My name is Paul Carey. I am applying for reappointment as chairperson of Galway Harbour Company. I was first appointed as a director in June 2007, subsequently became acting chairperson in 2008 and was appointed as chairperson the following year. My background is in construction. I graduated in civil engineering and construction management from Galway-Mayo Institute of Technology, which in my day was called the regional technical college. I have subsequently returned as an external examiner at GMIT and have forged strong links in supporting postgraduate programmes and research.
I founded my own construction business in 1998 and currently employ 26 people directly. We are fortunate that we never entered the development market and have no development loans or large redundant land banks. We specialise in industrial, medical device and health care projects.
I have had an interest in all things nautical since I was a young boy. I recall the port of Galway being a hive of activity with imports of fertiliser, animal feed and large-scale exports of product from the Tynagh Mines, together with the importation of oil. I should also mention that I am a keen sailor. While many of the aforementioned commodities no longer come through the port, Galway Harbour Company has not sat back and new products and new types of business have been sought. I will deal with this later in my presentation.
As stated, I was appointed in 2007. I believe I have made a valuable contribution to the harbour company and to its shareholder, the State. Some achievements and notable events during my tenure as director-chairman include the opening of the Enwest oil terminal in Galway, which has a capacity in excess of 35,000 tonnes of product and operates 24-7, thereby reducing traffic at peak times; and hosting the Volvo Ocean Race stopover 2009 and Volvo Grand Finale 2012. We are currently awaiting an independent report on the cost benefit analysis of the last stopover of the Volvo Ocean Race in Galway. I was also involved in restructuring of the pension fund, which is now in positive territory, with a reduction from €600,000 to €110,000 per annum in the annual company contribution; the rationalisation programme to ensure sustainability, which through a review of practices and costs has produced savings of €400,000 per annum, without any redundancies to date; and the reintroduction of Galway as a cruise stopover, with eight ships this year. I will outline later what the port has done in relation to this and the promotion of tourism in the west.
Other achievements include the review and updating of all leases on lands and property the company owns; procurement and installation of a 30 berth marina; an increase in bitumen imports and construction of the extended bitumen terminal; and continued growth in exports, including a new commodity, namely, refined sand for use in the manufacture of glass and food production, which is a local success story. McGrath Limestone Works in Cong in County Mayo has commenced exporting crushed limestone through the port. Laboratory tests have shown it has an extremely high purity and is low in iron; hence, it can be used in glass manufacturing as well as in the food and cosmetic industries. The company has established markets in Scotland, northern England and Sweden. More than 2,500 tonnes were loaded in one day last week and exported to the port of Ayr in Scotland. Samples have also been sent to Germany and southern England and it is anticipated this business has enormous potential. Galway is the only suitable port for its export as the nature of the product, which is bulky, makes it cost prohibitive to haul it by road to Limerick or Dublin. Jobs have been created in Cong, including in haulage and stevedoring.
Other achievements include the construction of a new multi-purpose slipway; partaking in discussion groups with the National University of Ireland, Galway, NUIG, GMIT, the Marine Institute, Údarás na Gaeltachta, IDA Ireland, Galway City Council and Galway County Council on the development of the brownfield lands in the existing harbour once the port is relocated and making this area a cultural and tourism support area, together with its being a hub for new research and development centres with a global impact in the marine, medical and technology sectors. This is an area we believe can be exploited to the good in Galway because of our links with NUIG, GMIT, IDA Ireland and the Marine Institute. There are a wealth of possibilities including tidal and wind energy, offshore exploration and so on.
I have also assisted in making the public and media aware of the current port, its facilities and our plans for the future, and interacting and partaking in negotiations with port users, Departments, future customers, State agencies, EC, civic dignitaries and so on. I have hosted a two-day public consultation programme in relation to the new port. On this note, the harbour company firmly believes in consultation through the preparation of the planning process, and consultations have taken place with many organisations, bodies and individuals, including the city and county councils, numerous resident associations, An Taisce, CIE, Department of Transport, Tourism and Sport officials, Department of Agriculture, Food and the Marine officials, Galway fire and rescue services, the Western Regional Fisheries Board, council members and Members of the Oireachtas, to name but a few.
