We are living through some very difficult times. Every day we are faced with the fall-out from the folly of an economy that had 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 during the period of property speculation, there was 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 was a loud wake-up call to reality and perhaps a signal that common sense is returning at last. 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:
o Relocating all or part of Dublin Port's existing activities to an alternative location/s
o Existing port activities continuing to expand with demand
o 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 and stated that the expansion of Dublin Port is the appropriate policy at this stage.
The board of Dublin Port 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 return for the state and all its stakeholders.
In Ireland today, as we prepare for a tough budget, 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 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 recovery from this deep recession and will make us 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.
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 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.
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 €35bn 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 €20bn 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 equipped to help our recovery and support Irish enterprise. Private property agendas in respect of Dublin Port 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.
Enda Connellan is CEO of Dublin Port