Committee for Infrastructure

OFFICIAL REPORT (Hansard)

Brexit and Current Issues: Northern Ireland Port Representatives

1 July 2020 NORTHERN IRELAND ASSEMBLY

Committee for Infrastructure

Brexit and Current Issues: Northern Ireland Port Representatives

1 July 2020

Members present for all or part of the proceedings: Miss Michelle McIlveen (Chairperson) Mr David Hilditch (Deputy Chairperson) Ms Martina Anderson Mr Roy Beggs Mr Cathal Boylan Mr Keith Buchanan Ms Liz Kimmins Mr Andrew Muir

Witnesses: Mr Maurice Bullick Belfast Harbour Commissioners Mr Brian McGrath Londonderry Port and Harbour Mr Roger Armson Port of Larne Mr David Holmes Warrenpoint Port

The Chairperson (Miss McIlveen): I welcome Roger Armson, general manager and director of the Port of Larne; Mr Maurice Bullick, the finance and compliance director at Belfast Harbour Commissioners; David Holmes, the chief executive officer of Warrenpoint Port; and Brian McGrath, chief executive of Londonderry Port and Harbour Commissioners or Foyle Port, as it is also known. Gentlemen, you are all welcome to today's meeting. In normal times, we would have met already and would probably have visited each of your facilities and had lengthy and detailed conversations, but, due to the circumstances, we have our meeting set up in this way to allow for social distancing.

If you are content, I will ask each of you in alphabetical order to speak for around five minutes. Members will ask questions, and each of you can answer if you want to contribute to a response. Maurice, you can start off, and we will follow up with Foyle, Larne and Warrenpoint.

Mr Maurice Bullick (Belfast Harbour Commissioners): Thank you, Chair and Committee members, for the invitation to today's meeting. We have a relatively short briefing for you that I have put on one piece of paper. I will go through the briefing paper and add some explanations and illustrations to explain our rationale.

Just to set the scene, you will be aware that the Belfast Harbour Commissioners is a trust port. It is the largest port in Northern Ireland and the second largest on the island of Ireland. It handles about 70% of Northern Ireland's seaborne trade by way of cargo tonnage. Those figures move up and down slightly each year, but that is roughly the steady state. The significant thing for us on the Northern Ireland protocol is that about 70% of the traffic is directed to and from the island of Great Britain to Northern Ireland, so that, obviously, dominates our traffic. That 70% is the overall figure, and it

1 includes cargo going both ways: from Northern Ireland and into Northern Ireland. When you break that down into the export and import leg, you see that it has a slightly different pattern, with 85% of the export side going directly to the island of Great Britain and 60% on the import side. The reason the import side is a good bit lower is that, as well as bringing cargoes from Great Britain, we bring them from the European Union, but, actually, we do more cargo with the rest of the world, so a lot of the import cargoes are bulk cargoes that come from elsewhere in the world. The 85% out represents the markets of Great Britain.

Obviously, some traffic goes through Great Britain to the European Union, and some traffic comes back through Northern Ireland to the Republic of Ireland, but we have never been able to get definite metrics on that. We have some anecdotal figures from carriers, but it tends to be very low percentages. Our conclusion is that the predominant amount of that traffic is staying in Northern Ireland at the overall level, albeit that the border does not really exist for trade flows, because, historically, some cargoes come in here and go south of the border and some cargoes come through Dublin, but there is not really a properly validated data source to put hard numbers on that.

That gives you a summary of the overall position. Probably the greatest concern for us is freight ferry traffic. Obviously, all ports operate in different cargo modes. We have three principle cargo modes in the Port of Belfast. There is bulk traffic, which is things like oil, animal feeds and coal. We have container traffic, almost all of which is routed through Europe, albeit that most of it belongs elsewhere in the world, and, finally, freight ferry or roll-on roll-off traffic. Freight ferry traffic is about 50% overall, and that is 100% of our traffic flow. I imagine that, when my colleagues speak, they will mention that as well.

The 550,000 freight movements each way with Great Britain is our primary concern from the port operation perspective. Obviously, if we had one aspiration coming out of the process, it would be to preserve the free-flowing nature of traffic between Northern Ireland and Great Britain insofar as is possible given the constraints that will apply from 1 January 2021. I mentioned in my paper that the figure for all of the ports and freight ferries is 850,000 freight units: that is a lot. To illustrate that, the Port of Dover, for example, does 2·6 million freight units, so the amount of freight traffic moving from Great Britain to Northern Ireland is very substantial, I suggest.

I want to go into more specifics on what we are doing around the level of preparedness or 1 January. Currently, the position is that the Port of Belfast is engaging directly and quite extensively with both the Department of Agriculture, Environment and Rural Affairs and HMRC. The position on that is that we are basically working with DAERA on a point-of-entry facility in the Port of Belfast, and it is important to note that that will represent an expansion of the previously existing point-of-entry process. There is already an inspection facility in the Port of Belfast for dealing with things like sanitary and phytosanitary (SPS) measures, which are referred to in various things, in products of animal origin. Those are for the food-type industry, and it is probably easier to refer to that as "agri-food". The Port of Belfast already has the facility to do that, but that facility needs to be expanded to cater for the effect of the Northern Ireland protocol. We are well advanced with DAERA on an in-principle agreement on how that point-of-entry facility will be structured and how it will operate. The second agency that we are dealing with is HMRC. We are engaged with HMRC because we know, at the moment, that there will certainly be processes to take into account in coming into Northern Ireland from Great Britain.