I have also been involved in promoting Galway Port and the surrounding area as a commercial and tourist gem. I have hosted an international architectural competition for the development of the port. Last night, I attended the launch of Open House Galway, an annual event, which has become an international event, which promotes architecture. Events such as Open House Galway and Open House Dublin, which promote architecture, are held in the UK, the US and throughout Europe. It is important this is done in the current economic climate.
We have also hosted cultural events at the harbour and the World Power Boat Championships
Galway Harbour Company has 12 full-time employees. The Vision lands, which are the inner port, comprise approximately 32 acres and the Galway Harbour Enterprise Park comprises 45 acres. Approximately 500 people are employed in the Galway Harbour Enterprise Park. The principal lines of business are shipping, which while it has declined is still our main source of income; cruise liners, which are an expanding area; car parking; and as landlord to a number of properties. Imports and exports comprise largely oil. Bitumen, limestone and scrap metal are exported and we have imports of steel and coal. I believe we are the only port in Ireland importing reinforced steel for construction. All the rest of the steel comes in by road on ferries. Lydons in Galway is the only company importing it in bulk.
We have three car parks and on-street car parking yielding approximately €1 million per annum. The company is a landlord, holding 25 leases with a value of approximately €1 million per annum. We have approximately €1.4 million in borrowings, predominantly for the construction of an oil pipeline from the tanker berth to the new Enwest terminal, which we decided to undertake ourselves in order that we would have full control of it in the future. We also have some borrowings on a port crane.
In my submission I listed the company's financials for 2009 to 2011, inclusive. There is no denying that shipping has declined from €2.1 million to €1.6 million. Car parking and rental income have remained static. Employment costs have reduced following some rationalisation and our profit has increased.
I will give some statistics on port throughput. We had 229 ships in 2009, 211 ships in 2010 and 184 in 2011. The tonnage throughput in 2011 was 552,000 tonnes, a significant decline since 2005 when we hit the 1 million tonne mark. However, I think this further emphasises the need for us to develop, rather than contract, because otherwise we will lose some of our existing port business.
The highlights of 2012 to date include the final leg of the Volvo Ocean Race. We intend to lodge our planning application for the new port in the fourth quarter of this year. The decision to proceed with Article 6(4) of the habitats directive for the planning application is imminent. This will be an IROPI, imperative reasons of overriding public interest, application, as opposed to going through An Bord Pleanála, and we have a meeting on Monday with An Bord Pleanála to discuss this further and to agree the process. We have close working relationships with Galway City Council, the National Parks and Wildlife Service and the European Commission regarding the proposed development.
We have been granted multiple planning permissions this year for the retention of car parking and a new landing pontoon for the cruise line business. The harbour company has embarked on a campaign to promote tourism. A few years ago we had no cruise liners and we have had eight this year. We also have bookings for next year and the following year. This is a business we sought ourselves. We travelled to the United States and engaged with cruise line executives whom we invited to Galway with great success. On the night I met the first group, I mentioned to one individual that I could not wait to see one of his ships come up Galway Bay. When he laughed out loud, we were very taken aback. However, after they had seen the harbour's proximity to Galway city, the Cliffs of Moher, the Aran Islands, Connemara, Kylemore Abbey, Ashford Castle, Cong, and the Maam Valley, they were blown away. When I dropped him back to Shannon Airport three days later, he apologised, took it all back and said he would bring a ship here. This summer I am delighted to report that he kept to his word and brought a university ship that travels the world on semesters with 700 students. Not only did they partake in tourism, they also engaged with the colleges in Galway.
