Official Report: Minutes of Evidence

The Chairperson (Mrs Erskine): Welcome to the Committee meeting. It feels a bit strange to be welcoming you to your own building. We thank you for giving us evidence today, and we are looking forward to hearing from you. We welcome Dr Theresa Donaldson, the chair; Mr Joe O'Neill, the chief executive; Mr Maurice Bullick, executive director, finance and compliance; and Natasha Sayee, executive director, corporate affairs and engagement. Thank you very much for having us today. We really appreciate the opportunity to have our Committee meeting here. It has been probably a long time coming, but we are very glad to be here, and we thank you for your hospitality already today.

You sent us quite extensive information, which we have read. I am aware that you have a presentation to go through. I will give you about 10 minutes or so, and we will then go to members' questions. Over to you.

Dr Theresa Donaldson (Belfast Harbour Commissioners): Thank you, Chair. Hopefully, we have timed this quite well. We appreciate that you are very busy and have a lot on today. It is my pleasure to welcome the Committee to Belfast harbour. I am very pleased to be joined, as you have indicated, by the chief executive, Joe O'Neill, who is to my left; Natasha Sayee, our corporate affairs director, who is to my right; and Maurice Bullick, who is our finance director.

I thank the Committee for visiting us and covering with us the review of trust ports legislation. We are encouraged that that important review is progressing, and we commend the Minister for pushing it forward in the way in which she has done in a very busy schedule. We also acknowledge the work of the officials in the gateways team at the Department for Infrastructure for their work on the review to date. The Committee will be aware that the issue has been looked at extensively in the past. The groundwork is largely complete, and it is over to the Committee and the Minister for due consideration. It is our ask that, for the benefit of everyone in the region, the legislative process be concluded within this Assembly mandate.

I am also very pleased that we are joined today by colleagues from Warrenpoint harbour and Coleraine, who are in the Public Gallery. We thank them for their support. We were hoping that colleagues from Foyle port would join us as well, but, unfortunately, they were not able to make it today. We also acknowledge that members of the Department for Infrastructure drafting team are in the Public Gallery. We have been working collaboratively with all of the Northern Ireland trust ports; we are aligned on this issue. It is a modernised legislative framework that would allow each of us to do even more for our customers, communities, towns and cities. The members who are joining us on a port tour this afternoon will see at first hand the regeneration, transformation and innovation at Belfast harbour.

We will try to keep to the 10-minute timescale. I say at the outset that we are not asking the Committee for anything other than the support of legislative change to enable us in Belfast Harbour Commissioners to do more. We want to do more for the people of Belfast and beyond. We are not asking for money. You mentioned waste water. We know that you have a lot of responsibilities and that there is a huge draw on public finance. That is not an ask today.

Once again, you are very welcome to Belfast harbour. It is apt that the session is being held here in the historic harbour office. This building, which we take care of for the city and the next generation, sits at a crossroads. On one side, we have the port, which is the engine room of the economy. Achievements include the fact that 70% of Northern Ireland's seaborne trade and 25% of seaborne trade for the island flows through Belfast harbour. Having welcomed the first cruise ship to Belfast in 1996, Belfast harbour is now the busiest cruise port on the island and the second-busiest in the UK, after Southampton. Cruise tourism from Belfast is worth an estimated £25 million to the local economy each year, but we think that that is an underestimate; we will do some work later in the year to accurately estimate what we are bringing in through cruises.

On trade, we are the ninth-largest port in the UK. Our core business continues to be resilient. We are the only port on the island with purpose-built facilities to support the offshore wind sector. Last month, we announced the single biggest investment in our history — £90 million — for a new dual-purpose deepwater berth to accommodate some of the largest cruise ships in the world and for the assembly and installation of the next generation of offshore wind turbines.

On the other side of the channel — the crossroads that I mentioned — we have the estate, which is home to 760 businesses, including the FDI-enabling and environmental, social and governance (ESG)-leading City Quays scheme, with marquee tenants such as Aflac, Baker McKenzie and Santander, and in what was once an area of mudflats stands Titanic Belfast, George Best Belfast City Airport, Catalyst, Belfast Metropolitan College and Belfast Harbour Studios. Northern Ireland Screen estimates that productions filmed there in recent years have delivered £200 million to the local economy. Belfast Harbour Studios is also home to the first Belfast region city deal project to be realised — the world-leading virtual reality production facility, Studio Ulster.

We are growing a welcoming and vibrant community. Around 1,000 people will be living here by this time next year, and that could grow to some 10,000 within a decade. We are taking steps to ensure that it is an inclusive and safe place. We are supported by Belfast Harbour Police in that objective. To support our communities and the charity sector, we donate 1% of our operating profits, each year, to grassroots community projects. That has amounted to about £3·5 million over the past 10 years. You may have seen the newly opened City Quays gardens on your way in this morning. It is the first One Planet Living-accredited project in Northern Ireland. It is a green space for everyone to enjoy. You will see it later, if you have not seen it already.

I will say a bit about our trust port status. Those transformational projects did not just happen. The success of Belfast harbour is down to a handful of key factors. One unique factor is our 2,000-acre landholding, which we are utilising to its full extent to benefit Northern Ireland. Our people, our employees, the leadership team and my board colleagues are all dedicated to making a difference. While we are an independent statutory authority, we proactively implement government policy, be that on the drive to net zero, providing affordable housing or supporting the globally competitive economy. We are key enablers of policy, and our new five-year strategy, 'Advance Regional Prosperity', is carefully aligned with the Programme for Government, the Belfast Agenda and Belfast's local development plan.

Our commercial strategy is thoughtfully balanced between port and estate, combined with prudent financial management and robust governance. Over the past decade, we have invested £374 million in key infrastructure projects, and, during the next five years, we will invest a further £313 million. All of that is generated from our profit and cash reserves, without public money, as I said earlier. To be clear, we are not asking for public money: I repeat that.

Our partnerships and transparency are critical for us. In the absence of Northern Ireland ports governance guidance, we voluntarily work to the Department for Transport's 2018 'Ports Good Governance Guidance', which represents the gold standard in public accountability. We publish KPIs and accounts. We have a port users' forum and a joint project board with Belfast City Council, and we hold an AGM and business briefings with the Infrastructure Minister and scheduled review meetings with the Department for Infrastructure. We welcomed representatives from all political parties throughout the year. That is a rolling programme, and we will be starting to issue invites for this year.

