Examination of Witnesses (Questions 260
WEDNESDAY 3 JULY 2002
260. What do you say then?
(Captain Chestnutt) It is outside my level of competence
to tell you precisely what that figure is, but what I can tell
261. Oh, being outside one's level of competence
never stops any of our witnesses, Captain Chestnutt.
(Captain Chestnutt) Quite. We would dispute some of
the standards that are being set.
262. Some of the standards? You mean you would
expect it to be done more cheaply by not complying with existing
(Captain Chestnutt) We think there are different ways
of achieving what we require. At its simplest there are gauges
to be met and they have the numbers W10,11 and 12 or whatever,
but in order to get them in 96 boxes out of Southampton
we believe there is a set of targets that must be met which are
cheaper, which can be met well inside the figures that we believe
the funding mechanism supports.
263. So give us the figure, approximately.
(Captain Chestnutt) I cannot. I will forward to you,
to be fair.
264. I presume that you represent the Major
(Captain Chestnutt) We are a member of the Major Ports
(Mr Lerenius) We represent one company, Associated
British Ports, but we are a member of the UK Major Ports Group,
Miss McIntosh: In your submission you say that
it is important that protected designations and environmental
concerns may influence decisions on ports' ability to meet demand.
It is in the memorandum, page 5 at paragraph 4.3. You are saying
that the way that protected designations influence decisions on
ports' ability to meet demand should be applied consistently both
across Europe and throughout the UK. You go on to say that there
is compelling evidence that this is not at present the case. You
may not be able to share it with us today but I for one would
find it helpful if we could have a paper.
Chairman: Have a go at sharing it with us today.
Give Captain Chestnutt the quote again.
Miss McIntosh: It is page 5, 4.3 of the Associated
British Ports' memorandum prepared for you by Adams Henry.
Chairman: It is the two middle paragraphs.
265. You say that there is compelling evidence
that there is not a persistent application in protected designations
that are both within the UK and within Europe. I just wondered
if you had examples that you could give the Committee today.
(Captain Chestnutt) This is evidence on the way in
which SPAs, SACs are mitigated for?
266. We are not using too many initials in this
(Captain Chestnutt) This is a reference to the way
in which mitigation is provided for European designations and
we believe there is compelling evidence and I can present some
to you subsequently as to where we think the differences lie.
267. Thank you. Do you think the demand for
your ports services currently exceeds supply, that basically more
people are asking for port services than you can supply?
(Mr Lerenius) Are you talking in general terms or
in containers or what?
268. Which sectors and which ports are under
the greatest pressure to increase capacity?
(Mr Lerenius) To begin with, the way a port operates,
when you build something you build to demand, basically. At least,
that is the way we work it, so there have to be customers that
have the demand. Obviously you build for demand somewhat in the
future because when you agree on something and then build it that
takes a year or a year and a half, depending on what you build.
That depends on what trade you look at and what port you look
at. If you look at containers, coming back to, say, Southampton
again, yes, with the present growth rate in just a few years we
will run out of capacity.
269. Would you say there are too many small
ports in the United Kingdom at the moment?
(Mr Lerenius) No, I do not think so. We own and run
21 ports and some of them are very big and some of them are very
small but I think, at least looking at our ports, they are all
270. So you seen no argument for concentration?
(Mr Lerenius) At least not in our own structure.
271. Other people's structure you do not mind
if they do?
(Mr Lerenius) I cannot really comment in detail on
that but I do not think it is a big issue.
272. The extra capacity that perhaps needs to
be found, will that be found at ports which already handle a great
deal of traffic or will other ports expand their operations into
the areas where there is demand?
(Mr Lerenius) Basically, if you look at our structure
and how we look at it strategically, we would try to expand our
273. Post-September 11 and the additional security
arrangements, are you able to put a figure on what those costs
(Mr Lerenius) No, I cannot give you that. It has cost
us some money but again, we have to cope with it. We get directives
from government on what level of security to be on and we just
have to cope with that. It is nothing major.
274. You say that the proposed directive on
ports will be very detrimental to ports in this country compared
with mainland Europe. What are the differences in the situation
between here and mainland Europe, which of course is different?
(Mr Lerenius) Overall our view is that directives
are not welcome and not needed if you put it in general terms.
In the UK ports business the structure here is extremely different
from what you see on the European continent. We are privately
run, rather efficient companies where there is already big competition
between ports and in many instances competition between service
operators in the ports. With that structure we could say that
we have almost sorted out the issue that the directives deal with.
I think the directives are more aimed at, as we heard the previous
witnesses say, some of the continental ports where they are usually
owned by the city and the respective cities or towns and usually
you would find more or less a monopoly on the services in the
port, and I suppose that is what the directive is trying to sort
275. If the directive is implemented what effect
will it have on British ports?
(Mr Lerenius) We have seen a number of drafts on these
directives. The existing draft, which is the one that was decided
to go ahead with under the Spanish Presidency in the EU a week
or 10 days ago, we have not seen. What we know is that the Department
for Transport here in the UK have been instrumental in improving
it from how it looked just going back one or two drafts, but there
are still things on durability, on contracts, which could limit
the customers' or operators' interest in investing in our ports.
276. In what sense? That they would not sign
contracts for long enough to cover investment?
(Mr Lerenius) If an operator invests, say, in a major
facility in a port; say, we build the infrastructure and part
of it but he invests some of his own money to operate it, it depends
what sort of contract it is, but according to the directive it
could only have a duration for a certain time and that could make
a customer give up his investment because it has to go out for
tender and he will be slightly less interested in investing for
the future than is the case today. Again, I would say that the
Department for Transport have been very helpful. That duration
period has increased and we still hope we can increase it further.
On the pilotage issue we are not really certain how that will
be handled because we have not seen the latest draft. On safety
and fragmentation we are slightly worried, but we have not seen
the latest draft. You can say that whatever it is we are going
to have to cope with it.
277. How damaging do you think it will be according
to the drafts that you have seen?
(Mr Lerenius) I do not think we can put a figure on
it. I think these are the major problems we see with it. Again,
the way we are going to have to handle this is to try in a proactive
way to cope with it. It is now going to the European Parliament
and we hope we can make further improvements by lobbying and continuing
to work on improvements.
278. But the history of directives in these
circumstances is not that the European Parliament improves the
directive. The history of these types of arguments is that there
are certain rather vested interested in pushing for particular
bits that concern them but that there is no material change.
(Mr Lerenius) I think the European Parliament has
actually, during the process up till now, been a bit helpful and
they have tried to make changes which we thought were very good.
Some of them were accepted.
279. They did not succeed?
(Mr Lerenius) On some of them they did, but on some
I think the Commission just said, "Forget it", and went
ahead. Parliament will now of course have it for a new reading
and hopefully we will work on that.