Other highlights include the additional pontoons and the extension of the marina. We developed a major new export line for limestone. We are about to sign a new lease with the Marine Institute for extended facilities to service its two vessels, the Celtic Explorer and the Celtic Voyager, whose home port is Galway. New sailing club facilities have been provided on the enterprise park. In excess of 500 people are going out on Galway Bay on dinghy sailing, racing canoeing, and so on. More than 20 clubs are accommodated in this new building, including the sea scouts who had no home for a number of years, and it is great to see them back in the port.
There is a continuation of strong financial performance and a pension fund surplus. Since we were first incorporated in 1996 the company has always traded profitably. We have just issued a new suite of corporate governance documents. We have a strategy for the future of Galway Harbour. This year we paid a dividend to the State for the first time in the company’s history. This is something in which I firmly believe and it is correct policy to do so. When I raised the matter at the company's board, it was debated and passed unanimously.
In the fourth quarter of 2012 we hope to lodge a planning application for the new port of Galway, which we hope will be granted in summer 2013. We anticipate commencing building in 2014 with the first stage complete in 2016. While a few years ago we all had grand plans, in the current economic climate we understand that projects need to be completed on a phased basis. We completely re-evaluated what we would do with our port and we have gone with a phased format, with the first phase costing approximately €50 million. By 2016 all existing business will have transferred from the old harbour to new port of Galway and by 2017 that will allow the old harbour to be developed to the benefit of the city. In 2018 we will commence stages 3, 4 and 5 for the new port.
I will outline my vision for the future of Galway. The port operates in the heart of medieval Galway city, within a few hundred yards of the city’s high street. Its location gives rise to tremendous opportunities but also to significant challenges. To overcome the challenges identified and exploit the opportunities, the harbour company management and board of directors have undertaken a strategic review of their current situation. From this review, a programme of action has been agreed which will protect the harbour business and return the inner harbour area to the city, separate but connected, different but complementary. It is strongly believed this development will reinforce the ideal of a real centre of trade in the west, honouring the city’s tradition as a large commercial port which is recorded in records dating back to the 14th century.
The strategy being employed is consistent with the Government's ports policy which has some central tenets, including the provision of adequate and efficient capacity into the future and acknowledging the long lead-in times in developing facilities and, as a result, the obligations on port management to act now to provide adequate capacity for the future on time. Regional ports have a major role to play in the health of local economies, and Galway Harbour Company’s management decision is based on clear business logic and reflects the goal as expressed in the Department of Transport, Tourism and Sport strategy statement to ensure investment in ports meets port capacity requirements and to facilitate the availability of commercial port services which are effective, competitive and cost effective.
Galway’s strategic location is recognised as a gateway under the provisions of the National Spatial Strategy 2002-2020, which is defined as "a city having a strategic location nationally and relative to their surrounding areas and providing national scale social, economic infrastructure and support services". Following on from the national strategy, the Regional Planning Guidelines for the West 2012-2033 acknowledge that Galway sea port is of strategic importance to the west region. The document states that the plan for the relocation and extension of Galway Harbour area, which includes deep water port facilities, has the potential to contribute to both tourism and enterprise in the local economy and is considered critical for growth in the region. The undisputed importance of the port and the development proposed is further supported in the Galway City Development Plan 2011-2017. The Galway Harbour Company’s decision to relocate its commercial activity and develop its lands is driven by an identified business need to protect, develop and grow the port business.
Galway needs to expand. We cannot stand still. If we do so in the short rather than medium term, it will not be cost-effective to bring business into Galway and we will be merely a landlord. Our port is both tidal and gated in that ships can only come into the port on high tide, which occurs twice a day. So we have a two-hour window every 12 hours to bring ships in and out of the port and we also have dock gates to hold the water in the inner basin. We are restricted on ship size - up to about 115 m in length and maximum tonnage is approximately 4,500 to 5,000 tonnes, depending on the tide.
We want to preserve existing business. If we do not expand, economies of scale will defeat us. An oil tanker with possibly 3,000 tonnes of fuel on board has a crew of approximately ten. An oil tanker with 8,000 tonnes on board has a crew of 11 - one extra man. It does not take three times the amount of fuel to steam it to Galway. Hence, oil companies, no more than everyone else, focus on margin in their business in these times and Galway will lose out if we do not expand. We hope to obtain new business and we have had several meetings on offshore exploration and the importation of biomass products to feed some of the power generating stations in the country. Our port is too small but we believe we can add value to that business if we have our new port. We have a rail link which would serve a new site being developed in Killala for the production of electricity.