There are exciting things happening here in innovation. We are piloting automation to make the port safer and more efficient. Tomorrow, we officially launch the road trials for the Harlander autonomous shuttle bus.

The final success factor is our trust port status. That means that there are no shareholders, so all post-tax profits generated by the Belfast harbour are reinvested for the benefit of our stakeholders. To be clear, we value that status. There is nothing in the proposed legislation that would alter our trust port status. We are working with the Ulster University economic policy centre to fully understand our overall positive impact on the local economy. I hope that you see from this overview that we are an effective trust port. However, we want to do even more, and we need a modernised legislative framework to allow us to do so.

It is more than 20 years since the Office for National Statistics (ONS) changed the accounting classifications of all UK trust ports from private to public corporations for accounting purposes only. That change linked trust port borrowing to public expenditure, which means that, if Belfast harbour were to use its existing powers to borrow up to £45 million through a loan from a bank, it counts against the Department for Infrastructure's budget. Even though no public money would be involved, it would have an impact on the resource that is available to the Department. That is not something that we want to do.

We need legislative change to enable ONS to reclassify all Northern Ireland trust ports, freeing up departmental expenditure at a time of highly constrained public finances; reducing nugatory bureaucracy; freeing up officials to do more of what matters; and giving us the flexibility to prudently borrow in order to finance projects that benefit the economy, society and the environment. It is worth noting that, in 2015, the Scottish Executive implemented legislative change that enabled ONS to reclassify Scottish trust ports as private corporations for accounting purposes only. We believe that it is time that Northern Ireland trust ports have the same opportunity to compete and grow.

While ONS reclassification would be a game changer for Northern Ireland trust ports, it is important that I briefly mention the other legislative changes that we seek that will have a positive impact on our operations. First, the Department for Infrastructure proposes to clarify and widen trust ports' commercial powers. That change would bring us in line with ports in Ireland and GB and put us on a more competitive footing. The second change has to do with introducing new harbour orders and amending existing ones and, again, would bring us in line with GB. Northern Ireland trust ports would be able to do the heavy lifting on the drafting, consulting and legal scrutiny of new harbour orders or those that need to be amended, making the process more efficient and reducing the burden on the Department for Infrastructure. Finally, throughout everything that we do, marine safety is always our priority. We support the introduction of a legislative power that would enable us to give directions to ships and other vessels, helping us to continue to prioritise safety and bringing Northern Ireland trust ports in line with ports in GB.

In closing my introduction, I say that I am proud to be chair of this organisation, which is delivering so much for the region and its people today, through its safe, competitive, innovative and successful operations. Like the Committee, we are working towards a better future for Northern Ireland. Belfast harbour can be an even greater force for good if enabled by a modernised legislative framework. We are pleased to have the support of Belfast City Council and key institutions such as Queen's University and the backing of major business bodies, as well as broad support from our customers and partner organisations. They all recognise that this is a good news story for the region, which will unlock the potential of Northern Ireland trust ports and what we can achieve for the economy. We hope that you will support the legislative change needed and ensure that the process is concluded within this term of the Assembly.

Thank you, Chair. My team and I will address any questions that you may have.

The Chairperson (Mrs Erskine): Super. Thank you so much. As MLAs, it is refreshing for us that we are not hearing about the budget or anything such as that today. This relates to future investment and the economy, which is a major issue. Whilst we are not the Department for the Economy, it ties in with that. We recognise that Infrastructure is a key enabler for that. It is important that the change is right and that it works for the ports. That is what we will be looking at in our scrutiny. I recognise its importance, given that it has been so long in the making. However, as a Committee, we are keen to make sure that it is not legislation for legislation's sake and that it works for everybody on the ground.

I have looked through the wealth of information that you have given the Committee. If you were sitting where we are sitting and you were looking at the pros and cons of such legislation, what would you say are your concerns about the current ONS classification and the pros of a new classification?

Dr Donaldson: We have major concerns about the current ONS classification, because it restricts our borrowing. We cannot leverage the assets. We have a very significant asset base, but we rely on the profits that come through the port to do all the things that you see around you.

As I said in my presentation, we think that we can do more. A simple accounting treatment is preventing us from doing that. We do not see any downside to that reclassification. Certainly, we would work very closely with the Department, as we do already, so that, if any concerns were coming from government, we would address those with departmental officials as the process progresses. We are doing that already.

We see only advantages. When you look around the port — you will see more when we go out in the pilot boat later — you can see what we are achieving by being able to make the £90 million investment for a new berth for cruise ships and what will be our second offshore wind berth for floating offshore wind turbines. With ONS reclassification, we would be able to do more of those projects.

We want this place to be an inviting, safe place for people to come and live. You have heard me say that, within the next decade, we could have 10,000 people living in this area. There is a huge responsibility on us to develop the area, along with government officials and strategic partners, in a way that is appropriate for people to come to live and work here. There is a big ask on the port and harbour in what we feel that we need to do over the next period. The only way in which to achieve our advance regional prosperity strategy is by having that ONS reclassification. If we do not get it, the downside will be that we are restricted in what we can achieve for the people of Northern Ireland.

As I said, we recognise that the pressure on public resource is huge. We are not seeking to put a further burden on public resource. Ours and the other trust ports would be growing the cake, if you like, by contributing to the economy: we would not be taking anything out. I do not think that very many bodies that come before the Committee or, indeed, any Committee would be able to say that. I cannot see any downside. If any problems have been flagged up during the consultation, we are happy to address them, but we see only the advantages of reclassification for the people of Northern Ireland, for us, as I said, and for the other trust ports.

The Chairperson (Mrs Erskine): Thank you. You said that £313 million will be invested in the next five years. As we have seen through the evidence that you have provided and, obviously, what we can see and will see later, you have already led huge investment drives in this area. You talked about mudflats and how the area used to look. It has been completely transformed, which is amazing. Under the existing legislation, what specific barriers have you seen to potential further growth investment? You talked about autonomous vehicles and things such as that. An awful lot of things are coming through, but you are bound to have faced barriers as a result — I only imagine that you have, given the evidence that you have provided — of the existing legislation. Have you had to pause or stop certain projects as a result of that?

