WATERFORD'S port authority has warned it could be rendered insolvent if a scheme being proposed to restructure the troubled Bell Lines container freight company is adopted unchanged.
Waterford Harbour Commissioners, whose principal customer is Bell Lines, has indicated that they are strongly opposed to the "scheme of arrangement" put to the High Court this week by the examiner appointed to Bell Lines, Mr David Hughes.
Mr John Clancy, general manager of the harbour authority, said the scheme, as presented, was viewed as unfairly prejudicial to the operators of the port.
At the next High Court hearing, on June 3rd, the commissioners will petition for amendments to the examiner's proposals, and Mr Clancy said that if this was unsuccessful they would appeal to the Supreme Court.
The rationalisation plan proposed for Bell Lines, which has trading debts in the region of £20 million, would involve more than 30 redundancies at Waterford Port and a drastically rescheduled financial arrangement with the port authority.
Bell has a 15 year agreement with the port authority, dating from September 1993, and is understood to account for more than two thirds of the harbour commissioners' income.
The development of the modern port facility at Belview has cost in the region of £25 million, and Waterford Harbour Commissioners undertook borrowings of over £10 million, mainly from the European Investment Bank.
Waterford is one of the most strategic ports in Ireland, handling between 7-8 per cent of the country's external trade, but remains heavily tied to the operations of one customer, Bell Lines.
The state of the art container port is Ireland's closest deep water, multi purpose port to mainland Europe.
Bell Lines, which has experienced trading problems on a number of fronts, went into examinership last February to "facilitate the orderly, restructuring of the company'. A freight price war on the North Sea, along with lower volumes and rates as a result of the pricing policy of the Channel tunnel, reversed the fortunes of Bell Lines. It also incurred some £4 million costs when a storm damaged two strategic cranes at Waterford and reduced its operational capacity.
Up to the 1960s Waterford handled mainly bulk traffic, but when the container revolution started Bell developed rapidly and became the dominant port user.
The port authority has been in the process of finalising a strategic marketing plan and has reported substantial interest from a number of other potential users.
Irish Continental Group (ICG) has a 25 per cent stake in Bell Lines, with further options, and has been in consultation with the examiner on the restructuring plan. ICG and the other shareholders, principally two venture capital funds, were expected to inject between £3 million and £5 million in new equity if they are in agreement with the restructuring arrangements.
With speculation mounting that ICG is set to purchase Bell Lines if the High Court endorses the examiner's report, political and trade union representatives in Waterford have called on the Government to hold a public inquiry into why the company was placed in examinership.
