`Brutally tough' scene faces Dublin as hub for shipping

Just as Dublin surprised itself by becoming an international financial centre, so Ireland could become a hub for shipping and maritime services. That is the view of Mr Padraic White, former IDA Ireland chief and chair of one of several Government advisory groups.

However, this will hinge on a competitive package of tax and fiscal incentives, and the availability of skilled staff, according to Mr White. Several EU member states have already taken steps in this direction, including Germany, Holland and Britain, and there should be no illusion about the fact that the competition will be "brutally tough".

Mr White was appointed last year by former marine minister, Dr Michael Woods, to chair an advisory group to the new Irish Maritime Development Office (IMDO). A man with a busy "directorship/chair" schedule that ranges from Lite FM radio to Dresdner Bank to the Dublin Light Rail Advisory and Action Group, Mr White has accepted several responsibilities in the marine sector - he is also chair of the Government's review group on the EU Common Fisheries Policy (CFP).

The IMDO was established by Dr Woods in 1999 to promote the expansion of Irish-based shipping and related services - the IMDO advisory group is a back-up to it in terms of influencing national policy.

"For the first time, there is an organisation with a mandate and a real interest in drawing up shipping service proposals," Mr White points out. As he told members of the Irish Maritime Law Association in Dublin last month, there is "a patron, a sponsor, a champion to advance shipping development" here.

He is under no illusion about the challenge. The sorry saga of Irish Shipping is still within public memory. Despite rapid advances in sea-borne trade globally - projected to double in the next 15 years - the number of ships on the Irish register has fallen by one-third, from 75 to under 50, over the past decade.

Employment in the industry dropped by half, to 1,200, within the same timeframe. The EU as a whole has been losing out in world shipping stakes.

In 1975, 35 per cent of world trade was carried under EU member state flags, but this share has declined dramatically to just 12 per cent - even though 30 per cent of the world fleet is owned, or financially controlled, by EU-based companies.

For strategic reasons, the EU now wishes to boost both Community flag fleets and employment of European seafarers, Mr White notes, and the State aid and fiscal regime permitted by Brussels is quite generous.

It is against this background that Dr Woods set up the IMDO, as part of the Marine Institute, and also initiated plans for a new maritime college which is to be run by the Naval Service and Cork Institute of Technology at Ringaskiddy in Cork harbour. Supported by the Minister for Education, Mr Martin, it will train both mercantile and naval personnel.

Mr White pays tribute to the "torchbearers" - the Irish Institute of Master Mariners, led by Capt Kevin Cribben, who drew up a plan four years ago to develop Ireland as an international centre for maritime business.

Reported in this newspaper at the time, the concept had attracted IDA Ireland support, which funded an initial study. A more detailed analysis was carried out by Deloitte and Touche, in association with Mr Brian Kerr of the Irish Chamber of Shipping.

Within the past 12 months, the IMDO has been established, with an office in Marine Institute headquarters in Dublin, and the post of director has been advertised. The IMDO advisory group, comprising 17 members drawn from the public and private sectors, has drawn up a three-year business plan, and has commissioned Ernst and Young to evaluate the international competition, and make recommendations on specific administrative changes and incentives.

One of its tasks is to identify key components of a package which will promote Ireland as a competitive base for companies, in areas such as ship management, financial and legal services and insurance.

It is also charged with reviewing the existing system of ship registration and making it more "user friendly". The initial report is due to be presented this month and a final report will be completed by the end of July.

Despite the competition, there is a keen demand for such a base. "One stop shops" for transportation are becoming increasingly attractive, according to Mr Rohan J Abeywickrema, international vice-president of the Chartered Institute of Transport, who addressed the Chartered Institute of Transport in Ireland in Dublin last month.

He described how the past decade had been a turbulent one for the shipping industry, with market fragmentation, undifferentiated services, declining freight rates and poor financial performance pushing liner shipping companies into a spiral of slim operating margins and reduced shareholder value - in spite of a growth in cargo volume and extensive cost reduction efforts.

To stay competitive, companies had begun merging, building larger and faster ships, pressing for better port facilities and for "one stop shipping", he said.

The new Minister for the Marine and Natural Resources, Mr Fahey, has met the IMDO advisory group, and has given it his full commitment. Mr White says the group now intends to seek the support of the Minister for Finance in relation to tax and fiscal changes. Such incentives could be signalled in the December Budget and incorporated in the 2001 Finance Act, he suggests. If the group fails to secure this commitment, the mission will be "in jeopardy," he warns.

The precedent of the International Financial Services Centre (IFSC) in Dublin provides a good model, he says. "As in the case of the IFSC, it will be necessary to seek the correct balance between user-friendly promotion in parallel with standards which ensure our international credibility as a well-regulated location, and not a haven for "brass plate" operations.

"We have much in our favour," Mr White adds. The IDA has put Ireland on the map in terms of international investment, and the IFSC has attracted the world's leading financial institutions - many of which could take on specialist shipping services, given the right conditions.