Dr Donaldson: Chair, I will bring up our port master plan and bring in the chief executive to say a bit about it. We are currently preparing the port master plan. We have not gone into a lot of detail on it in the presentation, because we will come back before you at a later stage to talk about it in more detail. You will be very excited about it. It looks towards 2050 and what we want to develop. There will, however, be huge cost — there is huge cost — even just to maintain the port. There are lots of exciting projects in the advance regional prosperity strategy that we will be able to fund, but there are lots of other things that the port will need to do just to keep going over the next 10 years that a reclassification would enable us to do. Joe, do you want to come in?

Mr Joe O'Neill (Belfast Harbour Commissioners): Yes. Thank you, chair. We have some immediate, near-term and medium-term challenges with the current classification and its limitations. The £313 million figure that you referred to, which is our projected capital spend for the next five years — a slightly unusual number, you may say, because we did not round it up or down — is quite specific, because we have had a look at our existing cash balance going into that five-year period and what we anticipate will be our earnings or surplus post tax over that five-year period. Effectively, we have sought to utilise all those financial or fiscal resources to reinvest back into the harbour. About £200 million — £208 million — of it is for port developments, including the large £90 million project that the chair referred to, and £105 million is for the estate. In targeting those proposed investments, we have had to leave other projects by the side that we cannot develop at this time but would dearly love to.

The most immediate project is City Quays 4, which is a project on the waterfront, beside the AC Hotel Belfast by Marriott, for which we have already got consent. It is for 256 apartments with an accompanying 69 affordable and social houses on two sites in the adjoining Sailortown. That is ready to go. There is a market demand for that product. We have full consent in place and have had early engagement with the contractor, but we are unable to proceed with that, because we have committed all our near-term finances to supporting the development of the £90 million quay for cruise ships and offshore wind. Had we not the limitation, under existing legislation, of access to £45 million or, perhaps, a higher sum, we would be on-site delivering that product.

We would also be on-site delivering a number of logistics warehouses. That is part of our bread and butter. As a port authority, we develop large-scale logistics warehouses for the major transport supply chain companies. Again, we are unable to do that because, correctly and importantly, we have committed £90 million to the deepwater D3 quay, and we cannot foresee a point over the next three or four years at which we will have the cash to invest in further warehousing.

The big one that is coming up in the medium term, as the chair said, is the new master plan that we are finalising and will publish early next year. That looks at the capacity that we need to provide in order to support the growth of the economy over the next 20 to 25 years to 2050 and some of the related projects that we want to deliver.

The early findings from the master plan work are that we will have to make significant investment in some of the older areas of the port where we handle bulk trade. Our largest deepwater quay is at Stormont Wharf, where all the grain and animal feeds come in. They are an important element of the food supply chain. That is a 1960s asset. We will need to reinvest to rebuild it, and the likelihood is that there will be an accompanying deepening of the channel. That will be a major capital expenditure project. We foresee that we will need to borrow to deliver that project and a number of others in the master plan. The effort to push through the legislative change and to get an ONS reclassification is, if you like, our anticipating a greater demand for borrowing in four or five years' time.

Here is another reference point for you: £313 million over five years against £374 million over the previous 10 years. Hopefully, that reflects an accelerated spend, which is for two reasons. The first is that the cost of delivering capital projects in a port environment has escalated phenomenally. You just heard us talking about £90 million for a single quay. Most infrastructure projects that we look at now are at least £50 million. Construction inflation and delivery inflation are contributing to individual cost prices going up for our major projects. We then have a wider array of projects than perhaps we have had in recent times, because of the focus that we have had on social and economic delivery projects across the estate as well as the port.

The Chairperson (Mrs Erskine): Thank you for that. It shows how much investment is going into the area and round about. You referenced Warrenpoint harbour and Foyle port as well. I am sure that a lot of collaborative work goes on. What specific issues have been identified through the commissioners' collaborative work with other trust ports in Northern Ireland? Do the issues vary between the locations and other related issues? It is about looking at investment in the different areas for different reasons.

Dr Donaldson: I should mention that Coleraine port's representatives are in the Public Gallery. I will kick off the answer by saying that the trust ports are all different and have different aspirations. We do not want to speak for the other ports, because they will probably want to address you themselves. However, there is no doubt that the enhanced borrowing powers would benefit all the trust ports, and they are all supportive of the legislative change and the other elements of the legislation that I mentioned.

Mr O'Neill: There has been great collaboration so far. Without speaking too much on behalf of the other ports, I think that we all find ourselves on the same page. I cannot recollect any point of dissonance in any meeting. The areas of commonality are around the desire to have access to our existing legislative ability to borrow but our not choosing to do so, because of the impediment that that would create for the Department's budget; and, hopefully, an enhanced level of borrowing to reflect construction escalation for large projects. We are all as one as well — our individual harbour masters, in particular, are all as one — around implementing the power to direct legislation for safe marine control. That is something that all the ports in GB enjoy. It is a quirk of legislation that it has not been implemented here. We would like to see that happen.

As you heard, we are a statutory body, so we rely on legislation. Some of that is quite dated and was probably drafted at a time that does not reflect modern-day business opportunities and methodologies for delivering those opportunities. We, collectively, are asking for the modernisation of some of our commercial powers. We are all on the same page in that regard.

The Chairperson (Mrs Erskine): I will ask one question before going to other members. It is not related to this particular legislation; it is related to the investment that you hope to make in housing. The Committee is very aware of the capacity issues that are faced by NI Water. How much do those issues impede your plans? It is all well and good having plans that are shovel-ready, but we may not have the capacity. We know that there have been pollution incidents in Belfast lough, which is another key concern. Will you touch on your engagement with NI Water and the Department in that regard? Will it impact on your plans?

