Examination of Witnesses (Questions 740
WEDNESDAY 28 MARCH 2001
740. You do not need all three?
(Mr Cuthbert) I said that you would need at least
two by 2010/2005. It would be a very brave person who said you
did not need all three. I think in 20 years you will certainly
need all three.
741. Could I just ask also the same question
on coastal shipping I asked of the previous witnesses. Do you
believe that there is a demand or potential for coastal shipping?
How do you advise that you could reach that potential?
(Mr Cuthbert) I think there is, and indeed coastal
shipping exists, and we have quite a lot of it on the Thames running
coasters on short sea route across to the North West Continent
and indeed, to some extent, straight up the Rhine, so some of
the ships actually go as far as Basle in Switzerland. The Government
I think is going to extend the Freight Facilities Grant for coastal
shipping and I think that encouragement and that bit of pump priming
will help in moving some cargoes north-south in the UK. At the
moment, indeed in London, we are looking at recycling glass and
moving recycled glass from the Thames to be processed in Goole
by water and that seems to be a double environmental benefit.
742. Do you have a view as to the way that light
dues are charged on shipping in UK ports and are not made at ports
in continental Europe?
(Mr Cuthbert) Yes, we do. In Germany, France, Holland
and Belgium, light dues are borne by the state. The fact that
shipsand you heard in earlier evidence the kind of charges
that are made on the big container shipshave to pay up
to £25,000 for the privilege of using the lights, which they
largely maintain they do not because they navigate by GPS, and
they feel they are subsidising yachtsmen and people like that
who do still navigate using lights and buoys to a much greater
extent, it does not actually help. I think it only has a marginal
effect but it is something which the big shipping companies moan
about, the British costs, because the British Government charge
light dues and our four competitor governments, if you like, in
terms of the deep sea container trade actually do not. It does
not help but I would not put it stronger than that. We would ask
that they were borne by the Exchequer but then I expect the Treasury
would say "Why should the British taxpayer pay for this"
and I understand that argument.
743. The four ports that you have named, do
they have the concentration of container traffic?
(Mr Cuthbert) The big ports that could potentially
be in competition would be Le Havre in France, Rotterdam in Holland
and then Hamburg and Bremen in Germany.
744. Given the fact that neither of the two
main political parties are likely to offer that the state take
over these payments, how do you see the way forward to achieve
the level playing field?
(Mr Cuthbert) I think the Government have announced
that they are actually going to look at light dues. I think the
Shipping Minister, Keith Hill, announced this on Monday. I suspect
that will turn into "Can the cake be cut in a different way?"
In the end, I think it is probably something the shipping companies
will have to live with. It is a continual source of irritation,
I would not put it stronger than that.
745. You would not say what percentage of your
overall costs light duties are?
(Mr Cuthbert) I do not run a shipping company and
I never have so I cannot really answer that question, I am sorry.
746. Can I ask you about the economic impacts
of this. If you have competition and if all these container ports
are becoming almost full but there is nevertheless very considerable
cost cutting competition between them, does this have an impact
on the long term investment in a particular port?
(Mr Cuthbert) I think it must do. As far as London
is concerned, P&O is going to make the decision at the end
of the day to make the £500 million or whatever it is investment,
not the Port of London Authority. Yes, this is finely balanced.
I think if one looks at ports as a national strategic asset, which
they have to be95 per cent of British trade by volume comes
and goes by waterthis is something that obviously the Government
and Parliament will wish to keep a close eye on so as to make
sure that the conditions are such that investment can be made
in the ports where people can make a reasonable and proper and
appropriate return so that in the long run we do not run out of
port capacity in the UK.
747. That is not the ultimate responsibility
of the Government, is it? It is the responsibility if the country
is under some kind of attack but under normal commercial situations
you would expect the shipping companies and the ports themselves
to be able to assess whether they are charging enough to be able
to reinvest in new equipment, would you not?
(Mr Cuthbert) Yes, you would but there is competition
between the ports, both in the UK, as you heard from the previous
people giving evidence, and also, to some extent, competition
from ports like Rotterdam as well.
748. Competition keeps down the amount of profit
that can be made.
(Mr Cuthbert) Yes.
749. And keeps down the kind of investment that
is needed to modernise ports?
