A recent Government consultancy review of State ports shows an "inherent ideological bias" in advising against privatisation, according to business lobby IBEC.
The consultants, who carried out the High Level Review of Ports for the Minister for the Marine, based this approach on the "unfounded assertion that private ownership is inconsistent with the public interest", IBEC says. The confederation urges setting up a privatisation programme, initially focusing on the major strategic ports of Dublin, Cork, Shannon-Foynes and Rosslare, and this should be completed in three to five years.
The ports review was conducted by Raymond Burke Consultancy, Posford Haskoning Consulting Engineers and Farrell Grant Sparks Corporate Finance for the Minister for the Marine in partnership with the Irish Ports Association. It was published by the Minister, Mr Ahern, last May, with a separate Port Estates Task Force report, which recommended transferring ownership of non-trading ports to local authorities.
In a separate press release, M Ahern said he intended to initiate a "full public consultation" on the findings of both studies, and issued his own seven-page "consultation foreword" in which he outlined his own views, including his preference for privatisation.
The Minister noted that the current ownership of ports was "deeply embedded" in the State sector, with 10 harbour authorities having been incorporated as State port companies with strict commercial mandates since March 1997.
In his statement, Mr Ahern added: "Clearly the revenue which could accrue to the State from the sale of port assets could be attractive and, if carefully managed, could result in more competitive port infrastructure and services."
On the review's proposed merger of some ports, the Minister remains to be convinced of the amalgamation of port companies in all cases, but would be prepared to examine the situation on a port-by-port basis.
The Minister said "dormant" ports which were no longer commercial should be allowed to opt out of the function as a trading port. He was interested in examining the potential for public-private partnerships or private development of smaller, non-trading ports, where such ventures could "enhance facilities or amenity values, while at the same time safeguarding traditional rights of public access".
In its submission on the high level review, IBEC rejects as "over-cautious" the consultant's recommended "do minimum" strategy which makes public private partnerships (PPPs) a priority to support investment in the sector. "IBEC holds the view that PPPs have a legitimate role to play as part of the sector's investment strategy. However, in the absence of other reforms, the PPP process alone will not result in the structural changes, which are necessary to create dynamic competitive entities, and to provide world class levels of service," the confederation says.
IBEC is also concerned that the port companies "lack the resources and expertise required to implement a major programme of development through PPPs", and says the consultants ignore this - a major weakness in their proposed strategy.
Before initiating a privatisation programme, the Minister should implement regional mergers to overcome fragmentation and promote competition, IBEC says. It proposes creating dynamic, competing "regional clusters which are focused around the key strategic ports of Dublin, Rosslare, Cork and Shannon-Foynes.
It also rejects the option - accepted by Mr Ahern - of appointing a regulator to the ports sector and proposes instead a competition audit of port companies. This audit should involve a "rigorous benchmarking of the productivity performance of each of the principal ports". The benchmarking should be extended so comparisons can be made against ports in Northern Ireland and Britain; and it should taken into account the State aid, provided directly or indirectly, and disto'rtions due to "work practices" in the respective ports.
Mr Reg McCabe, IBEC's transport director, says it is "incumbent on the Minister to address as a matter of urgency the many shortcomings in this key report", and calls for implementation of IBEC's own "action agenda".
