Friday 4 November 2011

Expanding while trying to please the neighbours

DUBLIN Port chief executive Eamonn O'Reilly is the first to admit that you can't please everyone. As an ambitious €500m draft masterplan for Dublin Port is formally unveiled today, residents living in nearby areas -- such as well-to-do Clontarf -- have already voiced their concerns. They have issues surrounding the potential visual and environmental impact of plans to nearly double the port's handling capacity over the next three decades.

But notwithstanding the arguments from both sides about why expansion and land reclamation at Dublin Port may or may not be necessary to fulfil future requirements, there is no escaping the fact that if the facility is to continue being the primary point of entry and exit for goods into the country, then it needs continued investment.

"Of course, we would have liked a higher level of engagement," says O'Reilly, partic- ularly in relation to the Clontarf residents.

"At the end of the day, we're all citizens, but you're not going to get perfect consensus. However, I think what people will see with the draft masterplan is that there have been some very significant changes -- or maybe a more explicit enunciation -- of policy by the board."

That more "explicit enunciation" includes an undertaking that intended land reclamation "could and should" mark the final incursion of the port into the bay area. Any need for additional capacity would, he says, require investment in alternative ports on the east coast.

It's probably safe to say that the most contentious issue will be plans to reclaim up to 40 hectares of land at the port.

A previous planning application to reclaim 21 hectares was ultimately rejected by An Bord Pleanala earlier this year, but for environmental reasons to do with the potential impact on wetland habitats for birds, rather than any objection to expansion of the port per se. That has left the door open for Dublin Port to lob in a further application -- something that O'Reilly says it will do in time.

"We didn't adequately set out the impact it would have on the environment. That's something that's addressable."

Despite the economic environment here, which has seen the level of imports shrink significantly, a slide in Dublin Port's throughput has reversed as exports rallied. Last year, nearly 29 million tonnes of goods were shipped through the port -- nearly as much as in 2008. It handles slightly over 46pc of all the country's exports.

O'Reilly and his team have based their masterplan on the assumption that the port's volumes will grow by about 2.5pc per year over the next 30 years, but accept that this could happen as soon as 15-20 years.

He also maintains that the masterplan is just that -- a plan -- and not all the elements of it might necessarily proceed over the course of its projected timeline. From a financial point of view, he says it can be done in "bite-size chunks", enabling it to be easily funded, without having to expose the company to high levels of debt.

"We've got a perverse benefit from the economic downturn," he says, explaining that when the recently rejected reclamation plan was initially put before An Bord Pleanala, it appeared likely that the extra capacity it would bring would be required by the port within five to 10 years.

That time horizon was extended as the country descended into recession. New berths built on reclaimed land would enable the port to handle a new breed of superferries that are as long as 250 metres and can carry 300 freight vehicles and 230 cars. O'Reilly says the port is conscious of optimally using its existing footprint.

"We have 260 hectares here and some of those lands are not directly under our control because they're subject to long-term leases with clients and 30 acres have oil tanks sitting on them (they won't be moved). The focus is really on using the lands that we have."

Examples of how the port intends to do this include shifting an open storage area for imported vehicles that is beside the port's head office to a 4.3-hectare site across the road, which is currently disconnected from the main port area as a result of the construction of the port tunnel. A bridge will be built across that road to link the two areas and a planning application is close to being filed by Dublin Port.

It's intended that the new site will accommodate up to 2,300 cars. That will free up space beside the head office for additional roll-on roll-off capacity. A number of other areas within the existing facility can also be in-filled to provide extra operating space, while the port wants to be more "city facing", reintegrating with the capital.

It hopes to move cruise ship berths up towards the East Link and build an interpretative centre there.

O'Reilly reckons that if the total masterplan was implemented, it would cost in the region of €400m to €500m. In the past decade, about €250m has been invested in upgrading facilities. There's currently enough capacity for container traffic for the next 10 years.

As boss of a semi-state, he is subject to a €250,000 salary cap imposed by the last government and ignored most recently by the appointment of Pat Doherty as chief executive of the ESB -- he'll receive €318,000. O'Reilly, meanwhile, receives €185,000 a year -- less than his predecessor.

"I want to be paid as much as I can get," says O'Reilly. "That's not much different from how anyone thinks.

"The Government is in a very difficult position though, when there's 400,000 people unemployed. In my last job (boss of Portroe Steverdores, owned by the Cork-based Doyle Group), I took a 20pc pay cut because I had to make people redundant."

He thinks that the right people need to be employed for the right jobs and that if the salary cap has to be breached on occasion, then it should be.

"You need to have the right number of people employed with the right skills at the market price. If that involves someone being paid more than €250,000, so be it," he adds.

"We had mad excesses of earnings in banking in particular. There was colossal incompetence and people were royally rewarded for it. There's naturally a reaction to that. Everyone gets tarred with that same brush at the level of this job."

Meanwhile, O'Reilly says he has a good relationship with Transport Minister Leo Varadkar, who has already made it clear that any of the state-owned ports that can't pay their way won't be able to avail of any state funding to bail them out.

Most recently he placed Dundalk Port under the control of Dublin Port, which then contracted out its operation to a local crane operator. For now though, the Dublin Port masterplan is a priority for O'Reilly.

But he won't be working at Dublin Port even when many initial elements of the masterplan might be implemented. He's 52 and took up his job last year. It has a seven-year tenure and he's fairly certain he'll be moving on after it.

"I'm on the eighth gig of my career," he explains. "I'm on a contract that has a tenure of no more than seven years. I will move on. My ambition is to go out with 10 gigs under my belt."

Irish Independent

No comments: