives if they have put the Victorian elements in storage because they should be replaced rather than wiping away 150 years of history.
In terms of the future business of the harbour, I hope the company would examine the possibility of attracting cruise traffic if it has the capacity to do so. I am concerned about the staff's future. I understand the company is examining the question of voluntary redundancies but I would like the representatives to comment on the pension fund because I am concerned about that. Finally, I express my anger and outrage about the demolition on Carlisle pier and ask the representatives to tell me whether they have put the elements in storage.
The Deputy has put many questions and I will ask Mr. Dunne to respond before I call Senator Regan.
Mr. Gerry Dunne
I have noted five areas. We are currently doing many feasibility studies. One specific study is on the ability of the harbour company to attract new ferry operators and cruise ships. My colleague, Captain Coate, is leading that feasibility study so, if it is agreed, it would be appropriate to ask him to update us on how that work is going.
Mr. Simon Coate
To answer the Deputy's immediate question, Belfast and Dublin accepted approximately 80 cruise ships last year, ten of which we could take into Dún Laoghaire Harbour as it stands without doing any dredging and with very limited infrastructural work to the quay walls. One of those walls could be on Carlisle pier where we have not been able to take ships up to now. They are small. We talked recently to the agents who handle the ships and they are quite excited about this. I do not know if members are aware but ships of such size and bigger have been visiting Bangor in County Down which does not have any of the facilities we have. They anchor outside and use tenders.
That brings me to the second point, the short term. At one stage we believed tenders were not welcomed by cruise operators but now we find they do not much mind using them. In the short term we would encourage some of the smaller ships to come, perhaps as soon as 2011. The programme for 2010 is already prepared. At the same time, for a very small cost, there could be a facility to accept tenders and then bigger ships would be able to anchor outside. We have had talks already with Dublin Port. The Queen Mary is too big to get into Dublin Port which has asked us to share a facility such as I described. In the longer term, if we get the income, we could possibly adapt a berth and take the larger ships, perhaps even alongside, which would be very welcome to the cruise agents.
To return to the Chairman's point about ferry ships, one of the failures of the HSS was the high cost of fuel which was passed on to passengers. We believe the route to Holyhead is very strong. Some of the conventional ships are quite small and we can take them without doing too much extra work. The cost to the passenger will then come down. We think it is a very viable route and that we can do it with a conventional ship. It may be slightly slower but people do not seem to mind that.
Captain Coate said the Queen Mary is too big to come into Dublin.
Mr. Simon Coate
She came into Cork a month ago. She is not too big to tie up but with regard to swinging her inside the harbour, the master said "No" though the cruise operator said "Yes". The master came to look and said he could not turn her. The line has made approaches to come, perhaps next year or the year after.
It would anchor off.
Mr. Simon Coate
It would anchor off and use tenders that carry about 50 or 60 passengers at a time.
That is not a problem for the companies. They do not mind using the tenders.
Mr. Simon Coate
No, it seems not. The Queen Mary will have to do that.
There is an incredible opportunity to bring people in by tender and allow them walk up Marine Road to the town, the cafés and the bookshops. That is something Dublin does not have. It is unique to Dún Laoghaire and I would encourage the Captain on that. I am sure Senator Regan shares my sentiments on this issue. We would love to encourage the company in that direction.
Even Deputy Connaughton and I share the Deputy's sentiments.
Let it come to the west.
Mr. Gerry Dunne
We have formed a local stakeholder group, comprising Dún Laoghaire Harbour Company, Dún Laoghaire-Rathdown County Council, the local business association and the local hospitality sector. The reason we formed that group was specifically so that those people who would come off the cruise ships would find attractions, facilities and so forth in the locality and would not just get off and go down Avoca gardens or take the DART to the city. It is interesting when one looks at the cruise market that almost 90% of the economic value of the cruise opportunity is outside the port. The actual harbour fees associated with bringing in cruise ships are quite modest but the greater value lies precisely in the kind of things the Deputy was discussing: local tours, visiting heritage centres, restaurants, walks——
They could have afternoon tea in the Royal Marine Hotel. We could talk all evening on this.
