Tá mé buíoch den choiste i gcomhair an chruinnithe seo.
My presentation follows on from a visit by some members of the committee to Dublin Port last July. I hope this visit provided a useful opportunity to see the operations of the port at first hand and to learn of some of the difficult and challenging issues facing us in the coming years. I recently made a presentation to the Joint Oireachtas Committee on Environment and Local Government. Members may not be aware but, at that meeting, Dóchas pointed out that the proximity between Dublin Port and Bull Island was a particularly good European example of how ports and nature can live together.
It may be useful for members if I outline some of the key facts relating to Dublin Port. As they are aware, ports in Ireland play a critical role in facilitating the vibrant economy that has accompanied recent prosperity and growth. The upturn in economic activity during the past ten years has been facilitated by the Irish ports but it has also placed increasing demands on existing facilities and raised serious capacity issues which need to be urgently addressed.
Dublin Port, for example, saw growth in excess of 20% over a four-year period between 2000 and 2004. Since 1992, there has been a fourfold increase in the throughput of Dublin Port. At present, 42% of Ireland's GDP is exported through Dublin Port. It is a significant and major aspect of national infrastructure. Container numbers are currently growing at a rate of 10% per annum at Dublin Port. To respond to this demand, we have continually invested in facilities to make the best use of existing land available to us.
Since 1997, the Dublin Port Company has invested more than €136 million on infrastructure improvements. It did so without seeking any Exchequer funding. At the same time, it endeavoured to keep charges to customers as low as possible, undertook cost reduction programmes and introduced competition within the port. Competitiveness is widely accepted as the priority issue for sustaining growth. The Institute of Management Development shows that Ireland's competitiveness slipped from fifth to 11th place between 2000 and 2003. The study further identifies transport infrastructure as an increasingly significant factor in this decline. The 2005 update of the study shows that our ports infrastructure ranks, on average, fourth from bottom in Europe.
Customers of the Dublin Port Company have a wide range of competing stevedoring companies and competing scheduled services from which to choose. It operates on a price competitive basis by national and international standards. The key challenge for Dublin Port is to ensure that it has adequate facilities available to meet projected demand and capacity in the coming years. In particular, it requires sufficient access to land that is adjacent to deep-sea berths, which are urgently needed. At present, it has access to all available deep water and shore-side facilities at Dublin Port but it has an urgent requirement for more. As trends in shipping continue to evolve and larger vessels which require larger berths appear, we need to keep pace with these developments. As a trading nation highly dependent on international trade, we require facilities to accommodate larger and more efficient vessels or else both importers and exporters will need to utilise less efficient methods of importing and exporting goods.
The Dublin Port Company has assessed that, on the basis of its current and projected throughput of imports and exports, it will reach operational capacity by 2007. From the end of 2007, the Dublin Port Company will not have adequate facilities to deal with the volume of business generated by its customers. The capacity shortages of Dublin Port have been recognised by the Irish Exports Association, the chambers of commerce, including the Dublin Chamber of Commerce, and IBEC. Consultants employed by the Department of Communications, Marine and Natural Resources have confirmed that Dublin and other ports are facing capacity shortfalls. It is worth noting that the consultants' projections are conservative and below ESRI projections. This year, Dublin Port has experienced growth of more than 10% in the lo-lo sector, while total throughput growth has grown by 7%. In addition, the economic consultant, Mr. Peter Bacon, commented on the urgent need for additional capacity to be created at Dublin Port to facilitate future demand. At modest growth rates of between 4% and 5%, our throughput is forecast to increase by 11 million tonnes by 2013.
It is important to recognise that if capacity shortfalls already identified are not addressed at Dublin Port, the consequences will be serious for all sectors in the economy. Exporters will face increasing delays and additional costs in terms of getting goods to market. There will also be delays and additional cost implications for the wide variety of raw materials and consumer goods imported to Ireland. These include food, white goods, vehicles, clothing, furniture and other necessary items used by people on a daily basis. At a time when there is an increased recognition of the rights of consumers, the efficient and effective operation of Dublin Port is an issue for all Irish consumers who seek low prices and wider choice.
As members who visited the port are aware, we have advanced a proposal to develop the north-eastern edge of the port in order to create additional unitised trade berthing facilities. The proposal involves reclaiming a new area of approximately 600 metres by 350 metres. This will involve the construction of a new quay on the southern edge, with the construction of ramps and other structures that are associated with the provision of such facilities close east. This proposal has been advanced by the Dublin Port Company in the context of few alternatives available. As we explained to members during their visit, the company does not have control over significant tracts of land at the port, which is held by tenants under long leases. We have endeavoured to recover land from tenants but this has been costly, slow and difficult and compounded by inappropriate landlord-tenant legislation. We are also faced with the challenge that much of the land currently held on long leases is remote from the deep-sea berths that are so urgently required.
We have made recommendations to the Government on the changes required to the landlord and tenant legislation to facilitate the effective operation of the port area and we hope that the Government can respond urgently to our request. The major strategic issue for Dublin Port is that there are no other facilities within the existing port where we can access deep berths. To meet the need for additional capacity, we must create extra deep-water berths and the only viable way of doing so is through the reclamation proposal advanced.
One other issue that has been mentioned is the possible relocation of the port. There are three fundamental problems with such a proposal. First, the development and commissioning of a new port is unlikely to be achieved with a ten-year period. I would be highly dubious that any alternative port required to meet the capacity currently served by Dublin Port could be operational in the medium term, given that more than 11 years have passed since the tunnel was given the green light. The extent of capital and construction works involved and the need to link infrastructure and planning issues involved should not be underestimated. The demand for additional capacity is immediate and not something that can be pushed off on a ten-year timescale.
Second, relocating the port has added complications, given that the market that Dublin Port serves has heavy regional emphasis. For example, 50% of imports and exports to Dublin Port remain within the M50 area, while 75% remain within 80 km of the port. Given that the market exists in the locality of the port, it makes no sense to relocate the port further from the market and, therefore, add to additional costs and delays as the traffic must trundle back into the city on the same overcrowded roads for a longer period. The most cost effective and environmentally-friendly way to bring goods to market is to transport goods to the heart of the market.
Third, relocating the port is likely to involve considerable direct and indirect capital costs. The previous suggestion to relocate Dublin Port north of Loughshinny in north Dublin in 1992 suggested that the capital cost would be €500 million at that stage. With increasing land prices, costs of construction and project costs, I suspect that figure is conservative. In addition, relocating the port at this stage would render the investment in the Dublin Port tunnel to be marginal.
Some members may wonder how the Dublin Port Company may seek additional land, while at the same time being associated with the development of a national conference centre on part of the lands at Dublin Port. I am pleased to have an opportunity to address this issue directly with members, even though I need to be circumspect in what I say, given that the matter is before the Minister for decision.
The task force on the development of port estates in commercial harbours indicated that all State and semi-State companies have a key obligation to maximise the use and value of State lands. In this regard, the Dublin Port Company attaches two key overriding criteria. First, utilising port land for non-port purposes can only be permitted if it does not negatively impact on the operation of the port. Second, before any development takes place, all necessary consents and permissions must be secured for the proposal both from Government and the relevant planning authorities.
In this instance, the Dublin Port Company received a proposal from the Anna Livia consortium to make land available in the event that the consortium wins the contest for the national conference centre. The company management assessed the proposal in conjunction with our legal and property advisers, Arthur Cox and Hamilton Osborne King. The proposal was fully considered by the board and unanimously approved by it in May 2005, subject to no diminution of operational lands, ministerial consent, the consortium being successful in the bid and compliance with all relevant regulatory and planning obligations.