Mr O'Neill: I am happy to do so. I will give you the strategic context. Under the Belfast Agenda, 31,600 new homes are envisaged to be in the city by 2035, 3,600 of which will be in the Harbour estate: roughly 2,900 in the Titanic Quarter area and a further 600 or 700 in the immediacy of this office. The lion's share of the ambition is over in Titanic Quarter. The master plan for Titanic Quarter, some 10 years ago, considered what the infrastructure requirements would be to deliver that magnitude of housing. We own, manage and invest in the sewerage infrastructure throughout the Harbour estate. Our own systems and network in Titanic Quarter and over here have the capacity for that development. The issue is about where that connects at the boundaries to the NI Water system. There is a substantial piece of work with NI Water as part of that master plan and consent to look at. What is its capacity at that intake point, where the two systems match? NI Water is comfortable that there is capacity for the near-term plans. If we were to expand beyond that — I think that there is a recognition that we could accommodate further residential development in the estate — we would need to sit down with NI Water to look at what that would generate by way of further demand on its infrastructure and how that could be addressed. However, the near-term delivery aspirations can be catered for by our existing infrastructure and connectivity to NI Water's.

Mr Stewart: Folks, I echo the Chair's praise about your welcoming us here today. It is a fantastic building. It is also great to see representatives from the other trust ports here today. I praise the work that you do, and its social and economic impact not just on Belfast but across Northern Ireland plc. It is fantastic. The scale of the innovation and ambition that you have described today throughout Northern Ireland with the other ports is really exciting. I have absolutely no problem with what is trying to be achieved. Obviously, the devil will be in the detail of the legislation, and we will come to that and scrutinise it properly, but when it comes to the general principles of what we are trying to achieve, I believe that we are all in that together.

That having been said, there are some detractors out there. We heard commentary about the consultation process. What would you say to those who are trying to suggest that the legislative change is privatisation by the back door? Will you set out why that is not the case?

Dr Donaldson: I stated at the outset that our trust port status will not be changed. I am going to embarrass Joe and Maurice: they have between them over 50 years' experience of this place. It is a huge advantage that we have that status. I have worked a lot in local government, other public-sector organisations and the voluntary sector. It is one of the great strengths of the ports that we have that status. It means that the port does not belong to anybody. In my view, that means that it belongs to everybody.

Mr Stewart: Absolutely.

Dr Donaldson: There is nothing in the legislation that will bring privatisation on to the table for any of our ports. Obviously, Larne is a different kettle of fish and is not represented here today.

The trust ports will remain trust ports. There is no suggestion of changing that. If such a change were to be made, it would come from the Assembly; it would not come from us. In fact, we would strongly oppose any suggestion to do that, because we see the strengths of the trust port model and desperately want to retain it.

Mr Stewart: Excellent. That is what I thought.

The consultation finished earlier this year. On the back of that, has there been any follow-up with the Department on what the draft legislation will look like and how that process is going? How key is it that we get this done in the current mandate?

Dr Donaldson: If you do not mind, I will bring in Maurice Bullick to address that point.

Mr Maurice Bullick (Belfast Harbour Commissioners): Good morning, everybody. Thank you for the question. We have been engaging with the Department. The function that you describe on the development of the legislation sits squarely within the Department's purview. We have had initial engagement on it, but the Department is better placed to answer that question in detail. From what we understand, there is a prescribed process to go through, a sequence of events and an order in which things have to happen. From our perspective, we will put informal early input to the Department just to give it some of our thoughts. The prescribed format requires the approval of the Minister and the Executive and engagement with the Office of the Legislative Counsel. Whilst we may offer to assist, it is important that we allow the process to run in the way that it is meant to. Most certainly, we will engage with the Department. It has already kindly provided us with the draft legislation from when this was last done, which was back in 2009. For the most part, it seems largely fit for purpose, but there are a few areas that we want to develop. However, we understand that, if we did so, we would be getting ahead of ourselves a little bit. I am sure that the Committee will want to examine the detail when it is available, and it is not yet available. That is the best way that I can answer that question.

Mr Stewart: That is good to know. Given how essential the legislation is for allowing opportunities to open up, do you agree that it is essential that we and the Department do all that we can to get it done before the end of the mandate in 2027?

Dr Donaldson: That is critical. You, as legislators, know better than I do that, if the legislation is not completed within the legislative timetable, it will go way into the future, because you do not know what will come at you in the next mandate. As I said, in Northern Ireland, not many bodies sit before you that bring in resource. That is what this legislative change will do: bring in resource from all the trust ports. It will grow our ability to put more into the pot. Like you, we think that this is a desperately important opportunity for the people of Northern Ireland. If we do not make the timescales — I know that there are a lot of pressures on the Minister and the Committee — we will miss that opportunity, and we just do not know for how long. This was last attempted in 2009, and our understanding is that it ran out of time. We really hope that that does not happen again. That is all that we can do. We are in your hands, the Minister's hands and the Assembly's hands on the matter.

Mr Stewart: I have one more area to cover, although that might stretch to two. One of the only good things about being the last region to make the change, given that this has already been done elsewhere in the UK, is that we can learn from what went well and of any little pitfalls. Is there anything that we can learn from the legislative change and reclassification in England and Scotland, or was that pretty plain sailing?

Dr Donaldson: If you do not mind, I will bring in Maurice again.

Mr Bullick: All the trust ports in Scotland were reclassified in 2015 under the Harbours (Scotland) Act 2015. Its legislative process is the same as that here. There was an explanatory memorandum. The same things applied. It was all to do with modernising the legislation, with a view to removing the ONS classification and enabling borrowing to allow greater investment. The same themes were there. The Port of Aberdeen and the other organisations were trust ports before, and they were trust ports after. The question about the sale of the port just did not apply. The constitutional arrangements are still determined by legislation, which means the involvement of the parliamentary body. It is a well-trodden process. There is nothing novel or contentious in what we are proposing. Of course, it is dependent on the ONS classification. The Harbours (Scotland) Act was enacted in December 2015, and it was much later in 2016 that the classification decision took place. That is an independent process, and we presume that the process here will follow the same path.

Mr Stewart: Finally, you talked about the anomaly of the safety aspect and the ability to compel. I think that you, Mr O'Neill, referred to how important that is, and I accept that safety is paramount. Talk to us about how the changes will open up even more safety options for the harbour in the control of ships and boats in the area.

Mr O'Neill: That is a specific piece of legislation. To give the wider context, the Department for Transport has a code called the port marine safety code — that name recently changed to the 'Ports & Marine Facilities Safety Code' — which is the strong guidance that all ports must adhere to in marine safety. We are obligated to have an annual independent audit for compliance against that, which we do, annually and rigorously. One of the findings that we have had for a number of years, which, I imagine, is the same for the other trust ports, is that we are unable to demonstrate full compliance with the code, because our respective harbour masters and organisations do not have the ability to compel and issue general instructions to marine traffic.

