PROCEEDINGS OF THE AD HOC COMMITTEE (PORT OF BELFAST)

WEDNESDAY 16 JUNE 1999 AT 10.15 AM

IN ROOM 135, PARLIAMENT BUILDINGS

Mr A Maginness(Joint Chairperson)

Mr R Beggs

Mr P Bradley

Mr J Byrne

Mr F Cobain

Mr D McClarty

Mr M McGimpsey

Ms J Morrice

Mr M Morrow

Mr P Roche

Mr J Tierney

In attendance:Mr G MartinMrs D Williams

Mr D HarkinMs V SurplusMrs K Ferran Apologies:Mr S NeesonMr Billy HutchinsonMr S Wilson

Assembly Member Maginness took the Chair.

1.Minutes of the Previous Meeting

The minutes of the previous meeting were agreed

2.Matters Arising

i. The Belfast Harbour Commissioners have forwarded a copy of the Arthur Anderson report and a paper giving a breakdown of the usage of Port-related land, which the Clerk has copied to Committee members.

ii. The Clerk has also copied the Department of Finance and Personnel's response to the Committee's request for information on the borrowing powers of the Ports of Belfast, Dover and Dublin and their relationships with their respective PSBRs.

3.Oral evidence: Belfast Harbour Commissioners

Representatives:
Mr F Cushnahan (Chairman)
Mr G Irwin (Chief Executive)
Ms A McLaughlin (Commissioner)

The Joint Chairperson welcomed the Belfast Harbour Commissioners to the private session and asked them first to give a resume of the position in relation to Belfast Harbour's land and then speak to their letter of June 8 to Lord Dubs, which outlined a proposed amendment to their preferred option.

Mr Irwin gave detailed separate breakdowns of the Harbour's land held on the Counties Antrim and Down sides. He pointed out that the land currently leased to Shorts' and Harland and Wolff was long-term (125 years), with the exception of 75 acres in Abercorn Basin, the lease on which is due to expire in 2019.

He then outlined the BHCs' proposal for the creation of a new public sector body under the PPP option, which would take over the existing leases of Shorts' (excepting the Belfast City Airport terminal) and Harland and Wolff through the granting of an overriding long-term master lease. The purpose of the proposal was to provide public sector control of the relationships with the principal lessees in the development of the land, together with vesting powers where land was being left undeveloped. It was by way of a reaction to many concerns expressed about, for example, the present planning process and was intended to support wider public sector involvement in decision-making.

In such a scenario the BHC plc would seek the right to have one director on the new public body and to continue to receive its present rentals and a share (unspecified) of any future gains derived from a change in the land's usage. For example, Harland & Wolff's current minimal rental charge applies only insofar as the leased land is used for shipbuilding. However, the development of land for anything other than core activities would necessitate re-negotiating the lease with the public body, and this would inevitably involve new charges at commercial rates, the benefits of which would be shared by the new public body and the BHC plc.

Mr Irwin advised that the exclusion of the new City Airport development (of some 60 acres) was because the value of the licence fee, currently £400,000, was to be built into the sale price of Belfast Port on flotation day. The runway is not included in the development, and, in the event of the airport ceasing to operate, that land would revert to the new public body.

Ms McLaughlin explained that the reason the proposal did not include all the land was that, if the Port were to float, the BHCs felt it would need income from the rest of the land to give it sufficient financial strength. These revenue streams were seen as essential for the sustainability of the business and, for example, the financing of infrastructure improvements. The BHCs acknowledge that the Port could be sold without the land but opined that it could not be successfully floated in that scenario.

The BHCs want to develop the Port as an integrated business - involving transport, storage and distribution - and to this end are currently reclaiming 50 acres on the County Antrim side that will help to meet the ever-increasing (warehousing) unit load demands.

Mr Irwin will provide the Committee with a valuation of the Port's assets based on the BHC's latest profit and loss account. He confirmed that the current rental income from non-port land was £1.2m and £400,000 from the airport licence. There are 50 acres on the County Down side available for lease, which are being currently marketed.

The Joint Chairperson thanked the BHCs for their evidence, and they left the meeting.

MR A MAGINNESS