State ports should be restructured

STATE-OWNED ports, including Rosslare, should be restructured into competing multi-port companies built around Dublin, Cork and Shannon Foynes, according to McCarthy.

His report also recommended that the privatisation of some or all of the ports should be considered, ideally after restructuring. The adequacy of competition in the sector should be reviewed prior to privatisation, and suitable regulatory arrangements instituted if deemed necessary.

The seaport sector, which is almost exclusively in state ownership, handles more than 95% of Ireland’s external trade by volume.

However it has faced difficult trading conditions since the peak of 2007/2008. The aggregate turnover of the state port companies in 2009 was €121 million, down 14% on the previous year. Dublin Port accounted for slightly more than 50% of this, with Cork accounting for 16%, Dun Laoghaire 8% and Shannon Foynes 8%.

The report said although several of the key shipping segments are expected to show a return to growth in 2010 indicating some volume return, these gains are not evenly distributed around the ports.

It said the sector will have to respond where it can to the rapidly increasing size of ships, which is driving demand for deeper navigational access to ports, longer quays and higher capacity cargo handling equipment. Maximising efficiency is the major issue for the sector.

It said there are too many ports for the trade available, and the sector would benefit from a rationalisation of ownership and management structures.

The report suggested that any of the port companies could “in principle” be disposed of.