To clarify, if a specific vessel is behaving in a manner that we are not comfortable with or in an untoward manner, the harbour master can engage directly with that vessel, but the ability to compel is a wider power that can be used when the harbour master and his team wish to promote general legislation and directions on how vessels should behave in the entire harbour. That is missing from our capabilities today. It exists in all other GB ports. Through a slight quirk of legislation, it exists in the Port of Larne but not for the trust ports.

We hope that that is a non-contentious matter. The change would bring us into full compliance in that specific area with the port marine safety code and full alignment with all the other ports in NI, if I include Larne, and across GB.

Mr Stewart: OK. That is all from me. Thank you again for having us today and for your responses.

The Chairperson (Mrs Erskine): That is super. Thank you. Cathal?

Mr Boylan: Thanks, Chair. You bring us to all the nicest places.

The Chairperson (Mrs Erskine): I know. Infrastructure gets all the good gigs.

Mr Stewart: Do not get used to it, Cathal.

Mr Boylan: Thanks very much for the presentation. I remember the Committee's first visit here, way back in 2009. The ports could tell that there was a downturn in the economy at that time, with fewer building materials coming in and all that discussion.

I want to pick up on three points. Obviously, there is a responsibility on us for the legislation. For my sins, I have done a lot of it. A lot of conversations have gone on during this process. I am not saying that it is cut and dried, but there is stuff there already that we can work on. The sooner that we get to look at it, the better. We will thoroughly interrogate and scrutinise it, because that is the Committee's role.

I want to ask this simple question: what if the legislation does not pass? I am mindful that this session is being reported by Hansard and that the Minister, whose officials are here, is from my party. If the legislation does not move quickly, what would be the ramifications?

Dr Donaldson: In our presentation, we tried to show what the port is capable of, and we said that we would like to do more. We would certainly not do any more than we had set out; that is the first ramification. I will bring in my colleagues to respond, because this is an important question.

The port master plan, which you have not seen but which will be brought forward and will come before the Committee — it is very detailed and really exciting — is about maintaining the port into the future. We have inherited an amazing asset. When you look around this building, you see the investment that has gone into the area over centuries. It is what Belfast grew out of. We have a responsibility to maintain that and make sure that it lasts. The biggest responsibility that the Harbour Commissioners have is to secure this wonderful asset for future generations. Our ability to do that would be impeded. We know that there are issues. Joe mentioned Stormont Wharf. You are talking about £100 million to build a wharf. Our ability to ensure that Stormont Wharf has the capability that it will need for future generations will be impeded. That will be a huge disadvantage for the next generation. We will have had an opportunity to do something about that and will not have been able to do it. Not bringing forward the legislation in the timescale would have that impact on the port.

The other issue is innovation. Look at the innovation that is coming out of this place. We have the only berth on this island that is capable of offshore wind assembly. That is because of the ability to invest. We simply would not have that ability to be innovative. We would deliver what we have set out in our strategy, but the money simply would not be there for anything else. It would be a huge missed opportunity.

Joe, do you want to add anything?

Mr O'Neill: You have stated it all clearly, but I will add a couple of comments. There would be a substantial impact on the delivery of our master plan. It is hugely important that we make early year investments in our master plan for port capacity and to support the economy. If our investment plans were constrained, I would envisage our having to look very closely at them and curtail as much as we could in order to fund the master plan projects, including the Stormont Wharf rebuild in particular. A consequence of that is that we would not be able to do the other development projects, such as the residential areas, the logistics warehouse that I talked about and a new office scheme immediately across from this building for which we have planning consent and which we would like to deliver if the market opportunity existed. All that would have to wait in abeyance, because we would, correctly, prioritise investment in the master plan. However, even some of the early numbers that are coming out for what it may cost to deliver the master plan between 2030 and 2040 are very significant, as they clearly show that it would consume all our generated surplus each year.

Mr Boylan: As the chair mentioned, you have the capacity to build here and to deliver. That is important. We are crying out for NIW investment and everything else. We cannot grow the economy. There are a lot of opportunities. I have no qualms about that.

I have two other points. One is about the Shared Island Fund. Will you talk a wee bit more about that?

Dr Donaldson: It is a very exciting opportunity. We are working with the Port of Cork to see whether it is possible to avail ourselves of it. If we were successful, it would enhance the work that we are doing already at what we call D3, which is where we are building our new quay for cruise ships and floating offshore. It would enhance that project. If we were unsuccessful, it would not stop it, but we would be able to do more with it if we were successful.

The process of obtaining Shared Island funding is not easy. We have spoken to other institutions in the North that have availed themselves of it. Ulster University has been successful. We rely very heavily on Departments, particularly the Department for the Economy, which is leading on this and liaising with its counterparts in Dublin. We are hoping that we will succeed. If we do, we will have a much better product at the end of our D3 work: the €40 million or €50 million would be added to the £90 million, and we would have a much better landing base. The turbines are huge structures. They need a lot of reinforced land on which to be placed. That is the piece of the project that we would enhance.

Joe, I do not know whether you want to add to that.

Mr O'Neill: What we are proposing for the new quay is unique. We would be able to handle cruise and offshore wind. To be clear, offshore wind is floating offshore wind, which is anticipated to become the primary means of offshore wind generation from 2030 onwards for sites that are further off the coastline. Secondly, in our case, the new quay is for foundations for floating offshore wind, where we see the opportunity to create a combined use of the quay. Offshore wind projects are getting so big nowadays that developers are not comfortable with concentrating all their assembly and installation in one port; they usually look to spread it across two ports. We can see a clear opportunity with the Port of Cork, where we provide the support for delivery and the foundations for the large floating offshore wind farms. Cork will have the capacity through its investment to facilitate the other components, namely the towers, turbines and blades. We are asking for Shared Island funding because an upgrade of about £40 million or £50 million is necessary by 2030. We do not have the funds to do that. Secondly, it is a relatively early stage project in terms of its commerciality. No ports are really committing to supporting floating offshore wind at this early stage, so, if we and Cork could get some support from the Shared Island Fund, we could get early mover advantage and would be able to position ourselves collectively to respond to the floating offshore opportunity.

