Chairperson's Statement

Trade and Financial Review

There is certainly no doubt but that 2020 was a difficult if not traumatic year for Ireland – both for society as a whole and for the economy. As the Covid-19 pandemic took hold and the country faced into the first lockdown period in April and May, trade volumes through Dublin Port plummeted. As a result, the Company revised its Budget expectations for 2020 downwards from anticipated volume growth of 4% for the year to a possible decline of 23%.

The importance of Dublin Port to Ireland’s open economy and our ability to facilitate trade was particularly evident throughout 2020. Notwithstanding the challenges of Covid-19 and the compounding challenges of Brexit, the volume decline was ultimately far less than feared and throughput for the year amounted to 36.9m tonnes representing a 3.3% decrease on 2019 (38.1m tonnes). Volumes fluctuated unpredictably during the year from quarter to quarter:

• The first quarter of 2020 was slow (4.9%) by comparison to a strong first quarter in 2019 which had been driven by Brexit stockpiling in advance of the original Brexit date of 31st March 2019
• The second quarter of 2020 was very difficult (17.0%) because of the pandemic with very large reductions in volumes in April (26.2%) and May (20.5%)
• However, volumes recovered in the third quarter with growth of +1.1%
• The year ended with a very strong fourth quarter (+7.6%) driven by the second and final round of Brexit stockpiling. Within the fourth quarter, volumes in December alone were ahead by +21.7%

In overall terms the unitised trade (Ro-Ro and Lo-Lo combined) was just 2% lower than in 2019 while the bulk modes were 9.8% lower than the previous year.

Within the bulk modes, bulk solids performed quite strongly recording growth in the year of 7.6% while the bulk liquid sector recorded a decline of 17%. The decline in bulk liquid represents over 62% of the overall decline for the year and reflects the lower level of fuel imports as a result of lower economic activity and in particular the low levels of activity at Dublin Airport.

The robust performance in throughput terms was matched by a strong financial performance. While the lower throughput volumes resulted in lower revenue levels, we were in a position to reduce our operating costs such that Operating Profit and EBITDA were maintained at 2019 levels.

The main highlights in this regard were as follows:

• Turnover decreased by 6.6% from €92.7m to €86.6m
• Operating costs decreased by 11.1% from €48.5m to €43.1m
• Operating Profit maintained at €44.2m
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) maintained at €53.9m
• Profit for the Financial Year decreased by 11.4% from €38.6m to €34.2m

Masterplan 2040 – Reviewed 2018

Dublin Port Company’s raison d’etre is to provide the port infrastructure needed to facilitate international trade in goods. With this in mind the Board is focussed on ensuring the timely delivery of port capacity to meet the economic needs of the country over the long term.

The Company’s Masterplan 2040 – Reviewed 2018 presents a vision for the future development of the Port and critically examines how the existing land use at Dublin Port can be optimised.

The Masterplan has been prepared by DPC in order to:

• Plan for future sustainable growth and changes in facilitating seaborne trade in goods and passenger movements to and from Ireland and the Dublin region in particular,
• Provide an overall context for future investment decisions,
• Reflect and provide for current national and regional policies, local guidelines and initiatives,
• Ensure there is harmony and synergy between the plans for the Port and those for the Dublin Docklands Area, Dublin City and neighbouring counties within the Greater Dublin Area,
• Give certainty to customers about how the Port will develop in the future to meet their requirements.

The Masterplan, which was prepared following extensive engagement with stakeholders, also outlines how DPC will work to better integrate the Port with the City and people of Dublin.

Alexandra Basin Redevelopment Project

During 2020 we continued to progress implementation of the first of the three Strategic Infrastructure Development (SID) projects needed to deliver the full vision of the Masterplan – the Alexandra Basin Redevelopment (ABR) Project.

In addition to providing additional cargo handling capacity, the ABR Project contributes to the future proofing of port facilities through the accommodation of larger sized vessels both in terms of length and draft of vessels.

The developments include the deepening and extension of existing quay walls, the provision of a new 250 metres long Ro-Ro jetty together with two new Ro-Ro berths within the inner basin, infill of the basin at berths 52/53, the construction of a new river berth and dredging of the navigational channel to a depth of 10m below chart datum.

During the year, the Company decided not to progress with the redevelopment of North Wall Quay Extension as part of the ABR Project to provide berths for the largest cruise ships following a public consultation process which culminated in the publication of the Cruise Consultation report in April 2020.

MP2 Project

In July 2020, An Bord Pleanála granted a 15 year planning permission for the MP2 Project, the second of the three SIDs required to deliver Masterplan 2040.

This permission will allow the construction of two berths with an overall length of 545 metres for Lo Lo container ships and two berths with a combined length of 572 metres for Ro-Ro ferries. The project will include the redevelopment of one of the existing oil jetties to provide an additional berth for container ships as and when the demand for fossil fuels permanently reduces in response to national climate change policies.

The MP2 Project also provides for the development of a heritage zone overlooking Dublin Bay at the eastern end of Dublin Port as the termination point for the 3.2 kilometre cycle and pedestrian greenway to be built along the northern fringe of the port overlooking the Tolka Estuary. These environmental measures are an integral part of MP2 as approved by An Bord Pleanála. Construction of this greenway will start this year.

Works envisaged under the MP2 Project are currently being planned and construction on the first elements is expected to commence in 2022.

