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Tuesday 16 July 2019

State-owned Dublin Port pays €7m for garden at HQ and €205k for ferry launch song

Executives at Dublin Port used cards to pay for flights, hotels, entertainment and other expenses last year, writes Fearghal O'Connor

Dublin Port. Photo by Artur Widak/NurPhoto via Getty Images
Dublin Port. Photo by Artur Widak/NurPhoto via Getty Images

Fearghal O'Connor

Dublin Port chief executive Eamonn O'Reilly spent almost €95,000 on his credit card on flights, hotels and other expenses in 2018, the Sunday Independent has learned.

O'Reilly's expenses included a €5,500 airfare for Dublin Mayor Nial Ring to fly to Chicago.

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Four executives at the port company - including Mr O'Reilly - spent close to €270,000 between them in 2018 on their company credit cards on everything from iTunes subscriptions and dishwasher repairs to regular foreign travel and business and staff entertainment.

The Sunday Independent can also reveal that the State-owned company spent more than €200,000 commissioning a song from musician Philip King for the launch of the Luxembourg owned "Brexit Buster" ferry the MV Celine.

The semi-State company which runs the country's biggest shipping port on behalf of the State also spent just under €7m on a garden for its HQ on Dublin's East Wall Road.

Mr O'Reilly - who has a pay and pension package worth €359,000 - spent a total of more than €90,000 in expenses on his credit card during 2018, much of it on foreign travel for himself and his management team.

Dublin Port Company confirmed that in 2018, there were 22 credit cards in issue among its 160 staff.

"The total spend on credit cards in 2018 was €522,000 or 1.2pc of a total operating cost base of €43.6m," the company said as part of a response to detailed questions from the Sunday Independent.

Close to €270,000 of those credit card expenses were spent by chief executive Mr O'Reilly and three of his senior managers.

The company's communications manager, Charlie Murphy, used his port credit card to spend more than €30,000 in a variety of Dublin pubs and restaurants such as The Long Hall, The Stag's Head and Matt the Thresher. Throughout the year Mr Murphy regularly spent substantial amounts - hundreds or even thousands of euro at a time - on the Cill Airne, the former Guinness ship that is now a popular docklands venue on the River Liffey.

Contacted with a series of detailed questions, Dublin Port Company said that its "internal auditor reviews expenditure including on credit cards and reports directly to the Audit and Risk Committee of the board. No concerns have been raised about any expenditure."

The Port Company also said in its response that "credit cards are used as an administratively efficient means of payment with strong audit control."

"Normal business purchases by credit card include flights, accommodation, corporate hospitality, company advertising, cruise marketing, staff Bike to Work scheme and Rail Saver tickets, motor tax and IT," it said.

Staff Bike to Work scheme and Rail Saver tickets accounted for about €13,000 of the quarter of a million euro of spending on the four most heavily used credit cards, with the vast majority of expenses itemised as "Travel - Fares and Hotel" or "Business Entertainment".

Operational managers at the port made regular trips using low-cost Ryanair, Aer Lingus and Flybe flights to other major port destinations such as Zeebrugge, Dover, Southampton and Liverpool. But the company confirmed that while its policy was to use economy for short haul travel, it used business class travel on long haul flights.

Regular trips abroad for a small number of Mr O'Reilly's key communications, community relations and human resources managers saw Dublin Port represented in far flung destinations during 2018 including Chicago, Quebec, Boston, San Francisco, Los Angeles, Venice, Helsinki, Romania, Genoa, Barcelona, Geneva and St Petersburg.

In December 2017 the company's communications manager bought a €3,000 annual Dublin Airport Gold card which gives the bearer access to unlimited executive parking, access to Dublin Airport's Platinum VIP terminal and private check-in facilities and suites, fast track through security and a limousine service to the aircraft.

Mr O'Reilly, by contrast, paid just €200 for a lower level Dublin Airport Red card which only allows fast-track security.

In September 2018, Mr O'Reilly spent €7,500 on Aer Lingus and United Airlines tickets to fly to San Francisco and Los Angeles to join a party of fellow port executives from around Europe led by the EU commissioner for transport.

"Overseas travel enables Dublin Port Company, amongst other factors, to learn best practice from international peers on a range of business issues, including seeing up close how other ports operate and manage similar capacity constraints," said the company in response to queries. "There are no other ports in Ireland of a comparative nature in this regard."

On another trip last September, the port sent Charlie Murphy and Lord Mayor Nial Ring to Chicago, where they partook in a special night-time river cruise through the city along with former Taoiseach Enda Kenny and former Chicago Mayor Rahm Emanuel. Mr Ring, who did not return a call from this newspaper, attended in his role as "honorary admiral" of Dublin Port.