Probably the biggest uncertainty for us at the moment comes from the fact that the Northern Ireland protocol exists and the United Kingdom Government have issued the command paper on Northern Ireland on 26 May or thereabouts. Subsequent to that date, government agencies have been able to ramp up their engagement with us in getting a level of preparedness. We note that the command paper is not agreed in the current form with the European Union, so that obviously represents something of an uncertainty in the current circumstances. That is a notable point for the Committee, because, obviously, from a port operations perspective, we would like to get as much certainty as possible. That said, we are still well advanced on the work with HMRC. The other significant point is that Brexit has been going on for a while. We have all attended lots of stakeholder events held by government bodies. Obviously, the port has an important function in Brexit, but the focus of the impact will not be the port; it will be elsewhere. On the government side, it will be the requirement for HMRC and DAERA to run their processes. On the commercial side, the emphasis and onus will be more on ferry operators, hauliers, the owners of cargo — traders — and, finally, their various intermediaries. The port, inside its business model, has a role to play in facilitating DAERA with a new and expanded point of entry, but it does not engage directly in any cargo operations or handling or in the pre-existing customs processes. About 18% of our traffic through the port is already non-EU, so there is a body of expertise in the port among shipping agents, but those are the intermediaries.

2 My final point is that, over the years, many of the conversations with government bodies have started with the port, but then, as officials and others delve into the matter in more depth, the focus of attention pivots fairly quickly towards where the real impact will be, which is on ferries, traders and hauliers.

That concludes my remarks. Thank you, Chair and Committee members.

Mr Brian McGrath (Londonderry Port and Harbour): Good morning, Chair and members of the Committee. Thank you for your invitation. I speak on behalf of Foyle Port and the Londonderry Port and Harbour Commissioners. I provided a briefing paper that Committee members should have. I do not intend to go through that line by line. I will point out a couple of the issues that members may be interested in.

Foyle Port operates in a unique situation in the United Kingdom. We are the only trans-jurisdictional harbour commissioners or port, in the sense that we span the United Kingdom territory and operate in the Republic of Ireland. We are a gateway to Europe and the United Kingdom simultaneously, which is a fantastic position to be in.

Our most pressing issue is not so much the east-west trade between Great Britain and Northern Ireland but ensuring that the gateway for the north-west regional economy is maintained and protected and that the competitiveness of what we do for the regional economy is not eroded by any new red tape or bureaucracy. The commissioners' corporate position was always very much in support of maintaining those free flows of trade. Our pilot boats leave Greencastle in Donegal daily to collect the ships and bring them into Lisahally on the UK side.

For us, Brexit is quite an existential threat. If a hard border were to be created, it could be absolutely critical to our future well-being. By way of preparation, we have been working with the Department for Infrastructure on preparing the physical capacity to deal with any issues that may arise, whether through backlogs of lorries or the like. We are a bulk port, and we primarily support the agri-sector in the whole north-west region. We bring in imports of oil and coal as well as animal products and fertilisers.

In the aftermath of the command paper, we have been working closely with DAERA, as have our colleagues in Belfast and the other ports, to ensure that whatever designations are required to maintain those free flows of commodities are in place and that, on day 1 of the new dispensation in January, if that is when it is to be, we should not find that we get blockages in the port. Ultimately, that would affect whether customers choose to continue to operate through Lisahally.

We have an extensive jurisdiction that runs over 75 square miles of the entirety of Lough Foyle from Craigavon Bridge in Derry to a point between Magilligan and Greencastle at the extreme edge of the lough. That is where the uniqueness of our jurisdiction lies. Our legislation predates partition, and we are recognised by both Governments as being the single authority to operate on that body of water. Going forward, that is an important avenue for us in maintaining our existing trade and developing new trade.

As far as we are concerned, we have the physical capacity. We have a 150-acre land bank that is adjacent to up to 1,000 acres of industrially zoned land. We probably have some of the best capacity for growth of any port in the UK. Also, through the Department for Infrastructure, we have vesting rights that allow us to seek to protect the harbour's undertaking to protect that sustainability. We do not have any problem from a capacity point of view, and our work with DAERA indicates that, because we are not dealing in ro-ro traffic, we have a lower risk of impediment to future trade. However, we need to make sure that that is the case, and we will work closely with DAERA.

Mr Roger Armson (Port of Larne): Good morning, Chair and members. On behalf of the board of directors of Larne Harbour Limited, I thank you for the opportunity to come to talk to you about our business. Unlike the other ports in Northern Ireland, we are a privately owned business, ultimately owned by a business in Dubai. We have simple business objectives, such as to operate safely etc, and, as Larne Harbour Limited, we operate the service to Cairnryan from Larne. I have a dual hat in the business. As well as being the general manager for Larne Harbour Limited, I am the general manager for the P&O Larne to Cairnryan service. I have been in the ferry business for 20 years and in the marine business for 43 years, so I have been around a wee bit.

I move now to the key issues. I support what Maurice said about the ro-ro business. Since the publication of the NI protocol, we have been working extensively. We had already been having

3 numerous discussions with various Departments, but, until the publication of the protocol, it was a bit unclear what was going to happen. Now that we have that, we have been working closely with them, and the plans are close to fruition. On the basis of the understanding and discussions that we have had so far, I have no doubt that we will reach an accord with them. We are all clearly aligned on three issues: to comply with the Northern Ireland protocol; to ensure, as best we can, that unfettered trade continues between the UK and Northern Ireland; and to maintain the speedy discharge process for P&O ferries.

An interesting number to keep in mind is 305: from the bow of our ferry to the port gate, which immediately accesses the A8 dual carriageway, is 305 metres. Typically, the discharge of a ferry can take anything between 10 and 20 minutes, depending on the traffic on board. An intervention in that operation of, say, five seconds to 10 seconds, has a significant impact on the time frames, because 305 metres is not very long and a ship can typically take around 1,500 metres of traffic. We have all been in traffic jams. If you put an impediment into the process of taking traffic out of a port, that traffic quickly backs up on to the ship. That is a key issue for us because ro-ro is about speed.

I will put the traffic that we move into context. At the nadir of the market, which is around Easter, P&O brings in and out around 2,000 freight units a week. That is what we did that week. Typically, it is about 4,000. My reading on that, in simple terms, is that those 2,000 units were the products that were needed on the supermarket and store shelves. That will give you a feel for the type of goods that will be of interest in the operation of the protocol from 1 January, however it operates.