Mr. Gerry Dunne
All of that. There are time constraints but I have another four points to cover for Deputy Cuffe. I shall comment briefly on the harbour police at night-time. I reiterate we have made a commitment to our board and the chairman and I have discussed the matter. There will be night-time cover in Dún Laoghaire Harbour. There was an initial suggestion that cover would be by way of closed circuit television or a remote control device of that kind but we have put into our plans that there will be physical night-time cover in Dún Laoghaire Harbour. The actual way it will work is now subject to discussion between Captain Coate, representing the company and as operations manager, and the unions and shop stewards. That is a commitment we made to our board.
I wish to point out very briefly that when there was a fire in the marina it took a considerable amount of time for the CCTV to pick up on it after the emergency services had been called and arrived. I have no great faith in CCTV.
Mr. Gerry Dunne
In terms of conciliation, the Deputy mentioned a figure of €105,000 in the accounts. It related to a major investment on the East Pier. This is something I inherited rather than was involved in. I ask my colleague, Ms O'Connor, to comment on the nature of the arbitration process, as distinct from conciliation.
Ms Adele O’Connor
We were brought into the arbitration process by the contractor of the East Pier Lower. That project was completed in around 2005, as I am sure Deputy Cuffe knows, being familiar with the area. However, we are still in conciliation. This would have been out of our control. We need to protect and minimise the risk to the shareholder and to do that, unfortunately, the process is costly. We need to employ experts to ensure we navigate the process successfully.
Mr. Gerry Dunne
I shall mention briefly staff and concerns about pensions. The Deputy asked specifically about presentative equities and staff entitlements. The presentative equities in the fund up to recently were in the order of 70%. That might have been deemed to be the appropriate percentage in Celtic tiger times. People who now adjudicate on the pension scheme would say, on reflection, that a greater percentage should have been put into bonds but it was not. I can say to the Deputy that I personally am very committed. I have set up monthly review meetings with the new trustees. We have also set in motion a scheme where the trustees can themselves take independent actuarial and legal advice. The board is determined to find a solution to the pension challenge facing it.
People who have left have received their full entitlement.
Mr. Gerry Dunne
Yes. Nobody has yet left under the current voluntary redundancy scheme. That is in process.
Have people who propose leaving been denied access to the fund in some instances?
Mr. Gerry Dunne
No. There is not an automatic entitlement to what is called cost-neutral early retirement under the scheme. That is not an entitlement. We have checked this out very carefully with our actuarial and legal people. In many ways, if there was such an entitlement we would not have been able to afford to give the generous voluntary redundancy scheme we have. We wanted to make that very clear to all staff members who were applying for voluntary redundancy before they actually signed on the dotted line. It is a question of affordability at the end of the day. After a lot of heartache and soul searching we have put forward what we believe is a very attractive voluntary redundancy scheme.
Might the outgoing chief executive have taken early retirement?
Mr. Gerry Dunne
I cannot give those details. I was not involved in those arrangements.
Perhaps somebody present could comment on that.
Mr. Seán Costello
I can tell the Deputy he did not take early retirement. His option was to retire at 60 or 65. He was retiring in accordance with his contract.
Do other staff have the option of retiring at 60?
Ms Adele O’Connell
No, this was a separate contract because he was the chief executive officer. He had the option to retire between 60 and 65 and availed of that option aged 63 I believe.
Mr. Seán Costello
I might expand on that because I know something of the matters concerning the outgoing CEO. His contract began in 1999 and was a specific contract approved by the Minister at the time. In accordance with the terms of that contract, he gave notice of his intention to retire at the appropriate time specified in the contract.
Were there trustees of the pensions fund?
Mr. Seán Costello
Absolutely. There were two recently appointed staff trustees, Mr. Ger Gilroy and Mr. Gary Kelly. Ms Adele O'Connell has also recently been appointed as a trustee, with Ms Margaret Madigan who has been a trustee for some time.
