Thursday 29 September 2016

Dublin Port on song for record growth cycle

One of our most successful State companies is turning to soft values and a 'song cycle' to help it navigate record growth, writes Group Business Editor Dearbhail McDonald

Published 19/06/2016 | 02:30

Where the murky arteries of Dublin City meet the Irish Sea — a view from the air of Dublin Port, Ringsend and Irishtown, while out to the north are Bull Island and Howth Head. Top right, Eamonn O’Reilly, the chief executive officer at Dublin Port. Portrait: Kyran O’Brien
Where the murky arteries of Dublin City meet the Irish Sea — a view from the air of Dublin Port, Ringsend and Irishtown, while out to the north are Bull Island and Howth Head. Top right, Eamonn O’Reilly, the chief executive officer at Dublin Port. Portrait: Kyran O’Brien
Eamonn O’Reilly, the chief executive officer at Dublin Port. Portrait: Kyran O’Brien

Any chief executive whose company has posted a 17.3pc increase in volumes between 2013 and 2015 won't be too shy about sharing their figures with you.

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When the company is wholly-owned by the State, receives no exchequer funding and handed just shy of €20m back into the State's coffers last year - through dividends, corporation tax and commercial rates - you can appreciate why that same chief executive is feeling somewhat buoyant.

But Eamonn O'Reilly, CEO of the Dublin Port Company (DPC), doesn't want you to see the exponential growth of Dublin Port, on course for another record year in 2016, on the page.

He wants you to see it for yourself.

Which is how I ended up on at 5am, with a hard hat and life jacket, on a ramp metres away from the water's edge waiting on the arrival of Stena's Adventurer, Irish Ferries' majestic Ulysses as well as a P&O and a Seatruck vessel as they sail into the Liffey.

The scale and sheer size of the 'ro-ro' (roll-on, roll-off) and 'lo-lo' (lift-on, lift-off) ferries is one thing. But to see 13,000 lane metres worth of trucks, cargo, cars and campervans unfurl with military precision in less than an hour is something else and gives a dramatic insight into the role the port plays in the wider trade and tourism economy.

Almost half of the cargo and freight, including dispatches from major retailers such as Marks & Spencer, go directly through the Port Tunnel and onwards to towns and cities across the country.

Others are city-bound, while a proportion remain on the 260 hectare site, home to a 4.3 hectare, €3.4m car terminal - which can deal with some 2,500 cars - for further handling.

Dublin Port handles some 20 ships a day, recording an almost 8pc growth in the first five months of this year alone and declared an interim €10.9m dividend for 2016.

The port contains four ro-ro ferry terminals, three container terminals; three oil importation terminals and a host of other facilities for handling commodities as diverse as lead, zinc ore, scrap metal and animal feed.

Private handling companies, employing some 4,000 staff, have invested more than €80m in cranes and other handling equipment in recent years.

Yet despite its strategic importance as Ireland's principal and largest commercial port - it is also a designated node and core port located in the North Sea-Mediterranean Core Network Corridor - the port remains a mystery to most.

Relations between the citizenry and the port, which is just about to undergo the single largest infrastructural investment project in more than 300 years - with the €230m redevelopment of the Alexandra Basin - have undergone periodic strain.

The march of mechanisation and modernisation annihilated in all but name the traditional role of the docker: at its height, the Dublin Port and Docks Board employed more than 700 people, handling around 6m tonnes of trade a year.

Today, the DPC employs just 150 people and handled a record 32.8m gross tonnes last year.

The State company's sole responsibility is infrastructure and no longer carries out warehousing, stevedoring and commercial cargo activities. Those tasks now fall to a variety of private companies who fight tooth and nail for hauliers' business.

For O'Reilly, a third generation engineer who has been the chief executive of the DPC since August 2010, the biggest challenge is growth.

"The port is growing at a fast rate," says the Dubliner, a married father of four and keen Dublin Bay swimmer who spent the early years of his career overseas in Egypt, Saudi and the Congo.

"It has gone up 17pc in three years and that's no more than a return to what has been the trend in the port.

"From 1950 to 1980 the volume in the port grew by tenfold. As the economy improves, there will be growth in port volumes, as night follows day. So, the biggest challenge we have is to get more through the same footprint of port land".

Few people are as well placed as O'Reilly to understand the challenges, infrastructural, environmental and social, that are facing the ever-expanding port.

O'Reilly joined the DPC from Portroe Stevedores Limited where he served as Chief Executive and also served as Group Business Development Manager of Doyle Shipping Group, Portroe's parent company.