Maurice mentioned groupage, which is when there are a lot of different consignments in one trailer. The haulier may not know exactly what is in those; he certainly does not know at the moment. When all this kicked off post the vote, somebody phoned me and said, "Please tell us what is on your ships when they come in", and I said, "I do not know". They said, "You must know. You run the ships". I said, "Well, have you spoken to your man who runs the toll road from Birmingham down to London? Does he know what is on his toll road?". We know what hazardous cargo is on a ship; we know what chilled trailers are on a ship; we know what livestock is on a ship; and we have a rudimentary understanding of what is in the trailers, but that is fairly crude in its analysis. For example, our people collect data at port of entry on what is in a trailer. It could be chicken, but is it a rubber chicken or is it a live chicken? It could be all sorts of things. It is difficult to know precisely, but it is fair to say that pretty much everything that you see on the shelf, that you buy off the shelf, everything that you buy through Amazon or whoever it happens to be comes through a ferry. It is the stuff that we use day to day.

Currently, the big issue for us is economic uncertainty. We will face, in our opinion, a significant recession when companies are weaned off furlough. Then, when you add in uncertainty as to what will really happen post transition, that gives our business cause for concern.

I will finish off by making a couple of points. We are close to agreeing where we need to get to and what we need to do to get a spade in the ground to be ready for 1 January. That is on hold at the moment, because, I believe, there is a discussion going on with DAERA. We have an excellent relationship with Denis McMahon and his team, who have been very understanding of what we have to do. It has certainly not been a case of, "You are going to do this"; it has been, "How can we work together to deliver three objectives?". What I will say is this: please put whatever pressure you can on whomever it is to give them the green light to go and do what they need to do so that we can get that in place.

The second thing that I will ask — Maurice touched on it earlier — is about HMRC. Our biggest concern is that, effectively, you need to have a system that tells HMRC what is coming into the country. Let us take a groupage trailer that may have 50 consignments in it for various receivers in Northern Ireland. That all has to be what they call "wrapped up" into a computerised message that they do something with. When that trailer gets to the port, the check-in people have to put in the reference, send it to the HMRC system, and the HMRC then comes back and says, "Yes, that trailer is OK to ship".

I guess that some of you have been to Cairnryan. It does not have much run-off space for P&O Ferries or for Stena Line. When I first joined P&O in November 2014, Stena Line's berth was out of action for about five days, so all the traffic came through one location. There was complete gridlock and mayhem in Cairnryan. There is talk about the former port of Stranraer into which you can get about 100 trucks. The point that I make is that, if that process gums up in Scotland because the HMRC system does not work effectively with the traders, the hauliers, the ports and the carrier, there will be a problem. I do not know a great deal about IT systems, but I know that they generally take a lot longer to put in and cost a lot more than everybody thinks. Anything that you can do to put pressure on

4 HMRC, although I know that that is not easy, to give real clarity as to what it is HMRC wants and how it will work would be hugely helpful to our whole supply chain.

One final thing that I would like to say is that, as you know, I have been in the marine industry for 43 years. I went to sea as a cadet in 1977. I was a navigating officer on board ships, and I have worked in the port industry since that time. I commend to the Committee the men and women who work in the port industry and in the maritime transport industry, who are genuinely the unsung heroes, because, without what they do, the stuff that we take for granted on our shelves would not be there.

I live in Bangor and work in Larne, and, because I am an essential worker, I have been driving to and from work every day throughout the crisis. I remember, one day, I was filling my car with fuel and the fellow behind the counter said, "Are you still working?" and I said, "Yes". He asked me who I worked for — I had my P&O jacket on at the time — and I said that I worked for P&O. "Oh, are the ferries still running?", and I said, "Yes. If the ferries were not running, all this stuff around you would not be here". The point is that we all take how that works completely for granted. I would appreciate it if you could, perhaps, make that point. Thank you very much.

The Chairperson (Miss McIlveen): Thank you very much.

Mr David Holmes (Warrenpoint Port): Good morning, Chair and members of the Committee. In 2019, Warrenpoint handled 3·5 million tons of cargo. We are a multi-modal port, which means that we have a roll-on, roll-off ferry. We handle containers, break bulk and project cargoes. Ulster University estimated that, during 2019, we put some £9·6 million back into the immediate local economy of Warrenpoint and Newry.

I would characterise our liaison with the Department for Infrastructure through 2019 as open, productive and supportive. There was a competitive bid process in the final quarter of 2019 to help ports to ready themselves for Brexit. We prepared that application in October, when there was certainly more uncertainty than there is now, but we were successful in that and we managed to reconfigure the port's road layout and warehouse portfolio to gain six acres back, which is significant in a harbour that has a total of 60 acres. We took back 10% of our operational footprint.

Since the end of May, just over a month ago, when the command document came out, we have also tied in with a high-performing DAERA team who, more or less in the space of three weeks, presented us with three sets of drawings based on a gap analysis that would help us, given that we also have been an incoming inspection point for 27 years, to comply with the broader EU regulations that will kick in from 1 January 2021, as far as we know. An emphatic point that we made during those discussions was that, given Warrenpoint's picturesque setting, any development should be sympathetic to the environment. We went as far as DAERA taking on board our requirements, for example, that, if there has to be an inspection centre, it should have a grass roof. That was the kind of initial detail that we had already been talking about.

As with the rest of the ports here, however, for whatever reason, those discussions have ground to a halt, so we are not entirely clear on what the next steps are. We were all given to believe that there was a 22 June deadline for DAERA to pass its applications to DEFRA and that DEFRA was then required to apply to the EU for an extension or modification to inspection point facility licences by 29 June. However, that date has come and gone and it has not happened, and we are not too clear on that. As Maurice from Belfast port explained, ultimately it is the ferries, the traders and the hauliers who have to get to grips with most of the changes. We are primarily a facilitator, but, as a facilitator, we like to be absolutely in the loop and able to support those key customers.

Finally, I just reiterate Roger's comments about the performance of the ports during COVID-19. We are so proud of the fact that Warrenpoint has not had a single case. We have worked hard to ensure that that has happened. We have not had any absenteeism issues; the guys have shown up and kept the island's supply chain moving. We particularly thank all our employees for their tremendous flexibility during these recent challenging times.

