Taking on board renewed interest in ports

Date: 20/03/1997

By Chris Johnstone

EUROPE's ports are moving into the mainstream of Commission policy-making after their recent past in a relative backwater where most EU initiatives appeared to arrive with all the warning and welcome of an uninvited caller.

The memory of Commission demands that ports give preferential rates to ships with double hulls or segmented ballast tanks, to encourage more environment-friendly vessels, still fuels a bitterness which has yet to heal.

Ports were hardly consulted on the measure and were only able to win relatively minor concessions before it came into force in January 1996.

It was like telling garages to increase their charges for dealing with older, polluting cars and cut them for the latest models, says the current president of the European Sea Ports Organisation David Jeffery.

He believes that the measure will probably only result in shipowners taking their worst vessels outside European waters and says that it is unlikely to speed up the production of environmentally-friendly ships which, in any case, will be phased in by 2008 according to an international timetable.

But Jeffery, chief executive for the last ten years of the Port of London Authority, hopes to put a lot of clear blue water between the present and such unhappy episodes in the past.

In fact, the Commission's current attention to the sector could not be more welcome.

Transport officials are drawing up a Green Paper on ports which, for the first time, should lead to guidelines spelling out what public subsidies are acceptable in the sector.

“We really need guidelines on what is normally permissible in order to make judgements,” says Jeffery.

That demand for clarity comes at a time when structural, regional, and cohesion funds are pouring into some European ports.

“Ireland is a perfect example of how cohesion fund money can be spent, with the amount of funding doubling for some ports over the last few years,” he explains. At the same time, Spain has invested relatively little of its Union windfall in the port sector.

All European ports, including government and regionally owned operations, join the likes of the commercially run and operated Port of London in stressing the need for clear aid rules, says Jeffery.

Traditionally, aid is a burning issue for northern European ports such as Antwerp, Rotterdam, Zeebrugge and Hamburg. These are ports which are relatively close together and vie with each other to take goods in and out of the EU's industrial heartland.

Southern European ports normally have a more clearly defined hinterland which makes aid a less sensitive issue, says Jeffery.

But plans for 44 million ecu in aid for the port of Gioia Tauro in Calabria, southern Italy, are forcing other Mediterranean ports to sit up and take notice that their customers and revenues could be under unfair attack.

Jeffrey argues that operating aid, which allows ports to cut their charges for everyday services, should clearly be banned, but infrastructure subsidies should continue.

However, the line between the two is not always easy to draw. “In some countries, governments pay for the dredging of channels. In other cases, it must be paid for by charges on ships using the port ... You could argue that this is not state aid, but it is like a government or local authority paying for mending a road,” he adds.

The Green Paper apart, Jeffery is sceptical that the Commission's initiatives to boost short-sea shipping round Europe's coasts can succeed while other forms of transport such as road, rail and air do not cover most of their infrastructure costs.

“We are discriminated against in so many areas. I think all modes of transport must bear all their costs, including environmental ones. You must question some of the projections on volume for short-sea shipping, although it could be attractive for bulk cargoes. In bulk, there is a definite market. At the Port of London, it is a normal operation to bring in sand and coal which can be later loaded on to barges,” he says.

Finding niche markets for shipping rather than trying to revitalise broad sectors might be the best bet for the industry, says Jeffery.

He believes the Swedish example, where large bulk paper cargoes have been successfully transferred to specialised vessels, is the way forward. However, one condition for that change-over was heavy pre-investment in self-unloading vessels.