Mr Boylan: No doubt, you had that conversation when the Minister was here.

Mr O'Neill: Yes.

Mr Boylan: We are having a joint meeting with the Economy Committee, so we will have a conversation with some of our colleagues then.

Ms Natasha Sayee (Belfast Harbour Commissioners): May I come in, Cathal? Thank you. I just want to add that we have had strong support from the Infrastructure and Economy Ministers on the issue, as well as from both their predecessors. Their engagement with the Department of Transport in the South, which is leading on this, and with the Department of the Taoiseach has been very helpful. We also have broad support from the Executive Office, particularly through the North/South Ministerial Council, our colleagues in DFI, who are here today, and DFE, which is leading on this. The regions' officials and Ministers are behind us, so it is now just about getting through the administrative process and coming out the other side of what we hope will be a collaborative and game-changing funding opportunity for both ports.

Mr Boylan: Absolutely.

This is definitely my final question, Chair.

The Chairperson (Mrs Erskine): Very quickly, please.

Mr Boylan: It is not a part 2. I am keen on the tourism product. I know that this does not extend to the beautiful constituency of Newry and Armagh, but I hope that, at some point, it will. You mentioned 200,000. That is a big capacity, and it has fairly grown. I would like your views on the opportunities that that presents on an all-island basis. I am not saying that people should come to Armagh all the time, but maybe they could be encouraged to come the odd time.

Dr Donaldson: When cruise passengers come to the port, they travel. They do not all go to the Giant's Causeway, although, obviously, a lot of them do.

The Chairperson (Mrs Erskine): Come to Fermanagh. [Laughter.]

Mr Boylan: You have plenty of water over there, so they [Inaudible.]

Dr Donaldson: That is the thing. The cruise operators tell us that people love coming to Northern Ireland because we have so much to offer. When people are on a cruise, getting off the vessel and out and about is the big part of the offering, and we have so much to offer. Last year, we had contact with Tourism NI, and we will have further contact with one of the companies that come to Northern Ireland. We have ongoing contact with our officers, but Joe and I will have another meeting with Belfast City Council this year. Those sectors want to grow the offer. The vessels that come in want to see different offerings, because then people come back.

The other thing about cruises is that people use them to test an area out — you have probably done it yourselves — and then they go back and explore that area in more detail. Therefore, there is an opportunity when people come here, because Northern Ireland is a small place and everywhere in it can be travelled to. I will not say that you can go to Derry/Londonderry from Belfast, because Derry/Londonderry does not want to hear that; it wants the cruise ships to go to it, which, of course, they do. You can explore a lot of Northern Ireland by coming into Belfast, however, as long as the transport arrangements are in place. There is, therefore, work to do that you might want to look at on public transportation and on facilitating travel on it for people who visit through the port. The will is certainly there, however, and a lot of people who come in through the port go out and about. They go to Mount Stewart, for example, which is a beautiful and important place, or to any other stately home, such as Hillsborough Castle. They love to get out and about. I would think, therefore, that there are opportunities for Armagh and Fermanagh. They are beautiful parts of our lovely country, so why not? Facilitation and transportation are the issues.

Would you like to add anything, Joe?

Mr O'Neill: I will just say that it is a fantastic opportunity that, hopefully, will grow further as we cater for more so-called transit calls, meaning the cruises that come in in the morning and leave in the evening. Our particular focus is on the so-called turnaround cruises, whereby people embark on a cruise from here. They may spend a couple of nights in the city or the region beforehand, then do a seven- to 10-day cruise before returning and, hopefully, spending a few more days here.

Whilst we clearly facilitate the berthing of the cruise liners, we do not plan their excursions. Cruise companies do that with their contracted shore excursion company. There is always an opportunity for any region to present to those shore excursion companies and departments about their local opportunities. There are excursions that go, for example, to Fermanagh and to Armagh city. It is a matter of getting yourself [Inaudible.]

The Chairperson (Mrs Erskine): We are quickly going into the Department of the Economy's remit here.

Mr Boylan: No, I was just saying that it is part of the overall package.

The Chairperson (Mrs Erskine): I do not want to step on toes.

Mr Boylan: Obviously, it is about engagement with councils. That is fine, Chair. Thank you.

Dr Donaldson: Just through our comms, we are making sure that we get the information out.

Ms Sayee: We are in a partnership with Visit Belfast. It supports us, and we support it in marketing Northern Ireland as a cruise destination. That is proving to be very effective. We are also engaged in a collaborative partnership — maybe the chief executive can speak more about this — with Cruise Britain and with a cruise company in Ireland.

Dr Donaldson: It is over to you, Chair, whether you want to go down that road.

The Chairperson (Mrs Erskine): If you do not mind, I would like to try to bring it back to the trust ports, if that is OK. I appreciate the facts about the tourism. The issues are linked through investment, but I am keen to try and drill in more to the trust port aspect.

Keith, I am relying on you now.

Mr K Buchanan: No, do not rely on me. [Laughter.]

Mr Boylan: All the trust port questions have been asked, Keith.

Mr K Buchanan: I do not know if you have ever done a costing on a deepwater berth in Garrison, but we will leave that. [Laughter.]

The Chairperson (Mrs Erskine): It will come.

Mr K Buchanan: Forget Fermanagh tourism.

I want to go back briefly, if I may, Chair. The deepwater berth — I think that is the proper terminology — building is at £90 million, so what tipped the balance for you to have it for either wind or tourism? If I were saying to you, "You are going to build that", is the tourism element or the wind element more important for you? What is the balance? Is it 60:40 or 70:30? I am trying to get an understanding of why you are building it. Which is more important to you, and which will be the driver?

Dr Donaldson: I will start the answer to that, but my colleagues will add their perspectives. As a port, we actually do not make a huge amount from cruises. In a business case, that was one of the issues that was on the board table when we were looking at this. Cruises bring a huge amount to Northern Ireland. We have already talked about that — the number of visitors; the revenue; the revenue opportunity; and showcasing Northern Ireland. There are so many huge advantages for the Province, but, as a port, we do not make a huge amount of money out of them. Where income and a business case are concerned, the wind opportunity would outweigh that of the cruise. However, we recognised, and this is the important piece, that we are not a private-sector business. We are not public sector, but we belong to the people. What we wanted to do, and what we have struggled to do, is what is best for everybody, in a sense.