The Chairperson (Miss McIlveen): Thank you very much. You all referred to your expansion projects and the uncertainty about where we have been with Brexit and moving forward. In the absence of any agreement between the United Kingdom and the EU, particularly on physical inspections and SPS, how have you been able to ascertain what is required? What contingency plans do you have in place if you do not have the facilities required at the necessary date?

5 Mr Bullick: The only way I can answer that is by referring to the process with DAERA. We have had very good engagement with DAERA, and we think that we reached agreement in principle on the specification, layout and design of the new inspection facility. We are really relying on DAERA to produce that in good time. As my colleague said, on the process we have had very good engagement with DAERA. It has been very focused. We rely on that process.

The issue is principally the uncertainty that I referred to in my opening remarks. It seems to me that DAERA is getting ready not so much for a worst-case scenario but for an outline scenario where there is a problem. Hopefully, it will be in a position to give the Government some sort of reassurance, as DAERA is the intermediary between us and the European Union. As for contingency plans, we have reserved additional land assets in the harbour in case there is more congestion and free flow is interrupted more than we thought. We have land assets reserved to allow more trucks to be stored temporarily, if need be. The core of the answer, from our perspective, is that it depends on DAERA.

Mr McGrath: Chair, our dilemma about Brexit is whether arrangements can be made to maintain the smooth flow of traffic. The consequence for us of that not happening is not so much that we will have too many blockages, but rather that no ships will come. The consequence of a hard Brexit for us could be the loss of up to 40% of our trade. Instead of being congested or having too much traffic, it will be tumbleweed that we will be dealing with.

Our engagement with DAERA and the work on adhering to the command paper on the protocol were very positive signs that we were going to mitigate as much as we possibly could any impacts of Brexit, hopefully with an agreement. The question then arises of whether we end up in a no-deal scenario and whether the command paper and the protocol survive a no-deal Brexit, and that may be down to political interpretation.

If that is the case, we would be gravely concerned about the potential consequences on the support that we could give to the regional economy and to the cross-border element of that economy. Traders will take the line of least resistance, because if there are to be a lot of checks and bureaucracy at the ports, they will find other ways of working. We could be bypassed, with vessels coming into the Republic of Ireland and serving that region instead of coming through us. It is still a very pressing issue, and the longer it takes to resolve, the more concerns we have.

The Chairperson (Miss McIlveen): OK, thank you. Roger, you mentioned that you were shovel- ready, essentially, at this stage but that you have held back.

Mr Armson: Thank you, Chair and Committee members. Picking up on Maurice's point, we are ready to go in terms of the plans. I am not an expert on the European legislation and what is required for transiting into the new way of doing things. We are very much reliant on DAERA. I have been really impressed by the speed with which it operates and the times at which you get stuff — at midnight, for example — and the detailed plans and all that sort of stuff. I am confident that DAERA knows what it is doing and that it knows what capacity it needs.

On that specific issue, I would say a couple of things. It is a function of what the inspection rates will be. If you look at World Trade Organization (WTO) traffic that comes through the UK and Ireland at the moment, the inspection rates on that traffic are relatively low.

Some of the inspection rates that I heard talked about, particularly in the Republic when I was responsible for the operation there, were way higher than the rest of the WTO traffic. I questioned that, and that is a key issue. I am not sure what inspection rates are being considered, but, as Maurice said, they probably have a worst-case, probable-case and best-case scenario, and they are probably edging towards the worst case, because they have got to be ready. On infrastructure, once they get the green light to go ahead, we are ready to talk to them. We are ready to come to the arrangements. The sooner the better, please. However, my biggest concern is about the agent capacity that is going to help traders and hauliers get their systems into place so they can tell the ferry company and, primarily, HMRC what they have got in their trailer and find out if they can bring it across Northern Ireland.

My experience of haulage businesses here is that you get the extremes. Some are very into systems and integration and can deliver things very quickly; other people are still relying on the fax machine. It is going to be difficult for some of those people. Of course, we are approaching a period when cash flows for many businesses, including our business, have been hugely stressed. If you then lump on, "Oh, by the way, you have got to pay a lot of money for a system", or even if it is training and bringing

6 in extra staff, it will be problematic. You may wish to think about what training can be given to agencies and people who have the aptitude and who can do what in effect is a quasi-customs clearance system.

I have personal experience of this. One of the jobs I did was running a port agency on Teesside. We had a service going to west Africa; I did the import clearances from time to time. We did really esoteric things. For example, did you know that we import Guinness from Nigeria? It is stronger than the Guinness made down South. However, the customs, duties and excise is quite complicated. It is a function of the alcoholic content and all that sort of stuff. It was not that difficult, and that was in 1992 and we had a computerised system. I am not the brain of Britain, and it took a couple of weeks for me to be trained up to deal with the duties, and I had no major issues. The point is that a lot of people are going to be searching for work, so there are the people who will have the aptitude and the skills to be trained up very quickly. If you have some money to put into training, that might be a way to do it. If you have the capacity, then we can do it for everywhere else as well.

Mr Holmes: The other way of phrasing that question is: as a result of last-minute successful negotiation with the EU, will the Joint Ministerial Committees reduce the onus on checks and so on? The gap analysis completed by DAERA is that, come what may, we can be compliant with the EU regulations, so that is my understanding. As has been said elsewhere, we are talking about multiple agencies here, and, if everything gets too complicated and if there is no free-trade deal with the EU, presumably the role that customs will have to perform will be considerably more complex. However, if we make the whole process too complicated, and the notion of retaining unfettered access is not there any more, economically the ports will suffer because, as Brian said, ships will divert elsewhere. That is why all the ports have worked tirelessly with DAERA to try and progress what is actually required.

The Chairperson (Miss McIlveen): Really, the question was about how you will predict what you need. At this stage, it is very difficult to know what you will need.

