THE PRESS FRIDAY, DECEMBER 16, 1988. Ports: the sneaky sell-out

Press, 16 December 1988, Page 12

THE PRESS FRIDAY, DECEMBER 16, 1988. Ports: the sneaky sell-out

In spite of the Government’s many assurances to the contrary, the public seems destined to lose control of the ports and harbours that serve the country. The Minister of Transport, Mr Jeffries, said on Monday that the Government would consider removing the ' requirement that local authorities should hold, on behalf of the public, at least 51 per cent of the shares in the companies the Government created to manage the country’s 11 principal ports. This is an extreme departure from the principles announced by the Government when it embarked on port reform. It flies in the face of undertakings given by Mr Jeffries himself, and it tends to confirm the fears expressed by port unions and the Harbours’ Association 20 months ago that the Government had a hidden agenda to privatise the ports all along. The ports were an early target of the Government’s reforming zeal when Labour took power in 1984. The Ports Industry Review Authority was charged with devising a blueprint for reform. This authority, a 10member panel representing harbour boards, port users, the Waterfront Industry Commission, and port unions, was chaired by no less a person than the then Undersecretary for Transport, Mr Jeffries, himself. The authority presented its report and some of its recommendations have been adopted in the programme of port reform. Central to the authority’s findings was one conclusion: the authority was “firmly in favour of retaining elected harbour boards as the cornerstone of port administration.” In May last year, as the Government began to flesh out the proposals for port reform that were to become part of its election manifesto, unease was expressed from diverse sources, including the Harbour Workers’ Union and the Harbours’ Association, about where control of the country’s ports eventually would lie. The national secretary of the Harbour Workers’ Union,' Mr Ross Wilson, went so far as to say that the moves were a first step to privatising the ports. He claimed to have reliable information that there was a second stage to the Government’s intentions, hidden from the public, that would abolish harbour boards and sell control of the ports to private hands. In response to this, Mr Jeffries, still Under-Secretary for Transport, told a meeting of the Chartered Institute of Transport in June, 1987, that “the public sector will maintain a majority shareholding” in the port companies. At that stage, the Government was prepared to force the harbour boards to hand over 50 per cent of the shareholding to local authorities whose territorial authorities are served by the respective ports; the teritoical with rities then could sell their 50 per cent to the highest bidder. By the time the reform bill reached Parliament, the outcry from harbour boards and port users had obliged the Government to abandon this notion.

> After the 1987 General Election Mr Jeffries became Minister of Transport and the Port Companies Bill became his responsibility. The law that came from this specifies that the articles of association of each port company must provide for a class of shares that carry 51 per cent of the voting

rights at any general meeting of the company, and that these shares must be held by an elected local authority. The Government policy behind this bald requirement was described by Mr Jeffries as enabling the harbour boards to hold 100 per cent of the ownership of port companies at the outset although they would •be “encouraged” to sell up to 49 per cent of that shareholding. The public control over the management of the ports was put beyond question, however, and the law was passed by Parliament on that basis.

Mr Jeffries now says that “serious questions” have arisen about the ability of local authorities to perform their roles after the reorganisation of local government. If that is so, either local government reform is sadly astray or the port reform policy is. In any event, the comment is a curious one from a Minister who said only weeks ago, when the first of the port companies came into being, that any criticism of the long time taken for reform was unfair because the matter was too important to get wrong for the sake of a little more time. If the Government has not got it right even now, obviously a little more time should have been spent on the proposals — unless, of course, it always was intended to kill off the public’s control and the local body shareholding was merely a convenient red herring to prevent public revolt against the proposed reforms.

The Government’s enthusiasm for selling public assets plainly extends to the ports. Mr Jeffries says that several private sector groups are interested in acquiring “large shareholdings” in the port companies, and well they might be. The costs of the reform, and the costs of associated redundancies among port workers, will have been met from the harbour purse and levies on publicly owned land; completely private port companies, freed from the direction of an elected harbour board with a majority shareholding, can function regardless of the needs of the hinterlands, the regions, and the people for whom port services are an essential part of the local transport structure. The ports could end up in the hands of overseas shipping companies. Mr Jeffries and other Cabinet Ministers have argued that the port reforms would “improve accountability and transparency” in the management of the ports. This was always a debatable proposition; it would be a nullity if the management of the ports passes completely into private hands and the public can no longer rely on the Official Information Act and the Audit Office to learn what is going on. Mr Jeffries’ retraction of the policy presented to the public at the last election will rekindle fears that control of the ports could wind up in the hands of a few corporations, or that shipping companies might engage in take-overs, buying up majority interests in some ports simply to close them down to improve cargo flows and profitability at other ports. Such occurrences might seem inprobable; but Ministerial statements once made it seem improbable that the public could lose control of port companies.