Was the chief executive officer a trustee at the time of his retirement?
Mr. Gerry Dunne
He was.
Who else was a trustee at the time of his retirement?
Mr. Gerry Dunne
Apart from Ms Madigan, there were three other trustees, one of whom, Mr. Michael Hanahoe, was the chief executive officer. He was nominated by the company and individuals elected by the staff to be a trustee.
I thank Mr. Dunne.
Mr. Gerry Dunne
I wish to address the fifth question on heritage. We have retained all of the materials which our conservation architect, Ms Grainne Shaffrey, considers to have historical architectural merit. We have included a reference to one truss and 50 iron columns in our submission to Dún Laoghaire-Rathdown County Council for temporary planning permission for the development at Carlisle pier. In ordinary circumstances, we would be prepared to elaborate on the matter. However, because the matter is under review by An Bord Pleanála, we are not in a position to make many comments. In the initial stages we received professional advice that the buildings on the pier were derelict and in a dangerous state. They also contained asbestos which had to removed in controlled conditions. We believe we acted in good faith and within the law, based on the professional advice we had received.
The advice the company received was wrong. I do not believe the witnesses are prevented from commenting on it, as a legal case is not pending. There is a determination by An Bord Pleanála on the basis of a referral; therefore, the delegation is not prevented from commenting.
Mr. Gerry Dunne
I can say——
I am upset that the delegation states one truss is in storage when I imagine that in the entire building there were 50 or 80 trusses.
Did the delegation receive permission for the demolition of the building?
Mr. Gerry Dunne
We examined the issue very carefully and had many discussions at board meetings. We specifically sought detailed and comprehensive professional guidance from planning and legal points of view. It was unambiguous and the board had a full discussion on the matter. It was the case that we did not require planning permission to proceed with the proposed works. We went to public tender in July and, after appointing a contractor, proceeded to start the work in early September.
From my reading of the advice given to the delegation by its professionals, it seems it could have gone down the path of referral to the local authority but it failed to do so.
It seems from what Deputy Cuffe said, given that it was such an historic building, it was a pity to demolish it.
Mr. Gerry Dunne
All I can say is that we took the best possible advice we could.
Why was it decided to remove it? What were the economic reasons, if any, for so doing? Was the building dangerous?
Mr. Gerry Dunne
If the Deputy is familiar with Dún Laoghaire Harbour, he will know it was an eyesore, something with which everybody would agree. It was derelict and there had been no public access to it for many years. The board took the view that it was a derelict structure which we should examine seriously and receive independent legal and planning advice on whether it should be taken down.
I have one final thought. Does the delegation plan to demolish any other buildings?
Mr. Gerry Dunne
We are compiling a very comprehensive master plan for the harbour which will be brought forward with reference to the Dún Laoghaire-Rathdown county development plan. All of the details of our proposed plan will be included in it.
I commend the harbour company for the efforts it has made to preserve the harbour and improve what is essentially a public space. Some €2.5 million was spent on the upper end of the east pier, €3.4 million on the lower surface and €1.6 million on the protected structure which is now the delegation's headquarters, all of which is very positive. Taking over the bandstand and ensuring it is maintained and the recent opening of the battery round tower at the end of the pier are in the interests of the general good and something for which the harbour company should be commended.
The revenue position is worrying. I am concerned that many investments were premised on the basis that there was over-development of the pier and, in particular, Carlisle pier. There was a plan to erect a ten storey building on it, which would have been inappropriate. From what I have heard today, I hope there has been a clear reorientation of policy, with the emphasis on marine leisure facilities in Dún Laoghaire Harbour. The attraction of cruise ships is a very interesting idea. However, I am concerned about the development of Carlisle pier along the lines of what the delegation's predecessors had initially envisaged.