Mr Holmes: HMRC cannot be too specific, because it is not sure what tariff arrangements will be in place. The software package for the new consignment notice for a product to come from GB into NI has not been written yet. HMRC is quite open about that, although it says that it is confident that that can be written. Customs officers cannot be too specific about what the nature of the checks will be, because they do not know what the tariff arrangements will be. There is still a massive amount of uncertainty there.

The Chairperson (Miss McIlveen): This is the final question from me. I am mindful that we are the Infrastructure Committee and that a lot of your discussions are with DAERA. However, what is your main ask of us today?

Mr Bullick: I will start by saying that the engagement with DFI has been very good throughout. The Department has always kept closely in touch and has worked with us. It seems to be very well informed and has informed itself particularly around the fact that the focus of attention really lies on the shipping companies and the traders and that. We do not have any specific asks from DFI at the moment because, from our perspective, the locus of effort has quite clearly shifted to DAERA and HMRC. I think that my colleagues have given you a lot of granular detail on all of the issues embedded in that, so, beyond the fact that DFI has been looking after us very well with liaison and keeping in touch and having oversight, as we do in the port, I do not have any specific asks of the Infrastructure Department.

Mr McGrath: I echo that. On the Brexit preparations at Foyle Port specifically, we worked very closely with DFI on the funding that was available to make facilities ready. The Department did that, and in extra quick time. We have a very good rapport with it. It is unusual to come here and not have a big whinge list, as we normally have. I think that, under the circumstances, DFI has performed extremely well, as has DAERA, I must say. I think that officials are doing what they can to comply with the Command Paper specifically, and, as far as Foyle Port is concerned, those arrangements, which are more modest than they are at the other ports, are defined and agreed between us, and all we need to do now is get that signed off. Time is of the essence. That is the only thing that I would say: it is pressing timewise.

Mr Armson: I echo what has been said already and have just two asks. Whatever pressure, if you like, you can bring to bear to get the decision made as to what is required, please do that. Whatever pressure you can bring to bear to HMRC to get its systems clear, please do that. My understanding is that it is talking about bringing in a new system for Northern Ireland. I think that it is called CDC,

7 although I may be wrong on that one. I think that the current system is called CHIEF. I am a bit out of touch at the minute because I have not done it for a long time. My preference in all of these things would be to use a tried-and-trusted method. We already have enough uncertainty with what is going to happen economically. Please try and take as much uncertainty out of what is going to happen and how it is going to be done as possible so that it is as easy to do as possible for the trader, for the haulier and for the carrier — the shipping lines.

Mr Holmes: We simply ask that the Department continues to listen as attentively as it does currently and predicts and forecasts, like us, that it is likely that additional funding will be required in the near future. I am hoping that that is not the case, but it is hard to see how we are not going to have either a second wave of the pandemic or a second economic wave. We all need to try to be ready for both.

Mr K Buchanan: Thank you, gentlemen, for your presentation so far. You obviously know your ports and know Northern Ireland imports, exports and all that fairly well because, I presume, you work closely together. What is your understanding of plans and infrastructure likely to take place on, for example, French soil or Belgian soil for exports going out of mainland Great Britain? Have you had any communication with those ports, or do you have understanding of what is happening at those ports?

Mr Armson: As part of P&O, I am part of the unit that operates Dover to Calais. We are in extensive discussions with both the Port of Dover and the port of Calais. At the moment, they operate under the Le Touquet agreement, whereby the British authorities are based in Calais and the French authorities are based in Dover. That is to facilitate faster operations. To put it in perspective, they handle about six times the number of trailers daily that we do. They basically have a ship loading on the berth at all times, and they turn them around in 40 minutes. At the moment, they are full. The issue with Dover, as anyone who has been there will know, is that, on the left as you go in, you have the white cliffs and, on the right-hand side, you have the sea. There is not much space. In fact, it is on the M20 where they stack vehicles; you have probably heard of Operation Stack on the radio. My understanding is that we are working closely with them. The fact that we got this year of transition has helped us tremendously. I think that we will be ready to go.

Just a final point on that, a big chunk of the Republic's goods from the European Union comes through Dover and trucks up through to Holyhead and into Dublin. Interestingly, there was a meeting in Dublin that one of our people attended, and once they had the small talk, they were pretty much asked, "How is it working in Dover?". People there were aware that fast-moving pharmaceutical goods and that sort of stuff come through, which they, of course, need to make sure continue to run.

If you think about Holyhead, you find that it has the opportunity to get really congested because you have a narrow pinch point as you come out of the port and go over a bridge. Put it this way: Dover- Calais is the biggest cash generator for our company. If Dover-Calais stops working, we will have a problem with our business. Whilst I am not directly involved, we are as confident as we can be that, as of 1 January, it will continue.

Mr K Buchanan: Between now and then, can you see any infrastructure being needed that is additional to what is there now?

Mr Holmes: I do not think that there is a need for additional infrastructure, because a lot of it is there already. Calais certainly has a lot more space than Dover. We do not think that it will be a significant issue. There are two shipping lines operating out of Dover into Calais. There is P&O and DFDS, which are, effectively, in competition with the Channel Tunnel operation. Dover port and Calais port are working extremely closely with the shipping lines to make sure that they do not lose business to the trains.

Mr Bullick: I do not really have any direct comments on that, because the Port of Belfast, obviously, does not run any roll-on roll-off operations directly to the continent; all our operations run straight to GB.

All our operations for containers are scheduled services to Antwerp and Rotterdam. Because they are in the container mode and there already is what is called a port community system in all the terminals, that means that the processing of those cargoes will probably not be greatly affected in terms of throughput.

8 Mr K Buchanan: More generally, coming back to Northern Ireland, where do you see yourselves in three years? We talked about volumes. I appreciate that you do not know exactly; maybe that is a very open question.