The €5,500 business class airfare for the event, a fundraiser which raised €80,000 for Scoil Ui Chonaill GAA club in north Dublin, was paid for by Mr O'Reilly, with Mr Murphy picking up the tab for a €1,600 stay in the boutique Kimpton Hotel Palomar.

Other entertainment on the trip paid for by credit card included trips to Chicago Cut Steakhouse, Harry Carays Tavern, the Snickers Bar Grill and a €33 bike ride on Chicago's famous Navy Pier.

The Ireland Network Chicago, which organised the river cruise, described it as a not-to-be-missed social event: "I stood aside former Irish Taoiseach Enda Kenny, Lord Mayor of Dublin Nial Ring and the cream of Irish-American business members aboard the famous Ft Dearborn boat, cruising down the iconic Chicago River, as the city's warm September breeze provides the perfect temperament for invigorating conversation and sceals with side-splitting laughs. We ate and drank to the backdrop of the passing Chicago skyline long into an evening to remember," the network said on its website.

In June, four port managers, including the CEO and communications manager, spent €2,671 apiece to travel with Air Canada to an International Association of Ports Cities conference in Quebec City. Conference tickets cost €925 and rooms at the Fairmont Hotel - advertised as the best luxury hotel in Old Quebec City - cost over €1,100 apiece.

A week after returning from that conference, another airline booking to Canada - this time with Aer Lingus - was bought by Mr O'Reilly for €6,100.

Not all offsite gatherings happened abroad. On the last Friday in June 2018, the company made a €3,100 credit card payment for an offsite board meeting at the Wineport Lodge - on the shores of Lough Ree in Co Westmeath. The previous night the communications manager had paid more than €588 for staff entertainment onboard the Cill Airne boat bar on the River Liffey. That Sunday there was more staff entertainment - for port security - on the Cill Airne, costing €1,443.90.

Other spending items on Dublin Port Company managers' credit cards included €8,625 to John Cassidy Travel, €1,666.20 to Halpenny Golf and €25.08 to Amazon for a replacement coffee pot.

At the port in April 2018, Taoiseach Leo Varadkar was invited to help celebrate the christening of the MV Celine, a new cargo ship owned by Luxembourg shipping company CLDN that now carries trucks between Ireland and the continent, by-passing Britain.

"The formal ceremony is a long-held tradition intended to bring good fortune to the ship and involves breaking a Champagne bottle against the hull as the ship is christened," Dublin Port said at the time in a statement, adding that it had commissioned "new Irish music", performed for the invited audience by John Sheahan of the Dubliners, Lisa Hannigan, and Colm Mac Con Iomaire of The Frames.

The port paid Philip King's company South Wind Blows a total of €205k, excluding VAT, for the commissioning, staging and performance of the piece of music, called Celine, at the event. Catering for the assembled politicians, dignitaries and Luxembourg shipping executives at the event cost a further €20,000.

Throughout 2017 and 2018 the Port Company was at the eye of the Brexit storm with predictions that a no-deal scenario could lead to huge congestion problems at Dublin and other ports. The company made plans to invest €1bn in port infrastructure over the next decade, a crucial investment for the Irish economy.

But port management were also engaged by another project: the creation of a maritime garden at its head office to "significantly soften and enliven the Port's boundaries with the city".

The project to build a garden at Port headquarters included new pedestrian entry points to the headquarters, dramatic new steel entrance gates, a refurbished podium, new sculptures, a maritime garden and seating, a new footbridge and relocated car parking facilities to the rear of the site and the installation of a refurbished crane from the 1960s to act as a new landmark.

Each month in 2017 the company paid out as much as €700k to construction firm Wills Bros, as well as to landscapers and electricians to create the garden. By the time the port company had paid two final bills of €500k and €335k in late 2018, the garden had cost €6.97m.

The Dublin Port Company declined to answer a question from this newspaper as to how much of a cost overrun there was on the garden project.

"The capital expenditure on the project of €6.97m was fully reported to the board and approved," it said.

Figures seen by this newspaper suggest that the overall "Soft Values" project - run by the company's Port Heritage & Communications department - was over budget by more than €500,000 in 2018 alone. The same department was also almost €80k over its €10k travel budget and €26k over its €40k business entertainment budget.

By contrast the department had underspent by more than €700k on its budget for two key masterplans to expand and improve the capacity for ships and trucks at the country's key port, according to the figures.

 

STATEMENT FROM DUBLIN PORT COMPANY

Dublin Port Company is a State-owned commercial company responsible for the management, operation and development of Dublin Port - the largest and busiest port on the island of Ireland with a planned capital investment of €1bn over the next 10 years.

