18 September 2013
The European Commission launched new proposals for EU ports on 23 May. It published a communication, Ports: an engine for growth, identifying actions to improve port efficiency, andproposed a Regulation to liberalise port services and develop financial transparency. It estimates the proposals could save the EU economy €10 billion by 2030 and reduce port costs by 7 per cent.
The proposals apply to the 319 key European seaports, including six Welsh ports, identified in the Trans-European Transport Network (TEN-T) Regulation currently making its way through the EU legislative process.
The need for action
The Commission memo announcing the policy identifies challenges facing European ports:
- Predicted growth in port cargo volumes of 50 per cent by 2030;
- Variation in efficiency of European ports with less efficient ports affecting the success of better performers; and
- The need for ports to adapt to industry changes, including the increased size and complexity of the cargo fleet.
Additionally, the Regulation identifies a need to address market access restrictions and weak competitive pressure, excessive administration, unclear financial arrangements, and a lack of autonomy for some ports in determining charges.
The proposed Regulation
The Regulation includes provisions in three areas:
Market access: establishing freedom to provide port services and to access the necessary port facilities, for providers established in the European Union.
Financial transparency and autonomy: public funds must be reflected transparently in port accounts and the basis of port charges must be transparent, with charges set by ports themselves.
General and final provisions: A Port Users Advisory Committee will be required in every port which must be consulted on port infrastructure charges. Ports must also consult stakeholders on issues such as service co-ordination, while Member States must establish a national supervisory body.
In addition to the Regulation, non-legislative actions are proposed to:
- Ensure EU funding streams are aligned with the need to invest in ports;
- Ensure port contracts are procured fairly and transparently;
- Simplify port administration and clarify application of state aid rules to ports;
- Establish a ‘Social Dialogue Committee for Ports’ to allow employers and employees to discuss work related issues;
- Promote innovation, monitor performance and examine human resource needs; and
- Support environmental infrastructure charging.
Potential impact on Wales
Six Welsh ports are affected – Cardiff, Newport, Port Talbot, Fishguard, Holyhead and Milford Haven. While policy for larger ports is not devolved, Welsh ports are an important driver for the Welsh Economy.
The UK Government’s initial response to the proposals argues that the UK already has “the most liberalized and least taxpayer-dependent ports sector in Europe” so that the issues raised by the Commission do not apply. Instead the proposals risk “collateral damage” to the industry while the UK Government also believes the proposals will not effectively address unfair competition.
UK ports organisations have also been critical. The UK Major Ports Group (UKMPG), which includes Associated British Ports Ltd., owners of Cardiff, Newport and Port Talbot ports published a press release describing the proposed regulation as “ill timed, unnecessary and potentially harmful and unfair to UK ports”.
The British Ports Association (BPA), which includes all affected Welsh ports as members, acknowledges the proposals may be more relevant to “continental ports”, but is concerned that the proposals will not add value the UK port sector, including Welsh ports. Commenting on the proposal to open up port services and remove unfair / or restrictive practices the BPA stated:
We are not aware of any particular pressure from new market entrants but as distinct from most continental ports services in UK ports are very often carried out by the port itself. UK ports wish to continue with this arrangement, and there are options to do so [under the proposals], but there is considerable bureaucracy involved.
Additionally, while the BPA welcomed financial transparency in exposing public funding, it is concerned about regulation of port charging, the creation of port user groups and a national supervisory body which might “interfere unnecessarily with current arrangements”.
Both the UK Government and UK port bodies are currently formulating their position on the proposals in order to engage with the European Commission.
Article written by Andrew Minnis