Mr McGrath: I can take that first, if I may. On the Foyle Port, the crisis that we are having with Brexit and COVID also comes in line with the environmental pressures that we have. In a normal strategic cycle, you would perhaps be looking at more environmental issues. The big thing that we will have to deal with in the medium to longer term is how we decarbonise the port's activities moving forward. We have already made some moves on that because we think that the tonnage levels for the region are essentially fairly static, so unless we start displacing materials from each of the ports, Northern Ireland and the broader market is the market and it is constrained generally by the capacity. With the geography of where we are, we need to look to the future by recognising that trade could be static and, in fact, be lowered if we move away from coal and oil products in the medium term. The strategy that we have is one of decarbonisation. We already have a planning application through for a large data-centre development, and we are looking to get more into the innovation space. The future will look like a mixture of port activity with a more modern look at renewable energy such as offshore renewables and the like. If we were to sit on our hands and look only at tonnages coming through the quay as they are now, we would go into eventual decline.

Mr Bullick: I echo what Brian said. Overall trading levels tend to run on a plateau of tonnage throughput. We agree with everything that he says about decarbonisation. If I was being optimistic, I would say that the economy requires a certain amount of trade in and out and that will continue in some form. Brexit commences on 1 January 2021, and I would like to think that, if there are interruptions or problems, they will be ironed out over time, as people get used to processes, adapt to them and restore the steady state. The worst-case scenario is that there could be a period of disruption.

Mr Holmes: Ports are essentially barometers of the economy. If the economy does well, the ports get busier. We are not out of COVID-19 yet. We do not anticipate growth. As Brian says, if we achieve growth, it will be either because it has been displaced from Dublin or from one of the other Northern Irish ports.

Mr Armson: I speak specifically about ferry traffic from Scotland to Northern Ireland, which is roughly about 400,000 freight units a year. That was, more or less, what was in the market last year, and that has been steadily growing as a result of increasing population. The utilisation of the two main carriers was about 50% so, effectively, we were paying a lot of money to move empty space backwards and forwards. That is not sustainable. It cannot continue, because you do not get the return on capital that you need to make a new ship.

I do not see the transition as having a massive impact on trade volumes, as whatever problems there are will be solved. If you think about the short-term economic outlook, we are in this phoney economic situation at the moment, with people getting paid for doing nothing. That clearly cannot continue. People will be weaned off that stimulus, and we all saw the news last night about the number of job losses, particularly in the hospitality sector, etc, which will hit people hard. We can see an end-of- transition boom coming up, as we did in March last year, and we see the first quarter, particularly in imported goods for supermarkets and other retailers, doing that. People will not have money, and there will be warehouses full of stuff that will not be needed.

People often ask me, "What you think the numbers are going to be next year, in the total number of freight units carried on that northern corridor?" I do not think that it will be more than 400,000. I am not an economist. However, looking at what is going on and the impact of what is happening, you can see that people will have less disposable income; therefore, they will buy less stuff. As has already been said, we are a bellwether for the economy. If people are not buying stuff, not as much stuff will come through the ports. It is as simple as that.

To answer the question specifically, if we are back to 400,000 units in three years, that would be pretty good. That is my honest opinion. It is going to be difficult, and, as has already been said, we are not out of COVID-19.

Mr Hilditch: Maurice, you said that 50% of your trade was through freight ferry and that you had some concerns about that. Are those the same concerns that Roger mentioned: the fact you do not know what is in containers? Is that where you were coming from?

9 Mr Bullick: We have exactly the same issue. We have good data on how much cargo moves through the port and where it comes from. However, when it comes to what is called "unitised traffic", which can be either a freight ferry or a container, we have much less information. We get manifests for all container traffic, but we do not get any information, at port authority level, of the component parts of road trucks. Effectively, the Irish Sea is a motorway with two ports and a ship in the middle. It is exactly as Roger says. We do not gather that data and never have. We go to our freight ferry operator, Stena, to provide that information. I am not authorised to speak for Stena, but it has some basic data that it shares with DAERA to help with DAERA's planning assumptions. Stena has been integrated into the process with DAERA as well to make sure that DAERA officials are as well informed as they can be. However, the overriding principle that there is not good, 100% validatable data on the contents of road ferry trucks is correct in my view.

Mr Hilditch: On the Foyle presentation, there was a reference to the ports' grant scheme. You have been lucky enough to get nearly 60% of that. Was that fund open to everybody or only for certain areas?

Mr McGrath: I understand that £1 million was available to all the Northern Ireland ports. We all put our best foot forward, and allocation was dependent on what was readily doable at that time. We benefited greatly from it and had a site that was ideally suited for it. We were able to fast-track it and get it completed. A lot of hard work by the Department went in to facilitating it.

Mr Hilditch: Was it a one-off grant?

Mr McGrath: Yes.

Mr Hilditch: Thank you. The residue is still available to be spent. Is that correct?

Mr Bullick: We also made an application under the scheme. The money was extremely helpful in building our capability resilience. As Brian said, that is the first public money that the port has received in the 20 years that I have been there, so it is very welcome. Thank you very much.

Mr Holmes: I do not believe that there are any residual funds left. We were told that anything that had not been spent by 29 February, if you could not prove that you had paid the invoice, could not be reclaimed.

Mr Hilditch: Thank you. I join you in commending your staff for coming through this period; hopefully, we are starting to come out the other end. In my mind, you are as much front-line staff as anybody else. How did COVID-19, in general, effect the port business? Was there a drop-off? You said that stuff was still coming through, but what sort of effect did it have?

Mr Holmes: Our volumes initially dropped by about 30%. It was profound and severe. The sales figures have not recovered yet, but they are certainly healthier than they were.

Mr Armson: From a ferry point of view, freight volumes reduced by about 50%. Typically, P&O operated 92 departures a week; we reduced that to 52. Just yesterday, we increased it to 62. The freight business is now tracking about 20% to 30% less than it was last year. A huge impact for us was the cessation of the passenger and tourist business, because non-essential travel is not allowed yet. Typically, we would do about 3,000 tourist cars a week; that went down to a low of 50. Last week, we did just over 800 tourist cars, so it is slowly coming back. However, we are restricted in that our ships can normally take 410 people. When we had the two-meter restriction, we were limited to 140 people on board a vessel, and now that we have gone to one meter, we have increased that to 250. That has had a huge impact.