Having the quay/berth that will retain the cruises is important. We have a huge commercial opportunity moving into D1, which is on the down side of the port. D1 was the berth that was already capable of offshore wind assembly. When that project begins, cruise ships will not be able to come into that part of the port. Therefore, we recognise the need to move them, and that is where D3 comes in. We also recognise, however, the huge commercial opportunity for offshore wind, particularly for floating. The race to net zero is escalating, and you can see that already on the island. The facilities are very sparse, yet there is huge ambition to move in the energy transition that we are in and in the energy strategy that is coming from the Department for the Economy. There is huge ambition, but there are not a lot of facilities to deliver on that, so we wanted to ensure that we played our part. That is what we are doing, but there is a big commercial return. We are a commercial entity, and we have to make sure that we operate as a commercial entity. That is the responsibility that sits with the port. It was never an either/or, but the business case for wind definitely stacks up better than that for cruise.

Joe, do you want to come in on that?

Mr O'Neill: No, I think that you have it covered.

Mr K Buchanan: Joe, you touched on the two ports manufacturing the offshore wind, or assembling it — call it what you wish. What is the reason for that? Is it a space thing? Could you not do all that? Is it a hedged bet? What is the issue?

Mr O'Neill: There is a risk consideration for the developers, and you are absolutely right to say that the scale that is needed should be considered. We are talking about pieces that are upwards of 3,800 tons or 4,000 tons. The entry-level ask from a developer when they come to us is of the order of 70 to 80 acres just to handle the components on a single-port basis. A port would need to have well over 100 acres to do an entire wind farm. We do not have that in a contiguous site. Very few ports do, but, even if we had, I think that the developers would still look and say, "Better to spread our risk across two ports". We see our opportunity for floating to be in the foundations.

Mr K Buchanan: You mentioned offshore wind and tourism. Give me a breakdown of that. Where is tourism heading? You are going to build a new quay. At what level do you see tourism peaking, based on the fact that the port contributes £25 million annually to the local economy?

Dr Donaldson: For a start, we will re-examine that figure, because we are seeing a much bigger return from a smaller number of visits from cruise ships to the port.

Mr K Buchanan: From the smaller cruise ships?

Dr Donaldson: From a lower number of visits. We are therefore looking at that figure, because a lot more funding is already coming in through the cruise sector than has been recognised. Belfast city centre is really growing as a result of cruise visitors, and the city welcomes them. That is important, because not every city does so. The cruise operators are well aware of that.

Mr O'Neill: We have spoken about that before. We would love to grow the current 150 calls a year to 175 to 200 calls. Why do we put a limit on the number? There are two reasons. The first is the size of cruise vessels. We are all aware of how big they are getting. First, we can handle only one large cruise vessel at a time in the new berth. Secondly, the cruise season is not 12 months of the year. It generally runs from late March to late September or early October. There are therefore circa 200 days in a year on which a cruise ship comes into Belfast. Getting one into the berth every day is what our target is.

Mr K Buchanan: OK. I will move on to a different subject quickly. You may have heard Peter talk earlier about Belfast lough and its sewage issues. Do you treat any sewage on your property?

Mr O'Neill: None whatsoever.

Mr K Buchanan: All your waste therefore goes to NI Water. Joe, you mentioned building houses earlier. If you are to build houses, is the capacity there to do so, or, to put it bluntly, will you have to put your hand in your pocket to assist DFI?

Mr O'Neill: From an NI Water perspective, the capacity is there for us to connect, and in the Titanic Quarter in particular. Yes, we will have to upgrade one of our pumping stations in the Titanic Quarter in order to deal with the proposed housebuilding. That will mean an investment of somewhere in the order of £300,000 to £400,000, which we will make, because, I repeat, we manage, invest in and operate the sewerage network inside the estate. We have an upgrade to make to one of our pumping stations, but the work undertaken with NI Water around the time of master planning for the Titanic Quarter indicated that NI Water believes that it has the headroom in the area to accept what will come from our developments.

Mr K Buchanan: OK. Thank you.

Mr McMurray: Thank you for your presentation and for your hospitality. The history that we see around us is impressive.

I have one or two topics to raise. You said that 95% of seaborne trade coming into the island of Ireland arrives through Belfast harbour. Given that we are an island, that is not surprising. That trade will probably not go anywhere else.

You also mentioned renewables, as in the wind turbines that are being constructed. In that sector, how does the port, as an entity, contribute to using renewable energy and being sustainable? How does it contribute through wider construction? Does that trickle down to other ports and harbours to assist Northern Ireland as a whole? That is two questions in one. There will be another one after, Chair.

Dr Donaldson: We will all chip in on that one. At the beginning, I mentioned that we produced the first ESG strategy for ports. Sustainability at the port is hugely important. We have a lot of ongoing projects, one of which is being launched tomorrow. The Harlander is an autonomous vehicle with no emissions. That will be hugely important for sustainability and for the energy transition businesses that we have in the harbour. There are a significant number of them. In fact, we took some of them to meet a national group that the Minister of Agriculture, Environment and Rural Affairs chairs. I am afraid that I cannot remember what it is called. The Minister brought in all the national leads to meet some of our business community: companies such as CATAGEN and Catalyst, which are working on environmentally sustainable contributory projects, as well as being important businesses.

We are therefore doing a lot in the port on our emissions and sustainability. When you go out, you will see that we have oysters in the port to filter the water. We do not suggest that you eat them, mind you. We are trying different things — we have a really innovative sustainability officer — to ensure that we clean the water as much as we can and that we are as sustainable as we can be. Another project that we are looking at investing in, should we get funding from the Shared Island Fund, is shore power, which would allow vessels coming into the port to plug into the electricity system. It would be an ambitious and hugely costly project, but it would provide a much cleaner way for vessels to remain operational while in the port.

I will bring in Joe and Maurice. I am sure that they will talk about sustainability and answer your other question.

