Harbours Bill 2015 Seanad Second Stage Speech

8th December, 2015

I am pleased to introduce to the House the Harbours Bill 2015.


This Bill builds upon the recommendations of National Ports Policy which was published in 2013. The primary purpose of the Bill is to provide the necessary legal basis to allow for the later transfer by Ministerial order of the five designated Ports of Regional Significance to local authority led governance structures.


Every Senator is aware that as an island Nation our ports are critical to our ability to trade with the rest of the world. However, equally I know that every Senator will also be aware of the social and cultural importance of our ports. Indeed many of our oldest cities and towns owe their very existence to their role as a port.




These varied stories of our ports’ development are mirrored in the diversity found today within our modern commercial port network.


We currently have nine State commercial port companies operating under the Harbours Act 1996 – Cork, Dublin, Dún Laoghaire, Drogheda, Galway, New Ross, Shannon Foynes, Waterford and Wicklow.

We also have Rosslare Europort which for historical reasons is a business unit of Iarnród Éireann and not subject to the Harbours Acts. In addition of course there is one fully privately owned port in Greenore and there are various other local authority controlled ports, and indeed fishery harbour centres, which handle commercial freight.


To give an example of this diversity,  last year Dublin Port handled 21 million tonnes, 7,000 vessels and generated a turnover of €72million while at the other end of the scale Wicklow Port handled 94,000 tonnes, 56 vessels and generated a turnover of €250,000. Clearly different ports perform different functions and service different markets.


National Ports Policy recognised these differences through providing a clear outline of Government’s strategy for the sector by categorising the sector into three tiers.


The Ports of National Significance – Tier 1 – are Dublin, Cork and Shannon Foynes. Collectively these three ports handle over 80% of all tonnage handled in Irish ports in any given year.


All three ports have development masterplans and earlier this year I launched the first phase of Shannon Foynes €50m Quayside Improvement Project, while both Cork and Dublin received planning permission this year from An Bord Pleanála in respect of their projects in Ringaskiddy and the Alexandra Basin.



The total outlay on all three projects is over €350million and all will be delivered without any Exchequer contribution. All of these projects have qualified for EU funding through the TEN-T programme and its related CEF funding stream.


The Ports of National Significance – Tier 2- are Rosslare and Waterford. These ports together currently handle about 7% of total tonnage. Importantly both ports offer competition to the bigger ports in the economically significant unitised trades – LoLo and RoRo – while both are well positioned in terms of their ability to service direct routes to Europe and both are well connected to rail and road networks.  While both ports suffered tonnage losses during the recession there is no doubt as to their potential in ensuring healthy competition within those important unitised trades. I am happy to inform Senators that both ports are now recovering tonnage lost in recent years.




The Ports of Regional Significance are – Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow.


These are the ports which are central to this Bill.


Collectively these five ports handle approximately 4.5% of total tonnage, which represents a decrease of over 30% in their collective market share when compared to 2000.


Within these five ports there very different stories with some quite dramatic decreases in tonnage in Dún Laoghaire, New Ross and Wicklow while both Galway and Drogheda are performing reasonably well in terms of tonnage handled albeit at a lower level than in years gone by.


Obviously Government recognises that there are those with particular interests who may question the need to make any change to the status quo. Indeed some of these local interests made their voices heard during debates in the other House.


However, at a national, strategic level Government must be clear about which ports are fundamentally significant for our national competitiveness and which are regionally significant.


Notwithstanding some of the contributions made during the Bill’s progress through the other House, I think the approach adopted by Government is broadly accepted as common sense. Indeed the Joint Oireachtas Committee on Transport in its pre-legislative scrutiny report stated that the ‘overall purpose of the Bill was broadly supported by the Committee’.


In respect of the Ports of Regional Significance, National Ports Policy explicitly recognises that these five ports continue to play an important role for their regional hinterland. This is statement is itself an important policy support for those ports.


However, this role is not one that requires central Government oversight. In line with Government’s reforms in local government, the oversight of these regionally significant ports should be devolved to the most appropriate level of Government – the local authority.