We anticipate that, once people can travel as they wish, we will see a big uptake in demand. The bright spot that Northern Ireland, potentially, has is that there is great opportunity for people to holiday here. Personally, I will not put myself into a metal tube at 30,000 feet in the near future. We are promoting the fact that ferry travel is a good thing to do. You can go outside on a ferry, and the air that comes in goes straight out so we are not using recycled air. There is a plug for the ferry business.

Mr McGrath: COVID-19 showed the difference between a bulk port like us and the ferry ports. April was one of our busiest months in years, as the demands of the agri-sector are still very much there. We have lost some trade because of COVID-19 but not to the significant levels that David is referring

10 to, and those probably will be lost in this trading year. However, the bulk sector has been pretty resilient. The use of aviation fuel and petrol dropped when lockdown hit, but the agricultural commodities have been really strong.

Mr Bullick: From the Port of Belfast point of view, I will start with the operating model of the port and, thankfully, we had minimal impact on our employees; only one or two people were affected. From an employee perspective, everything has been fine; in fact, staff availability has been very high. On the operating model, with regard to the ability to throughput cargoes, that has basically been unaffected. We already have a pandemic plan that we invoked and a crisis management plan that was also invoked.

As my colleagues said, there was a significant dip in our trade in April and May, whereas March was fine. I think that we are running at about 8% down, year on year. It is too early to say what the trajectory of recovery will be, because, to my mind, the really big question is: what shape will the recovery take? I do not want to venture an opinion on that except to say that there are some minor indications of an upturn. However, I would not get too excited about it just yet.

Mr Boylan: Thank you very much for your presentation. It is a pity that we did not get an opportunity to visit the ports to get a better understanding. I have been out at some of them before, and some members' eyes lit up when you mentioned Guinness. I will ask a question about two specific points. One is the new digital/paperwork process that HMRC advised will be in place, and you mention that in your report. Is it ready to go?

Mr Holmes: No.

Mr Boylan: Did you get a date for it?

Mr Holmes: No.

Mr Boylan: Is it a case of how businesses feel about it?

Mr Holmes: We are not a haulier. The port has an opinion on all those things. However, we are not a haulier, so we will not be subject to it. The idea is that a haulier will roll into a trader in England, say, and the trader will provide them with different sets of paperwork. The haulier will then reference that consignment through a government portal to get a single consignment number. Before the same haulier makes it to the port of choice, he will confirm, through the same portal, the trailer number or the vehicle registration number. That is on the basis that they may have changed trailers, if it is a consolidated load, for example, on route. If, when he presents his paperwork at the port, it does not tally with the government portal, he or she will be sent away — they are not getting on the ferry. However, that software has not been written yet.

Mr Boylan: So there is nothing there. Are there any other comments?

Mr Bullick: To amplify those remarks, this is the engagement with HMRC that has been mentioned. This is really all about DAERA and HMRC delivering this effectively by 1 January. I think that we are all 100% aligned with that.

HMRC is interacting with us to develop more details of the operating model. My colleagues have already mentioned the computer system that is to be available, and I think that it is what is called the pre-lodgement model. The theory is — this is for GB to NI traffic — that the pre-lodgement model is key, because that is where the truck is cleared, in effect, on the sea. In other words, the ferry operator will have an obligation to ensure that the truck has a movement reference number or equivalent before it goes on. Once it goes on, that is sent to HMRC to do a risk assessment on the sea, and then, if something comes up, it will react accordingly.

More significantly, the role of the port authority is limited. The locus of effort falls on the ferry company to check that the truck is going on, that the hauliers have all the requisite documents before they arrive at the port and that the trader — the owner of the cargo — makes sure that they have provided the hauliers with the information. Finally, the intermediary ship agents and the like operating in that ecosystem have to provide a support service. My understanding is exactly that of my colleagues: that it is being developed. However, it is key that it be delivered by 1 January.

11 Mr Armson: I have a couple of comments. I support everything that has been said. I refer you to the second point, point G: please put as much pressure on HMRC to come up with its systems. There are two key risk areas that I have mentioned: if a ship is not allowed in at port, it has to be sent away. However, where will it go and where will it dock? Secondly, at an open meeting a couple of weeks ago I asked HMRC, "How long will it take from the truck arriving and presenting its data at check-in to getting a response that that truck or trailer is cleared to go to Northern Ireland?". HMRC did not answer to my satisfaction. It said, "We hope that it will be instantaneous”. Well, we have already talked about the 10-second thing; if there is a delay of more than a minute, you can quickly get traffic backed up. That is the first point that I would mention.

The second point is that their target is to deliver. Following on from the risk assessment that Maurice mentioned, that truck can either exit straight out of the port or they have to do some intervention by way of documentation or actual physical checks. They are giving a minimum turnaround time for that of two hours, so it had better be two hours because our ships take two hours and 10 minutes to get between the two ports and it takes very little time for the traffic to come out.

Those are the two areas that I would have concerns about, as well as the fact that they just seem to be behind the eight ball in getting the thing ready. I can tell you that, at the forum that I attended, there were significant concerns from a trader/haulier point of view that it would not be ready. There were significant worries about how it was going to work etc. On that systems issue, from an infrastructure point of view, we can make it work. For example, if the infrastructure is not quite ready in the port, we have 14 acres that we can utilise fairly quickly. I am not so concerned about the infrastructure; it will be done, provided that DAERA gets the green light. It is the systems that I am more concerned about.

Mr Boylan: It was said that there would be a new digital system by 11 June to move things, as quickly as possible, back and forward between here and Great Britain, and it is not ready. There are no dates or anything else, and it has to be ready for 1 January. You were right to say that you are a barometer of how the economy is growing or decreasing or whatever the case may be. After the COVID experience, you will be one of the key generators in building the economy again. You talked about essential and key workers who have played a big role over the last couple of months. You will play a big part in economic regeneration. In all of that, Maurice, you said that you had been talking to DFI and that you have a good enough engagement.

Mr Bullick: Yes, we have very good engagement.

