The Northern Ireland Assembly - PROCEEDINGS OF THE AD HOC COMMITTEE (PORT OF BELFAST)

The Joint Chairperson welcomed Lord Dubs and his advisers to the meeting, and he asked him to make his opening remarks in relation to the BHCs' amended proposals, as set out in their letter to him of 8 June 1999.

i. Lord Dubs first explained that the proposed changes were as a direct response to important concerns raised by the Committee at previous meetings. Essentially the proposal was to privatise the main operation of the Harbour under a new BH plc, while separating large tracts of non port-operational land (with development potential), which would come under a master lease held by a new publicly controlled body (BHDC). In this way, the new public corporation could develop land through leases, thereby maximising public benefit.

ii. The Minister impressed upon the Committee the serious implications for the present public expenditure programme in the absence of proceeds from the flotation of the Harbour. He advised that the £70m in the Chancellor's Initiative for the Strategic Road Scheme had been built into the Treasury assessment for this year's budget, and, in its absence, the proposed infrastructure improvements would go by default. Moreover, such a significant hole in the budget would mean the re-phasing of the current public expenditure programme and a delay in work due to begin this year on, for example, major school projects, housing capital schemes, the Science Park, the Leckpatrick bypass, the Antrim/Ballymena dualling and the beef marketing programme. He stressed that any delay in reaching a decision on the sale of the Port could lead to expenditure cuts for the coming year, affecting, for example, two bypasses the contracts for which are due to go out in the next two weeks.

iii. As regards the possibility of using Dover Port as a model for Belfast, Lord Dubs advised that this would require primary legislation. He also pointed out that Dover Port had no public control and that the Government cannot influence its investment decisions or touch its reserves.

iv. Several members expressed deep concern about the linkage of the sale of Belfast Port with the various public expenditure commitments. Lord Dubs acknowledged that the setting of priorities in politics inevitably meant making tough and painful decisions that were sometimes not popular; indeed, the new Assembly would have such discretion in having to make up the £70m gap in the budget were the Port not sold.

v. The Minister was reminded of his previous undertaking that any additional money raised through the sale of the Port over and above the £70m that has been promised for the roads infrastructure would be retained in the Northern Ireland block, and he was asked if this was still the case. Lord Dubs said that the Chancellor had not specified what would happen in the event of substantially more funds being raised. In that scenario it would be for the Assembly to negotiate with Treasury, but the Minister would be hopeful of a sympathetic response. Mr McCormick advised that the Treasury would look at a range of needs and its decision would depend on how it saw public expenditure being handled in Northern Ireland. The Assembly's case would be bolstered though if it had convincing arguments and a clear timetable for the proposed sale of the Port.

vi. Lord Dubs then informed the Committee of a new proposal that he was considering putting to the BHCs in an attempt to allay members' concerns about the land issue. This would, in effect, hand the new Belfast Harbour Development Corporation the freehold of the Harbour Estate, and the BH plc would be granted a long-term lease for Port operations at a competitive rate. He envisaged the BH plc retaining the rentals on existing leases, which would be needed to underpin a successful flotation. The new Development Corporation would derive income incrementally as land not currently leased, or on which the lease is due to expire in the next few years, came on stream for development. Some negotiation would be required between the two parties on revenue that would flow from land coming up for development on existing leases. Although the detail needed to be worked out, the Minister's aim would be to strike a balance in relation to income flows. Mr McMinnis undertook to write to the Committee after Lord Dubs's meeting with the BHCs to clarify the position on the proposals for the following: the BHDC's equity stake; the golden share; the ownership of the land staying in public hands; and the revenue flow for the BHDC.

vii. Lord Dubs stressed that democratic accountability would be crucial to whatever public body was set up under a change in the Port's status. He suggested that its membership could be split equally between the DoE and Belfast City Council, thereby bringing together a variety of skills.

viii. In response to some members' concerns about the fact that no valuation has been made of Belfast Port, Mr McMinnis assured the Committee that it was intended that three separate valuations be carried out in the event of the sale of the Port. One would be undertaken by the BHCs, another by the DoE and there would be an independent one based on the best commercial advice on the development potential of the land.

ix. Lord Dubs responded to concerns raised about the potential effects of the sale of Belfast Port on Northern Ireland's other Trust Ports by emphasising that there should be healthy competition based on a level playing field. He referred to the golden share as a tool to prevent aggressive price-cutting and the proposed extended powers for the other ports that would give them greater commercial freedom. He also pointed out that Warrenpoint could face greater competition in the future from the ports of Drogheda, Dundalk and Dublin than from Belfast.

The Joint Chairperson thanked Lord Dubs and his advisers for their evidence, and they left the meeting.

MR A MAGINNESS

(Joint Chairperson)
17 June 1999 / Menu / 22 June 1999