2.2 Report of the Review Group on State Assets and Liabilities

2. Organisational and Ownership Structure

2.1 Introduction The organisational structure of Ireland’s commercial ports sector has been largely unaltered since corporatisation on foot of the Harbours Act 1996. That process mirrored a trend across the European ports sector that was characterised by a move away from traditional organisational structures toward more flexible commercialised entities better able to respond to changing market demands.

This structure of independent competing port companies has responded reasonably well to evolving market demands. However, with the difficult challenges now facing the sector, it is timely to reconsider whether the current structure is best suited to developing the type of port services and infrastructure required for the future.

The port governance model in Ireland is broadly in line with the European norm. A recent survey by the European Sea Ports Organisation found “that the vast majority of port authorities in Europe are publicly owned” and that “the ownership situation of port authorities looks fairly stable” (Verhoeven, 2011). The United Kingdom is an exception, with many ports having been privatised in the period since 1980. However, many important UK ports remain in public ownership. In Northern Ireland, Belfast, Warrenpoint and Derry remain in public ownership. Larne is privately owned.

2.2 Report of the Review Group on State Assets and Liabilities

The Review Group on State Assets and Liabilities contained two specific recommendations in relation to the commercial ports sector (Review Group, 2011):

Since the corporatisation of the State-owned ports, ports policy in Ireland has remained laissez faire with regard to the organisation and development of the sector. The port companies are each independently tasked with developing their particular port and commercial business, subject to certain reserved Ministerial functions.

Recommendation 29:The Review Group recommends that the State-owned ports, including Rosslare, should be re-structured into several competing multi-port companies, built around Dublin, Cork and Shannon Foynes. The Competition Authority should be consulted concerning the amalgamation process.

Government has made two relatively minor interventions in the organisational structure of the sector since 1996. In 2000, Shannon Estuary Ports Company and Foynes Port Company were merged to form Shannon Foynes Port Company. In 2011, Dundalk Port Company was dissolved and its functions transferred to Dublin Port Company. Both of these interventions were reactive developments, which arose due to a port company encountering financial and corporate governance difficulties, rather than forming part of a broader ports policy development framework.

Recommendation 30:The Review Group recommends the privatisation of some or all of the ports should be considered, ideally after the recommended restructuring. The adequacy of competition in the sector on an all- Ireland basis should be reviewed prior to privatisation and suitable regulatory arrangements instituted if deemed necessary.

The report’s recommendations are attractive in their relative simplicity and clarity. However, the diversity of the Irish commercial ports sector militates against such a ‘one size fits all’ approach.