Between the ABR Project, which is under construction, and the MP2 Project, Dublin Port Company has now secured all of the planning permissions required for the major development works planned on the northern side of the Port under Masterplan 2040.

3FM Project

The third and final Masterplan Project – the 3FM Project - involves the development of port lands on the Poolbeg Peninsula and the construction of a new bridge across the Liffey to provide a Southern Port Access Route for port-related HGV Traffic. The 3FM Project will also contribute significantly to the provision of public transport and active transport options in the vicinity of Dublin Port and across the Liffey and into the Poolbeg Peninsula. The Company will commence pre-application consultation with An Bord Pleanála for the 3FM Project during 2021.

Dublin Port Post 2040 Dialogue

While Dublin Port Company continues to develop Dublin Port over the remaining 20 years of its Masterplan, we also need to plan for how, when and where additional port capacity might be provided on the east coast of Ireland by 2040 should growth continue in the coming decades at the levels we have seen over the past 70 years and more.

We know from experience that twenty years is a relatively short period of time in the context of delivering large scale infrastructure projects and it is vital, therefore, that we begin to plan now, so that long-term development of essential port infrastructure can continue to take place in a timely, sustainable fashion.

It is in the context of addressing these long term planning requirements that the Company published a series of seven papers as part of the Dublin Port Post 2040 Dialogue during the year to ensure we have early and comprehensive consultation on this nationally important issue. Long-term planning of large infrastructure is very challenging and cannot start too early.

Through the papers, the Company has sought to explain and contextualise the challenges ahead in planning the long-term delivery of port capacity to meet future demand on the east coast of Ireland by 2040, or sooner.

The views expressed in the papers are based on the implicit acceptance of the development path set out in Masterplan 2040 to continue to develop Dublin Port where it is until it reaches its full target capacity of 77 million gross tonnes per annum and to continue to operate this capacity long after 2040.

The concluding paper on “Options for the greenfield development of additional east coast port capacity” sets out the nature and scale of the development challenge if the targets of Masterplan 2040 are not attained and if additional capacity is not provided in other east coast ports, assuming current growth projections come to pass.

This would mean building a new port at a greenfield site on the east coast of Ireland ready for operation in just 20 years’ time by 2040. We estimate that a new port, referred to as DP1.5, would cost in the region of €3.9 billion – €4.2 billion to construct (at 2020 prices), assuming the considerable challenges of financing and securing the necessary consents to deliver a project of this magnitude, could even be achieved.

In analysing the issues covered by the papers, the Company has reached six key conclusions:

1. Dublin Port Company must complete all of the projects outlined in Masterplan 2040 to deliver infrastructure with an annual throughput capacity of 77 million gross tonnes by 2040.
2. Critically, this will require planning permission to be secured for the third and final Masterplan Project, known as the 3FM Project.
3. The achievement of a throughput of 77 million gross tonnes per annum by 2040 will require not only the completion of all of the infrastructure projects in Masterplan 2040; it will also require that the efficiency of port operations greatly increases so that port infrastructure is utilised to its maximum. This will require the elimination of systemic inefficiencies in existing supply chain operations.
4. Over the next 20 years, additional capacity at other existing east coast ports will be required so that, as Dublin Port approaches its ultimate capacity, volumes which Dublin cannot handle can be accommodated elsewhere.
5. During these 20 years, Dublin Port Company will need to work on the DP1.5 project so that it can be brought through the planning process and construction started by about 2033 should that become necessary.
6. The projects to provide additional capacity in other ports and the project to construct DP1.5 can only be realised with State support – none of the projects and none of the port companies (including Dublin Port Company) are capable of raising the project finance that would be required.

Underpinning the views expressed in the papers is more than a decade’s worth of knowledge, expertise, scientific and environmental data acquired within the Company through the delivery of major infrastructure projects in Dublin Port.

However, we recognise that alternative viewpoints exist including a long-held view that Dublin Port should be moved from its current location.

The purpose, therefore, of publishing the Dublin Port Post 2040 Dialogue papers is to initiate and facilitate informed discussion and substantive engagement on key questions that require answers at this pivotal moment, namely:

• What level of port capacity will have to be provided to meet future demand on the east coast of Ireland over the next 20 years?
• Where will this additional capacity be provided?
• How will the projects needed to deliver this additional capacity be financed and delivered?

Open to anyone with an interest in the long-term planning and development of both the Port and the City, we have invited those who wish to challenge the Company’s thinking and development path to date to respond and share their thoughts so that informed decisions can be taken on the future development of port infrastructure both in Dublin Port and elsewhere on the east coast compatible with relevant plans and strategies within the national planning hierarchy

Conclusion

I would like to thank the management team and all the staff of Dublin Port Company for their continued commitment over the course of what has been a particularly challenging year. The manner in which everybody adapted to the circumstances imposed by Covid-19 has been exemplary. In particular, I would like to thank the CEO, Eamonn O’Reilly and acknowledge his skilled leadership and the professional manner in which he continues to steer the Company.

In what has been a particularly difficult year for the transport sector as a whole, I would like to thank our customers and all our stakeholders for their continued support.

I wish to thank the Minister and the dedicated staff at the Department of Transport for their active engagement with us over the course of 2020.

Finally, I wish to thank my colleagues on the Board for their work over the past year. In particular I would like to acknowledge the contributions of Ms. Lesley Williams and Ms. Helen Collins whose terms of office as Directors have recently concluded.

Jerry Grant, Chairperson

26^th March 2021