Varadkar warns there will be no State aid for ports
Published 12/05/2011 | 05:00
STATE-owned ports could come under the control of local authorities if they get into financial difficult, transport and tourism minister Leo Varadkar has warned.
Speaking yesterday at a conference hosted by Dublin Port to discuss its master development plan to 2040, the minister said his department is currently assessing whetherthe government should retain ownership of ports following the publication last month of the review of state assets led by UCD economist Colm McCarthy.
The State owns 10 ports: Dublin Port, Dun Laoghaire, Waterford, Drogheda, Dundalk, Cork, Shannon Foynes, Wicklow, New Ross and Galway.
The report on state assets noted that there are too many ports and that the sector would benefit from a rationalisation of ownership and management structures.
Mr Varadkar said his department is assessing a number of possibilities.
"The future structure of the sector requires in-depth analysis and strategic analysis at national level," according to Mr Varadkar.
"The recently published report of the McCarthy group highlighted the importance of structuring the ports in a way that maximises efficiency."
He added: "What we do have to decide over the coming weeks and months is whether it's necessary for the Government to continue to own all the 10 ports and whether the Government will continue to operate a ports monopoly, and whether the Government needs to continue to own 100pc stakes in all the ports."
A final decision would require "careful consideration and consultation".
Mr Varadkar also warned that state money wouldn't be made available to bolster ports' balance sheets.
"Where port companies are not successful, there will no bailouts and there will be no state aid.
"It just isn't possible for the Government in the situation it's in to offer that," he said.
"Where smaller ports find themselves unable to continue operations, amalgamations or transfers to local authorities will be the preferred option."
Dublin Port chief executive Eamonn O'Reilly has previously rejected any notion that the capital facility could be sold, saying that a private owner wouldn't have the same incentive to invest in it as they had been focused on generating returns.
There has been speculation the port, which recorded earnings before interest, tax, depreciation and amortisation of €32m in 2009, could be worth as much as €400m.
Mr O'Reilly wants to double the port's capacity to handle expected trade levels by 2040.
Speaking at yesterday's conference, he conceded that Dublin Port's masterplan will cause some controversy, but claimed that it had "great potential" to facilitate economic growth and to make Dublin a better city to live in.