(Mr Cuthbert) I would not go as far as that. My own
view is that competition is healthy and you need competition in
any business, particularly when private capital is involved but
it is finely balanced, I put it that way. It forces ports to make
sure they give a very good service. It forces ports to be very
efficient. I think I would argue that overall in the British ports
industry, the larger ports are efficient because they have to
be, because they have had to reduce costs, they have had to reduce
prices and they are overall making a good substantial return.
750. If the investment does not go in it is
the fault of the port and the shipping company?
(Mr Cuthbert) Primary responsibility would have to
be that of the port, first of all, I agree.
751. Mr Lerenius?
(Mr Lerenius) Yes, well, basically I agree with what
Mr Cuthbert said here but in addition I would like to add, coming
back to the container ports again, if you look at the growth rate,
we have seen over 15 years, even with a slightly cautious view,
if that continues, I believe all the three terminals are going
to be needed. My view is if we get the permission to build themI
think there is, from a market development point of view, all the
reason in the world to build themit is a matter of being
competitive in relation to European ports.
752. The competition will not be between the
British container ports but between yourselves and the Continent
(Mr Lerenius) I would say yes, we will compete with
each other but I still believeand I should mainly talk
for ourselvesyes, there is a good solid ground for investing.
The way we would do it, we would always contract customers before
we build the terminals so from that point of view we minimise
the risks, obviously.
753. What is the structure of the industry doing
to the landside provision in terms of access to the ports?
(Mr Lerenius) I should talk about Southampton and
Dibden again. With Southampton it is well placed, well situated
in relation to London and access not passing the London system
up through the country. There is a good road system, there is
reasonably good rail access, what we need to do then, as part
of our investment, the access into the actual ports estate is
obviously going to be our responsibility.
754. You would expect to develop that access
and put money into it?
(Mr Lerenius) That part, the access part, into the
ports estate is part of our investment, yes.
755. The Port of London?
(Mr Cuthbert) The same applies in the Port of London.
As part of the proposed planning consentno submission has
yet been made for Shell Haven -no doubt Thurrock Council, which
is a unitary council, will require certain benefits in terms of
road access. We are fortunate the A13 and the M25 are relatively
close. P&O are also talking to the Strategic Rail Authority
regarding improvements to the London-Tilbury and Southend railway
line so we hope a great proportion of the trade will move by rail.
756. Why is it that safety is so bad in the
ports in the United Kingdom?
(Mr Cuthbert) We run a harbour authority. In the Thames
we actually own virtually all of the River Thames, the Crown owns
bits of it as far as Southend and we control it out to Clacton
and Margate. There are something like 70 terminals operating on
the banks of the river which are all in private ownership. Really
from our own business point of viewI can only speak from
our own business which is the authority responsible for navigationit
is a hazardous environment. The Health and Safety Executive have
produced these figures which are of concern to everybody in the
industry. There is some argument, as you have heard, as to whether
everybody accepts that they are bad. The Deputy Prime Minister
called a Ports Safety Conference at the beginning of last week
or the week before and it is clear that we have got to work hard
on health and safety to reduce the number of accidents in the
port. Why the numbers appear so bad we find it difficult to see.
Our own record, I will say, is a reasonable one, I would not put
it higher than that at the moment. We have to take greater steps,
that is evident from that conference, to bring down the number
of accidents in the UK ports.
757. If you were able to provide figures for
the full time employee compared with the casual employee and then
look at the figures, would it clearly demonstrate that there is
a difference and that perhaps that is the main reason for the
industry being in the state it is?
(Mr Cuthbert) My honest answer has to be I do not
know because we do not employ any casual people.
758. Do you?
(Mr Lerenius) We do not employ any casual people either.
The statistics we have are for all our employees.
759. It is very comforting in a way, is it not,
to say "We own the port" or "We own and control
what is going on but of course we are not responsible in any way
for anybody operating in the port"?
(Mr Lerenius) No. I think that is a very fair point.
I think, first, the statistics we have are only for our employees,
we do not have any casual employees. We had an incident figure
in 2000 of 12 per thousand and, frankly, nothing more than zero
is actually good enough, now that is going to take time but it
has improved substantially. I suppose everybody seems to be saying
that today but in our case we know that the figure is substantially
below the average. However, I understand that an issue that came
up in the conference that Steve Cuthbert talked about was what
the responsibility was for the port for the people who work for
tenants on the port. Now, today, we have no possibility to control
1 Note by witness: ABP does supplement their labour
in some ports, but this is by contracting with reputable labour
supply/agency companies. All staff contracted are trained and
the requirement is for them to have a Port Safety Induction Card