The company is well-managed, profitable and has a turnover of €90.4m which has grown by 28pc in the past 10 years. Dublin Port Company's total operating cost base is €43.6m.

All expenditure, including travel, subsistence and hospitality is disclosed in the company's financial accounts, which are independently audited and meet all reporting requirements and standards.

The highest standards of governance apply to robust processes and procedures on spending incurred in the legitimate course of doing business.

Credit Cards

Credit cards are used as an administratively efficient means of payment with strong audit control. Normal business purchases by credit card include flights, accommodation, corporate hospitality, company advertising, cruise marketing, staff Bike to Work scheme and Rail Saver tickets, motor tax and IT. All credit card expenditure is in line with the company's policy - only for business purposes, properly recorded, receipted and authorised, and subject to review by internal audit. The policy includes advance permission for all international travel, using economy class flights on short-haul routes and business class flights on long-haul routes. The policy also includes authorisation processes by senior management for each card, including the chiefexecutive's card which is approved by the chairperson.

In 2018, there were 22 credit cards in issue (among a staff total of 160). The total spend on credit cards in 2018 was €522,000 or 1.2pc of a total operating cost base of €43.6m.

Dublin Port Company's internal auditor reviews expenditure including on credit cards and reports directly to the Audit and Risk Committee of the board. No concerns have been raised about any expenditure.

The company's credit card policy is reviewed on an ongoing basis and updated regularly, most recently in May 2019 as a result of the move to a new credit card provider and the introduction of a new online system for reporting and approvals.

As a matter of policy, the company operates a Purchase Order based system. There are specified exceptions to the system in accordance with the company's procurement policy. These include one-off items which can be purchased more efficiently via credit card. Credit card holders are already authorised to purchase on behalf of the company in their role. They are subject to individual purchase authority limits appropriate to their function in the organisation.

Supporting Business Growth

Dublin Port has experienced unprecedented growth in recent years. By the end of 2018 the port had recorded 36pc growth in the past six years, and turnover increases of 38pc for the corresponding period.

Development works at Dublin Port are already advanced with construction of the Alexandra Basin Redevelopment Project under way and works commenced on the development of the 44-hectare Dublin Inland Port adjacent to Dublin Airport. Between now and 2040, other major development projects are envisaged on both the north side of the Port and on the Poolbeg Peninsula to complete the development vision of Masterplan 2040.

The Masterplan 2040 Reviewed 2018 is a strategic framework that informs the development of Dublin Port and to which all business activities are aligned in support of future growth, which will see the capacity of the port increased to cater for an ultimate capacity of 77 million gross tonnes. In support of this objective, the company's activities include:

* Travel

Overseas travel enables Dublin Port Company, amongst other factors, to learn best practice from international peers on a range of business issues, including seeing up close how other ports operate and manage similar capacity constraints. There are no other ports in Ireland of a comparative nature in this regard. The company's representation on or participation in leading European and international port organisations and programmes, including AIVP (Association Internationale Villes Ports / International Association of Ports Cities), ESPO (European Sea Ports Organisation) and the United Nations Conference on Trade and Development UNCTAD's Train for Trade provide valuable opportunities for the exchange of knowledge and training as the port modernises and expands.

* Port-City Integration Initiatives

The Masterplan also contains a clear commitment to greater port-city integration in support of business growth and development. This commitment has been well documented and evidenced through the company's "soft values" programme of community, arts, sporting, heritage and environmental initiatives. Recent examples include the refurbishment of the Diving Bell on Sir John Rogerson's Quay, an arts commissioning programme "Port Perspectives" and the creation of new public realm at Port Centre. The project at Port Centre included works to remove a section of the existing old boundary wall to create new pedestrian entry points at Alexandra Road and East Wall Road, Cor-ten steel entrance gates, a refurbished podium and the installation of new sculptures, a maritime garden and seating, new footbridge and relocated car parking facilities to the rear of the site, as well as a new landmark at the port-city interface using a refurbished crane from the 1960s. The capital expenditure on the project of €6.97m was fully reported to the board and approved.

* Competitive Tendering

All such expenditure is subject to competitive tendering and Board approval and is managed by the company's Programme Management Office, which over the last three years has completed capital projects to an aggregate value of €212m - all of which were competitively tendered. The nature of project development is such that some projects will come under budget and some will exceed budget. All variances are recorded and reported to the board quarterly. Under the Code of Practice for the Governance of State Bodies the company reports on any non-competitive procurement in its comprehensive report to the minister. During 2018, 1.95pc of a total procurement spend of €98.6m did not go through competitive tendering.

Sunday Independent

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