In respect of tourism and cruise business, Galway is a jewel in the centre of a necklace of attractions for tourism, including the Cliffs of Moher, the Aran Islands, Galway city, Connemara and Mayo and the Midlands. I have also spoken about the utilisation of existing lands in the inner port to promote culture, tourism and employment. We have a strategy group which is reviewing what will happen with the brownfield lands and there is a firm belief that there is huge capacity to employ people in Galway in research and development, marine and, in particular, offshore energy. We have the Marine Institute and the colleges.
The planning for the new port involves reclaiming almost 24 ha of land. It will have 660 m of sheltered quays at a minimum depth at low water of 12 m and a turning circle of 400 m so we can bring some of the largest cruise liners in the world into Galway. We will have a fishermen's pier, a marina for marine tourism with 216 berths and a freight rail link. We will be connected to mainline rail. We will be developing 28 ha of port land and there will be opportunities for the deployment of ocean energy prototypes and an offshore oil and gas service base. We have had to turn down vessels for that at the moment because they are now too wide to come into Galway. Our dock gates are 19 m, while some of these vessels are in excess of 20 m wide. I believe some of them are coming from Scotland to service off the west coast. We have a nautical centre which will be further developed in the new port.
In respect of planning permission and IROPI, we believe that this is the way we will be going with our application. We have met with EU officials and engaged with An Bord Pleanála and the National Parks and Wildlife Service and that will be moving on this week. It will be the first IROPI case in the country and is a learning curve for all of us. The cost of phase one is approximately €50 million and funding will be from our resources. We have property we could dispose of. It is not as valuable as it possibly was a number of years ago but, in turn, construction costs have reduced dramatically. We would be hopeful of European funding. We have been told that there is no Exchequer funding at the moment and we take that on board but there are other forms of funding, be they public-private partnerships or sovereign funds from abroad. Perhaps cruise companies would look for a base they would have full rights to, as with offshore exploration.
In respect of an integrated approach by Galway City Council, CIE and the harbour company, CIE has a proposed development at Ceannt Station in Galway. I think that has been long-fingered in the short term but we have had various interactions on that to develop in tandem. Planning officials have requested that we work together in harmony to ensure there are no conflicts in our planning permission. In respect of Galway Harbour Village, which is the old port, I believe when the new port is built, that will open up the city. Rather than looking out to sea, people will look into the city and see what we have in it.
I would like to mention the new board but before I do so, I recognise the exceptional work the previous board members carried out on behalf of the company and its shareholder. As chairman designate and together with the CEO, I met with our three newly appointed directors last week and am excited about the valuable contribution each of them can make. Their previous experience in marketing, finance, commerce and local government will enable them to make a substantial contribution to our board. They will attend their inaugural board meeting tomorrow morning at 8.30 a.m. at the harbour office in Galway.
In conclusion, I believe I am an ideal choice of chairman to lead the Galway Harbour Company through the next few critical years of its development. I believe I possess the correct leadership skills, experience and ability to listen, comment and be decisive in representing both the company and its shareholder. Furthermore, I believe that the current proposal for development of the port has been well thought out and debated and has received valid input from experienced and competent experts in its preparation. To safeguard against the port of Galway becoming commercially unviable and the province losing its regional port, it is essential that the harbour company proceed with its current phased development plan. I take this opportunity to request that Galway, as a regional port for imports and exports, tourism, employment, culture and safeguarding the gateway to the west, be given particular mention in the current port policy statement which is being finalised and is to be issued by the Department of Transport in the near future. Finally, I thank the committee for allowing me the opportunity to make my presentation today as chairman designate and I will gladly answer questions to the best of my ability and take on board any comments that members wish to make.