A management consultant who worked as a business development manager for Securicor before joining Doyle Shipping Group in 2005, he also served as chief executive of the nearby Marine Terminals Limited - also in Dublin port - between 1992 and 1996.

O'Reilly witnessed first hand the turmoil of the divisive dockers' dispute in 2009 and he steered Portroe through choppy waters when the economy hit a cliff in 2008, leading to a near collapse in global freight trade.

The reason why growth poses such a challenge is the limited capacity of the DPC to extend its footprint due to space constraints.

Dublin Port is currently growing at a rate that could see volumes double by 2026 and O'Reilly is planning on an average annual growth rate of 3.3pc over the 30 years between 2010 and 2040.

But footprint is key and the port has already lost a 30-year battle to increase its size after it tried and failed between 1979 to 2010 to increase capacity in Dublin Bay.

Dublin Port wanted a 21 hectares infill and dredging to build deep water facilities, but was refused permission by An Bord Pleanala, in part due to concerns about the effect of the extension on an area of special protection under the birds directive.

The project also encountered fierce opposition from many local bay residents.

In contrast, the Alexandra Basin project, which will mean larger ships such as the giant cruise ship Disney Magic, practically sailed through planning and is now underway.

The project, part funded with a 20-year €100m loan from the European Investment Bank, involves rebuilding more than 40pc of the berths in the port and increasing the basin's depth from 6.5m to 10m.

In addition, a 10km channel, stretching from the East Link Bridge to the Dublin Bay Buoy (5km offshore), will be deepened, allowing cruise ship passengers to travel by Luas or foot to the city centre.

One lesson O'Reilly gleaned from the infill controversy was the need to engage and educate the port's neighbours and its critics.

"You've got to do the hard yards on the environmental side, whether it's industrial archaeology, the impact of noise from construction works, you've got do to all that stuff," he says as we sail out of the basin and past Dublin's landmark Poolbeg stacks.

"If people don't trust that what you are doing is not environmentally damaging, you become the enemy".

O'Reilly laughs when I ask if the beloved Poolbeg Stacks, now long past their design life, should be demolished.

"I think they are a great example of the challenges of planning," says O'Reilly who thinks that the stacks are "sacrificable".

"Development and expansion are words which cause difficulty, but I think people will have a lot more difficulty if we don't have the development or the expansion that is needed to give them and their children jobs.

"We all like comfortable lives and want things to be nice. We don't want power stations, waste-to-energy plants or ports, but we need them".

Despite the great infill setback, O'Reilly has a great faith in An Bord Pleanala and the Environmental Protection Agency and says we need to trust these institutions.

"They may come up with a decision that you want or a decision that you don't want, but they have to make the right decision," he says. "We don't set out on projects we do to damage or destroy the environment that we ourselves live in".

As well as capacity and land, O'Reilly says his greatest challenge is to rebuild the link between the port and the city, a once-strong link has weakened over decades.

That's why the DPC's board has adopted a "soft values" strategy, one pioneered by Antwerp marine lawyer Eric Van Hooydonk as a way for ports to communicate with key stakeholders.

The strategy involves projects such as the €500,000 restoration of the 140-year-old Diving Bell, now a quayside tourist and maritime history attraction.

The latest part of the strategy is Starboard Home, a €230,000 business commission by the DPC of a 'song cycle' on the river and port featuring some of Ireland's best-known artists including Paul Noonan, Gemma Hayes, Colm Mac Con Iomaire and Lisa O'Neill.

Produced by the National Concert Hall as part of the Ireland 2016 Centenary Programme, the new works will premiere on Wednesday at the NCH.

O'Reilly insists the unprecedented song cycle and other soft values initiatives in train are no substitute for the hard yards needed to grow port volumes whilst bringing the city - and critics - along with him.

He believes that by utilising existing lands and other options, the port has enough capacity until 2040. However, plans to address the housing crisis by building 10,000 homes on the Poolbeg Peninsula could set the port on a collision course with Dublin City Council.

Despite the construction of a €600m, 600,000-tonne capacity waste incinerator and the presence of a nearby sewage plant, the council has identified the peninsula as a strategic development and regeneration area.

But DPC, which wants 18 hectares of its lands excluded, warned that it may have to revisit its infill plan if its essential expansion needs are curbed by the new urban quarter.

All the soft values in the world may need to be deployed to navigate any future infill plan.

For now, though, O'Reilly is on song.

"I know a lot of the stuff we are planning today won't be built in my time or even in my lifetime," he says. "But there's great satisfaction knowing some will come to fruition and you helped lay the foundation works".

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