This devolution of responsibility will allow these ports develop as required by their regional economy and in tandem with their regional community. The change in perspective will enrich and enhance their future development and better aligns the needs of the local authority, the regional economy and the port itself.


Senators will note that the Bill is flexible enough to allow for either the continuation of the existing company and a transfer of the Ministerial shareholding over to the local authority or else it allows for a dissolution of the existing company and a physical transfer of all assets, liabilities and employees into the local authority.


This flexibility in primary legislation is entirely appropriate I believe.


I have been clear throughout the debates on this Bill that for some of these ports the requirement that a separate statutory company oversee and manage the port may no longer be appropriate. Equally, for other ports the continuation of the corporate model is the ‘best fit’.


My Department has made funding available to local authorities for due diligence in respect of all five companies. The results will inform the model of transfer ultimately chosen for each particular port.



I will turn now to the key provisions of the Bill which are found in Parts 2, 3 and 5 of the Bill.


Part 2


Part 2 of the Bill deals with the first of the two possible transfer methods – a transfer of shareholding in the existing company.


Section 8 provides the power to transfer the shareholding in a port company. Any order under this section will be made by the Minister for Transport, Tourism and Sport with the consent of the Minister for Public Expenditure and Reform, as the other current shareholder, and the Minister for the Environment, Community and Local Government.


Section 9 provides a potentially interesting new dynamic to our commercial ports sector. It allows for the local authority chief executive, subject to the consent of the elected members of the council and the Minister for Transport, Tourism and Sport, to consider a divestment of shares in a transferred port company to the private sector.


The section ensures continued public ownership of the port through limiting any such disposal to 49% only of the shares in the company. This represents a new potential method of funding for future development in these transferred port companies ; one that is not currently a feature of the sector.


Section 10 provides for a general Ministerial power of direction to the transferred port companies in respect of National Ports Policy. The section requires the Minister for Transport, Tourism and Sport consult with both the Minister for the Environment, Community and Local Government and the chief executive of the local authority prior to issuing any such direction.


This requirement for consultation addresses a concern the Joint Oireachtas Committee identified with regard to its potential unilateral use and possible interference in company operations.


The section explicitly restricts its use to general policy issues only and cannot be used to direct a company to act in a particular manner in a particular instance.


Sections 11 to 27 lay out the administration of these transferred companies under the new local authority shareholding arrangements. It is important to note that the Harbours Acts will continue to apply to any company which transfers under this transfer of shareholding model.


As the Harbours Acts contain a number of explicit provisions relating to the Ministerial shareholding these sections require amendment to reflect the fact that the shareholding has transferred. The exercise of these shareholder functions will primarily be one for the chief executive but the Bill also provides for a number of important oversight functions for the elected members also.


So section 11 lists seventeen sections of the Harbours Acts which will no longer apply to a transferred company. These sections are those that require an active role for the shareholder in consenting to something.


Obviously as the shareholding has changed these particular sections can no longer apply and amended versions of these sections are instead included within sections 13 to 27 of this Bill.


Many of these sections are routine in nature such as section 14 which requires any change to a transferred company’s memorandum and articles of association be approved by the local authority chief executive.


So I will today instead focus on a number of the more substantive sections and also on the role of elected members generally in the oversight of these transferred companies.


Where the transfer of shareholding model is chosen as the transfer method, the company structure remains in place, as it exists today. An important consideration in the model is to ensure the appropriate balance between the commercial freedom of the company and democratic oversight.


The Bill achieves that balance through providing for a number of specific oversight functions for elected members of a council. First and foremost there is section 23 which requires the chairperson and CEO of a transferred company to appear before the elected council if invited and give account for the administration of that company.


Secondly there is the provision within section 22 which states that any proposed Chairperson of a transferred company shall appear before the elected members prior to their formal appointment.


This mirrors the current practice of prospective chairpersons appearing before the JOC. A practice which this Government introduced and which has proven its worth in allowing elected representatives question prospective chairpersons on their vision and ambition for the company.