Mr O'Neill: I have a couple of metrics for you. As you have heard from the chair, we are really active in some areas. We have an ambition to be the first net zero port in the UK and Ireland for our direct emissions — for anyone who knows the subject, those are the scope 1 and scope 2 carbon emissions — and we are well on track to achieve that before 2030. Our emissions from our direct operations last year were about 1,100 tons equivalent, which is very low. In the sector, figures are benchmarked against what they were in 2015, and we have achieved a reduction of over 80%. Last year, the reduction was about 30%. We are therefore well on course to reduce further that residual 1,100 tons equivalent.

We are particularly active in another area. We aim to deliver each of our development projects, be they gardens, office product, logistics or studios, according to the highest-standard sustainability credentials that are available in the marketplace to use as measures: the building research establishment environmental assessment method (BREEAM) excellent standard. We are the only party that has delivered BREEAM excellent movie studios. We were the first to develop BREEAM excellent logistics warehousing on the island of Ireland. For every development project, we challenge ourselves by asking, "What is the highest baseline of sustainability that we can incorporate into our development?".

Ms Sayee: It may be a bit light-touch, but a good example of how ahead of the game we are is that, despite the construction work and the operational activity of the port, 'Springwatch', because of our blossoming kingfisher population and our stable and growing seal population, is filming here. From a biodiversity point of view, 'Springwatch' considers us to be an example of what is really good about Northern Ireland. The programme will be broadcast soon.

Dr Donaldson: The second part of your question was about how we have an impact on jobs. Is that about doing so through apprenticeships or through our contracts?

Mr McMurray: It was more general. It was about how, with the turbines, the port assists Northern Ireland in meeting its net zero targets. Is there a trickle-down effect to other maritime areas to ensure that things are done offshore?

Dr Donaldson: We work within the Department for the Economy's energy strategy, so it is important that we contribute, as other bodies do, but our offshore wind turbine product is unique to Belfast. Are you asking about employment?

Mr McMurray: Yes. Granted, we are talking about Belfast port, but does work from here transfer across to collaborative ports? I know that you cannot answer for them.

Dr Donaldson: For wind turbines, not at the moment, apart from the project with Cork port that we mentioned, which will involve shared work through the Shared Island Fund. That is not to say that such work will not happen in future. As I said, the opportunity for reclassification feeds into the ambition of all the trust ports and what they want to do. By size, Foyle is the next biggest port, and it may well have such ambition. It certainly has ambition to feed into energy transition in a major way, but I do not know what it would use its funding for. It will have to answer that question.

We are part of Northern Ireland Maritime and Offshore (NIMO), a body that Invest NI has set up.

We feed into NIMO. A network of businesses is looking at the opportunities, because there are so many in energy transition. We mentioned warehousing and wind turbines, but there are many others. There is the operation and maintenance of the wind farms after they are constructed. There are storage facilities. There are many other parts to that industry, of which we are one part. We feed into that network, which, as I said, Invest NI established.

Mr McMurray: Thank you very much. That is very interesting.

On the trust ports classification, you said that Belfast harbour is independent but that it implements Programme for Government policies and that it is not private but not public either. I read through the report, in which you mention the harbour masters' power to direct, and I get that, but there is also a government power to direct. I understand the accounting change from a financial point of view, but where will oversight sit after reclassification, given all that you said about the harbour's being not private but not public? I am trying to marry all the elements.

Dr Donaldson: I know. It is complex. The important point to make is that the Minister will still appoint the chair, and a deputy chair is mentioned, and there are four councillors who sit on the Belfast Harbour Commissioners' board, so I do not think that the level of scrutiny and accountability will change. I am appointed by the Minister and am appraised by the Department. If any issues arise in the body with which the Minister and the Department are not content, there is already a mechanism in place for them to raise their concern and to take control, if necessary. Personally, I do not think that that is a diminution.

It is about striking a balance. This is one of the points that you will consider when you scrutinise the legislation. To get the ONS reclassification, there has to be a balance struck between the level of control exercised by government and the level of independence. That balance to be struck is the critical piece of the reclassification. The ONS will make its determination. It is therefore about getting that balance right. The legislation states that the board will recruit the board members, albeit the Minister will make the appointments that I mentioned. That will be done in the same way as for any recruitment exercise, and the Office of the Commissioner for Public Appointments for Northern Ireland (OCPANI) will also be involved. The body will therefore not be cast adrift. There is, however, a balance to be struck, and departmental officials and the Committee will look at how to achieve that challenging balance through the legislative scrutiny process. When the ONS becomes involved, after the legislation is enacted, it will be about trying to ensure that the balance is such that it reclassifies the body, and that is a difficult one to achieve.

The Chairperson (Mrs Erskine): Thank you. You will be glad to hear that we are coming to the end of our questioning. Do the proposed legislative changes go far enough? I know that we do not have the legislation in front of us, but will it go far enough, or are there any opportunities for it to go further in order to align with your future aspirations and goals?

Dr Donaldson: I am not aware of any. The Department has tried to align the process as much as possible with the 2009 process to enable it to meet the legislative timetable. I do not need to tell the people around the table that drafting legislation is not easy. To start from scratch would have made the process, which is already challenging, much more difficult. Indeed, we have talked about that during the evidence session. Had the legislation started from a zero base, it would have been impossible to get it through in this mandate. Nothing has therefore been drawn to my attention. We would like that change to be made, if only that. Joe, do you want to add anything?

Mr O'Neill: There is nothing in the consultation as presented that constrains us through not going far enough, so we are very happy with it. The final piece will be the legislation. We need to make sure that there is nothing in it that inadvertently constrains us. We await the legislation, but, based on the stages of the process so far and the consultation, we are very happy that our full ambition has been recognised and reflected in the proposed changes.

The Chairperson (Mrs Erskine): I appreciate that. We will do the same. We will scrutinise the legislation and check that there are no unintended consequences from it. That is the Committee's aim. We are a scrutiny body, so that is what we are here to do. Yes, that scrutiny will take time, and there is a process to be gone through, but let us hope that we will be in a position by the end of this mandate to have legislation that can be implemented this time. I know that an awful lot of work is going on.

We appreciate your time and your evidence today, which has been really useful. No doubt when the legislation comes forward, we will have further discussions with you, other trust ports and other ports across Northern Ireland. Thank you very much.

Dr Donaldson: Thank you, Chair and Committee members, for all your support.