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Dangerous obsession with property plays appears to be over states Dublin Port Company CEO

We are living through some very difficult times.  Throughout the length and breadth of the country, businesses and families are dealing with the consequences of our economic meltdown – the hangover after the Celtic Tiger party and all that went with it.  Now every day we are faced with the fall-out from the folly that our economy could have property speculation as the main driver of economic growth. I called it the “valuation distraction” during the heady heights of the boom which ultimately led to the systematic failure of business models based on short-term financial engineering rather than the intrinsic value of the businesses themselves.  Rather than dwelling on the previous mistakes, I, for one, am encouraged that we appear to have learnt our lesson from the past and can now make decisions based on a new (if old?) stronger, more sustainable, economic reality. 

By way of example, in the ports business we saw over recent years emerge from the period of property speculation a notion that Dublin Port should be moved so that a great fortune could be accrued from land sales and property development in the heart of the city.  The notion was that a vital, publicly owned, successful, thriving piece of our national trading infrastructure, which supports 4,000 real jobs in the real local economy and made real money for the Irish Exchequer, should be relocated to some unknown destination at a huge cost to the Irish taxpayer to facilitate a property play by private interests.

The recent Report prepared by Indecon for the Department of Transport, which was undertaken in the context of The National Development Plan, was a loud wake up call to reality and perhaps a signal in our sector that common sense is returning at last.  Putting aside the debates of recent years, and against the backdrop of the country’s stark new economic reality, the Report assessed the role and future development of Dublin Port in terms of location, ports policy, port capacity on an all-island basis, transport and urban development policies, the National Spatial Strategy and national economic policy. 

This Study examined in detail the cost benefit analysis of several scenarios relating to Dublin Port including:

  • Relocating all or part of Dublin Port’s existing activities to an alternative location/s
  • Existing port activities continuing to expand with demand
  • Port activities continuing at current levels with growth being catered for  at alternative locations.

The conclusion at last confirmed the strategic importance of Dublin Port, the gateway to the Irish economy, and the Study stated that the expansion of Dublin Port is the appropriate policy at this stage.

The Board of Dublin Port Company has formally endorsed the key conclusion of the Report which found, after a detailed cost/benefit analysis of seven different scenarios, that the retention of Dublin Port in its present location, together with on-site expansion, would deliver the highest net present value in cost/benefit terms.

The Board has embraced the challenges for the Company that this key conclusion presents and commits to delivering and securing the economic (net present value) return for the State and all its stakeholders.

In Ireland today, as we prepare for a tough budget and the national debate is about spending cutbacks, it is important also that we look at our approach to strategic investment, our own “stimulus” spending, to help us get out of the recession.  The Government rightly wants to identify and continue the capital spend programme with major infrastructural projects that will help rebuild our competitiveness long term.  These projects will also in the short term provide much needed employment in the construction sector in particular. 

Good “shovel ready” projects are needed which will directly aid our national recovery from this deep recession and will make us well capable of taking advantage of the upturn when it comes.  While focusing on cutbacks in some areas of expenditure, it is also a time to invest in key strategic areas that will assist recovery.  We need to face the future not stand still, frozen in fear.  We need to nurse recovery along and have our infrastructure in place when it comes.

The role of ports – and Dublin Port in particular as the gateway to the economy - are rightly coming to be seen and treated as a vital part of our programme for recovery.  Real jobs in the real trading economy are being valued once again.  Our traded goods sector, our ability to invent, to manufacture and to export will be the backbone of our return to competitiveness, renewal and growth. Dublin Port is embedded in this real economy – helping create, sustain and service it.  And we take heart that this at last is being recognised if Indecon is anything to go by.

Encouraged, we face and relish the challenges ahead. The Company will continue to drive for efficient, profitable growth and as a major commercial state enterprise will make sure its development agenda helps in the drive to restore our national competitiveness.  We are very conscious of the need to support the 4,000 real jobs in the local Port estate economy and the need to protect the €35 billion per annum in trade which flows in and out of the Port.  Commentators say our national recovery will be based partly on exports and green energy and Dublin Port Company will play a strong role in helping grow our €20 billion in exports, and do so in an environmentally sustainable way by bringing goods and people close to their market.

All of this means that we can now move ahead to play our full part, at no cost to the Exchequer, as a  modern efficient port  well equipped to help our recovery and support Irish enterprise  in availing  of the full  opportunities it brings. Academic debates and private property play agendas in respect of Dublin Port or other state bodies will no longer be indulged – the price has been too high. Sound policy and wise investment decisions can instead be taken for the future of the port and we will approach this challenge with renewed impetus in light of conclusions of the Indecon Report.

We in Ireland are hopefully learning our lessons fast.

Enda Connellan is Chief Executive of Dublin Port Company

This article appeared in the print edition of the Sunday Tribune, Sunday November 15th 2009

Date Published: Wednesday 18. of November 2009

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