Ports must find private funding, says minister

The Exchequer will only be the funder of last resort for State ports that need investments of hundreds of millions of euros to meet the growing demands of the economy, the Government said yesterday.

A new ports policy framework, launched by the Minister of State for the Marine, Mr Pat "The Cope" Gallagher, foresees the development of a huge shortfall in port capacity between now and 2014.

Economic expansion will mean that this shortfall could be as large as 12.2 million tonnes of freight within 10 years if capacity measures are not taken now, Mr Gallagher said.

The Government proposes that ports engage more deeply with the private sector to explore the provision of the necessary investment.

Mr Gallagher said public money would be available as a "residual" source of investment funding, and thus would only be offered after all other sources had been exhausted. Private investment in ports is already in place in many cases, although its extent varies significantly from port to port.

No amount has been set aside by the State for the purposes of upgrading ports, but the Government appreciates the need for investment, according to Mr Gallagher.

"Hopefully that may not be required. I would like to think that each commercial port would stand on its own and be financially viable," he said.

Mr Gallagher acknowledged, however, that the medium to long-term capacity constraints on ports cannot be funded through the ports' own resources.

Private sector involvement would not be expected to lead to full privatisation, with the Government keeping an "open mind" on this issue at the moment.

Ports play a crucial role in the efficient management of the Republic's economy, Mr Gallagher said.

Official statistics show that they currently carry 99 per cent by volume of the Republic's external trade.

In 2003, the value of these exports and imports was €130 billion, compared to between €7 and €10 billion for airports.

The Republic's main ports, such as Dublin, Cork, Drogheda and Waterford, were taken out of the direct control of the Department of the Marine in 1996. The latest policy document came on foot of a consultation process that began in the wake of a 2003 review.

Mr Gallagher assured stakeholders that the Government would now move quickly on addressing policy priorities in the area.

He invited commercial ports to draw up proposals on the capacity upgrades needed by their particular facilities and to consider how these improvements could be funded.

Mr Gallagher admitted that this process will inevitably see some proposals being successful at the expense of others, but he said competition would be positive.

"Priority will be given to viable programmes which address both national and regional policy requirements," he said.

Mr Gallagher suggested that ports that do not manage to secure the investment they believe to be necessary could develop as niche operators.