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One size doesn't fit all

Posted by Richard Monday, December 13, 2004

Where are the Europhiles storming in to justify this latest bit of lunacy? Silent as always they are, when there is a real problem with their beloved construct.

This one, the ports directive, has been hanging around for a while, having been first introduced in 2001 and "torpedoed" by the EU parliament in November 2003. Now, it has re-emerged with a vengeance and its the subject of a report in today's Daily Telegraph.

Actually, the new proposal was made on 13 October by the commission - and was one of the last acts of the outgoing commissioner for transport, President Loyola de Palacio, who had been trying for some years to get her "market access to port services" legislation on to the law books.

Like all community initiatives, it is dressed up in high-flown language, set out in the aims. The proposed directive thus "aims at boosting the competitiveness of EU ports and contributing to reduce congestion and environmental pollution by promoting inter alia maritime transport." De Palacio, in the leaden language of her ilk wants to create a "clear and transparent framework" for port services.

So what is it all about? In essence, the directive seeks to impose rules governing the right to provide cargo handling services within a port, licensing operators to provide such services to as yet undefined "competent authorities" for limited periods. Licences would be for a maximum of eight years where no investment is required; 12 years where the licensee invested in "movable assets" such as fork-lift trucks; and 30 years where it paid for "immovable assets" such as new warehouses.

It sounds like a good idea in principle – as they so often do – but then listen to David Ord, managing director of Bristol Port Company. He calls of Palacio's "last act of retribution", condemning it as "simply bureaucratic", doing nothing to improve the competitiveness of UK plc.

He is not wrong. The point as issue is that the directive makes partial sense on the continent, where the big ports are state-owned, run by comfortable cartels which can set their own charges and conditions, seeing off competitors and stifling free-enterprise and innovation.

What the commission is trying to achieve is "intra-port competition" (competition between providers of a same port service within a port), whereas, in the UK, the industry is structured differently.

We have already gone through our denationalisation and have a network of private ports, such as Mersey Docks, Associated British Ports and Hutchison (the owner of Felixstowe), which compete with each other for business. And with that larger network of ports, there is healthy competition already, between ports.

John Dempster, director of the UK Major Ports Group, which represents the big port companies, said the new directive could force a port such as Felixstowe or Bristol to split off its cargo-handling activities and periodically put them up for tender. This, he says, could "lead to a situation where the existing operator was forced out," he said.

According to The Telegraph, he also questions which "competent authority" would award licences, believing the process could become bogged down at the Office of Fair Trading. David Ord says that, as the owner of the port, it wis "outrageous" that "assets I am buying today, I would potentially lose control and ownership of".

He adds that no industry could allow this, even if the EU did envisage some form of compensation. "If I build a factory and I kit it and I employ the people who are working in it, are you telling me it's fair that after 30 years someone else can come through and claim it? It's like a Soviet economy," he says.

Dempster is equally forthright, stating that the EU is trying to address the problem in continental ports where it is alleged there are cosy cartels operating services. “The trouble is it's 'one size fits all' and we are the innocent victims in the cross-fire," he declares.

And there you have it. So often do we meet this situation, where the UK is the odd man out, but we have to go along with the flow, just because the "colleagues" need to deal with their own problems. How longs is it, one wonders, before the penny drops and our political masters realise that the UK simply does not belong in a political construct designed for the very different circumstances of a continental economy and society?