Section 19 requires the annual audited accounts of the transferred company accompanied by a report on the year to be laid before the elected members. While ultimately a matter for the relevant local authority, there is to my mind an obvious link between the submission of these accounts and the power of elected members to require a chairperson and CEO appear before the council under section 23.


And I have already mentioned that the consent of the elected council will also be required where any disposal of shares in the transferred company to the private sector is envisaged.


In terms of board appointments to these transferred companies, I am very clear that the improvements to the board appointment process generally must apply to any transferred company also.


Therefore section 22 of the Bill mirrors the improvements introduced in section 39 of the Bill to those companies remaining under Ministerial shareholding. Directors will be selected through the State Board appointment process launched last February.


The Bill itself requires that certain skillsets must be present on the board, including maritime transport, financial, legal and commercial.


The Bill also indicates a further set of skillsets which might be considered for board level representation, such as infrastructure planning or environmental management.


The local authority chief executive will formally appoint the persons recommended by the Public Appointments Service. The maximum length of total service of any director will 10 years which will allow for both the development of board level experience and also provide fresh thinking which is a necessary feature of any board.


The central oversight of the Department of Public Expenditure and Reform as regards board fees will continue.


The CEO of a transferred company will, as today, be appointed by the board of the particular company after consultation with the local authority chief executive. The central oversight of the Department of Public Expenditure and Reform as regards terms and conditions of CEOs will be maintained.


Part 3


These are the key issues addressed in Part 2 of the Bill; however, the Bill also provides for a second transfer method within Part 3. This model is called ‘transfer and dissolution of companies’ as outlined in sections 28 to 33.


These sections are based on existing precedents generally and provide for the dissolution of the company as body corporate and its complete integration within normal local authority structures. The port would be administered as a functional area of the local authority.


All employees would transfer, as would all property, assets and liabilities of the company. The Bill provides for the continuation of any harbour and pilotage limits.


Part 5


Part 5 of the Bill, sections 37 to section 49, comprises technical amendments to the existing Harbours Acts which are being made on foot of submissions made during consultations or on foot of experience gained in the years since the last amendments.


Three important elements to this Part of the Bill further improve the overall corporate governance culture within the ports sector.


Section 39 amends the board appointment process through introducing mandatory skillsets and introducing overall term limits of 10 years.


Section 40 introduces a new statutory provision regarding the accountability of a chairperson and CEO of a port company to elected representatives. The section requires that the chairperson and CEO appear before JOC if invited to do so and give account for the administration of the port company.


Section 42 extends the current prohibition on TDs, MEPs and Senators serving on the boards of port companies to include councillors. This will apply equally to those companies whose shareholding remains with the Minister and those whose shareholding transfers to a local authority shareholding model.


National Ports Policy is clear that the boards of port companies must be comprised of individuals with the necessary skills required of any commercial company. The Bill is legislating for that very fact in sections 22 and 39.


We’ve had instances in the past whereby councillors serving on port company boards have had to absent themselves from discussions at board meetings and also absent themselves from council discussions on topics due to potential conflicts of interests. When people elect their local representative they obviously do not want to see his or her contribution to local democracy restricted in such a manner.




As Senators can see, this Bill is an important step in the development of the Irish commercial ports sector and also represents an important contribution toward the further devolution of responsibility from central to local government.


I belive that the changes introduced will enhance the ports’ role as centres of their regional economy, deepen the economic development role envisaged for our local authorities and improve the corporate governance and democratic accountability of the sector overall.


Our ports sector is critical to our Nation and to our economy. As an island Nation we need to ensure that our ports sector is positioned to deliver cost-effective and efficient services irrespective of whether their significance is national or regional.


The amendments this Bill proposes in relation to board structures will enhance the corporate performance of our ports and ensure that they continue to fulfil their vitally important role as facilitators of our economy.


I look forward to hearing the views of Senators on this important Bill. I hope the objectives of the Bill will enjoy the support of the House just as it enjoyed the broad support of the Dáil and indeed the Joint Oireachtas Committee on Transport during their pre-leisaltive scrutiny.


I commend this Bill to the House.