I accept that what was done on Carlisle pier was based on good legal and planning advice and proceeded in good faith. The space is being returned to the public and a public space is being created. I am very attached to Carlisle pier which has a wonderful history. I shipped beef from it to Algeria in a 500 tonne vessel, as I did from Foynes which takes much larger vessels. Carlisle pier is of great importance and its restoration to make it available to the public is to be welcomed. I hope the development will stop there and that we will not have the proposed development to which Deputy Cuffe referred.
I seek confirmation on the reorientation of the policy and whether it will be the policy for the future because that is where we should be at. When I was Cathaoirleach of Dún Laoghaire-Rathdown County Council, I established a forum which was comprised of all stakeholders with an interest in the harbour and its relationship with the town. However, the delegation's predecessor was not very co-operative in participating with the forum. I am glad, therefore, that it has re-established a stakeholders' group because that is how the harbour can be linked with the town. The synergies are very important.
Having mentioned the investment the delegation has made in the public space on the east pier, I have a question concerning the west pier and the area stretching towards the Gut and Monkstown. The delegation does not have exclusive ownership of and jurisdiction over this space, but are there any plans to invest in and use it for revenue generation purposes for the company?
Mr. Gerry Dunne
I wish to comment on the reorientation of policy. Most people in the company realise there was a Celtic tiger element to previous aspirations in terms of developing major structures, including glass apartment blocks nine or ten storeys high and so forth. I speak on behalf of the chairman and the board when I say there is now a recognition that we have an historic and important national asset in the harbour which should be protected and developed as such and within which many cultural and heritage activities should take place. To think about the issue more broadly, that would be one of the reasons many cruise ships would be attracted to Dún Laoghaire and all it has to offer. I can confirm that that reorientation is on its way and is forming part of the brief to the public private partnership, PPP, team in its deliberations.
The west pier is arguably the Cinderella because it has been ignored for many years — most of the focus has been on the east pier, the Carlisle pier and so forth — but the former will form part of the PPP plan. The genesis of the PPP feasibility study was to examine Dún Laoghaire Harbour holistically all the way from, say, the Purty Kitchen almost to the baths and to look at all of the land and the assets both from a cultural and commercial point of view. We have to generate commercial revenue, particularly in light of the challenges that face us. Interestingly, in the draft county development plan there is zoning for significant commercial development on what we used to call the standage area, which is the big area where the HSS car parking and standage currently takes place. The answer is "Yes". We will look closely at opportunities in the broadest context in the west pier as well.
I have a question for Captain Coate about the cruise liners. Given that Dublin Port is already catering for cruise liners is there not some duplication in that regard? Will Dún Laoghaire take away business from Dublin Port? From his experience as a well-respected captain, generally speaking, does Captain Coate see much potential for the cruise industry around the coast? We heard from the Foynes representatives that the difficulty with the storms and so on would limit the potential of the west coast to cater for cruise liners.
Mr. Simon Coate
Yes. The advice we have got from the people who are already handling cruise ships in Dublin is that the smaller ships that we can potentially bring into the port in 2011 are being pushed further down the river as far as they can go without going under bridges, which does not suit them. We believe Dublin Port would not mind losing that. I do not believe we would have any problems in terms of getting the initial foot in the door.
In regard to whether it could be a problem if we are using tenders from a ship anchored just outside the harbour, I believe they allow for that in their itineraries because bad weather can occur virtually throughout the world, as we have seen, and it would be a very short trip in from the anchorage outside into the harbour.
I am talking generally about the ability of Ireland to develop more cruise business with stops in Foynes, Killybegs or——
Mr. Simon Coate
I understand it is growing——
Mr. Seán Costello
It seems to be growing at more or less 5% a year.
Mr. Simon Coate
——and it is about the only tourist facility that is growing at the moment.
We thank the representatives for attending and wish them the best of luck, especially with improving their ferry business and bringing it back to what it used to be.
Would it be possible to get a report from the board on the work it will be doing on restructuring to allow the committee to know what is being proposed and what is finally agreed?
Okay. They might send that to us.