Mr Boylan: The hauliers have a big part to play in all this and have played a big role. Have those discussions expanded out to include the haulage sector? Is it just the case that you have a responsibility for taking in the containers, the ro-ro service and everything else, or has there been a broader discussion around the economic recovery?

Mr Bullick: We have not discussed that with the Road Haulage Association. There has, obviously, been a huge amount of interaction between the Road Haulage Association and HMRC because that is where the emphasis will lie. However, when it comes to what the post-COVID recovery trajectory will look like, it is early days, to be honest. Leading from your remarks, the key thing is that the operating models for the port remain stable. Largely, these are infrastructure businesses, so, if trade drops off by 10%, the basic operating model keeps going. It does not really affect the operating model. I would be very surprised if any of us have seen any significant impact on the operating model. The preservation of the operating model and the efficiency of the free-flowing traffic is key to that regeneration.

Mr Armson: Our understanding, from the contacts that we have — we talk to our customers daily — is that the hauliers want clarity from HMRC as to how things are going to work. That is key.

Mr Boylan: Finally, I want to ask about authorised economic operator (AEO) status. What is your assessment of that, in terms of the protocol and everything else?

Mr Bullick: The Port of Belfast has AEO status, but we are not the only ones. To summarise it, AEO status is a compliance regime to make sure that the port has authorisations in place to allow goods to transit. As far as we are concerned right now, we have everything in place on the AEO side. There will, of course, have to be a checking process with HMRC that it is content with that. Basically, what happens is that you cannot have a port where ships just turn up with cargoes. Every port has to be authorised by HMRC as a point of entry, and the AEO status is very strongly linked to what was called "wharf approval"; that was the old-fashioned term. There are a number of approvals that a port authority needs to have in order to allow cargoes to come in. AEO status, I would suggest, is a

12 streamlining and efficiency measure that goes over that. We have had AEO status for some time; we applied in preparation for Brexit and that bit ran very well. We had a good response from HMRC.

Mr McGrath: We also have AEO status. It is sometimes referred to as the "trusted trader scheme", but it about the confidence that HMRC has in the port and its systems that it can be managed correctly. HMRC comes in and does a lot of auditing and various other things. In as much as that might be a Brexit mitigation measure, we introduced it, and it is now live at Foyle port.

Mr Boylan: The haulage sector has called for a mutual recognition agreement. Has there been any discussion about that?

Mr McGrath: At arm's length, I know that big pressure is being put on ships' agents and the other people who work in the system, as well as on the hauliers. They are very concerned about whether the systems will be up and running in time to avoid any delays. Those fears are fairly well founded. From the port operator's point of view, that is a slightly removed situation, but if paperwork and delays compound the problem, our operations could be impacted on accordingly.

The Chairperson (Miss McIlveen): Thank you. I am conscious of the time.

Mr Muir: I will try to be brief, Chair. Article 12 of the Northern Ireland protocol gives the EU authorities the right to access the ports to audit and oversee the implementation of the protocol. Have you had any contact about that or received any more detail about how that will be implemented? What issues do you foresee with that?

Mr Bullick: The only interactions that we have had are with HMRC and DAERA. I have never had any interactions with any European Union agency that I know of in the Port of Belfast.

Mr McGrath: It is exactly the same for us.

Mr Holmes: It is the same for us.

Mr Armson: It is the same for the Port of Larne. I will just add that we are audited all the time by the Department for Transport on security etc. I do not see it as a major issue if HMRC does decide that it wants to come and have a look.

Mr Muir: OK. It is in the protocol, but there has been no contact made and no preparation done for that.

Mr Armson: No.

Mr Muir: OK. I want to ask about the goods vehicle movement service (GVMS), which we have talked about. With it, you will have to record imports with HMRC. I understand that HMRC is committed to that service being live on 1 January but that it will trial the service in November and give it 20 working days, on the basis that a working IT system should then be ready. How confident are you about that in the context of the previous system and the sector's ability to deal with the new service, given the losses that it has sustained because of COVID-19?

Mr McGrath: As an observer rather than a practitioner in this, I do not think that the track record of government with that sort of technology implementation would give anybody in the industry a great deal of comfort, especially with those tight time frames. It is very close to the deadline. I do not think that too many people in the industry think that it will happen.

Mr Bullick: I think that you are right. As you mentioned, the GVMS is the linchpin of the HMRC process. It is very easy to be pejorative, however. We do not know. All that we can say is that HMRC is working with us, and we can only assume that it knows the deadline and will deliver the system in time.

Mr Armson: I echo what everybody else has said, but it would be at the top of my risk list.

Mr Muir: Do you have concerns about losing trade to other ports on the island of Ireland? What is your relationship with them?

13 Mr Bullick: Our principal relationship is probably as competitors. Believe it or not, the Port of Dublin is a fairly big competitor of the Port of Belfast.

There is a lot of debate about the displacement of traffic between the ports in Northern Ireland and Southern Ireland. There could be many reasons for that. You could have cargoes that currently go through Dublin going through Belfast, but, equally, you could have some cargoes diverted back through Dublin. The South of Ireland has a much bigger railroad facility, doing about 1·1 million freight units. When you look at the island of Ireland, it is quite interesting. We do 850,000 freight units in Northern Ireland, and it does about 1·1 million. Both jurisdictions rely heavily on that.

The trouble with predicting that is that you do not know what you do not know. The fact of the matter is that there are so many moving parts in the economic jigsaw that I would not venture an opinion to try to make sense of it. You are absolutely right to signal it as an uncertainty and a risk, however.

Mr Armson: I see it as an opportunity as well. The thing to think about is that the road from Larne, through Belfast, past Warrenpoint and down to Dublin is a continuum. The distance between ports is not that big when you look at, say, European operations, where you have traffic that can go to Antwerp, Zeebrugge, Rotterdam or even Hamburg and still get to where it needs to go to from an efficiency point of view. Transportation these days is hugely more efficient. You have ships that can take 24,000 containers. On this issue of getting goods from, say, New Zealand to the table here versus getting them from the Loire valley in France, the costs involved mean that is probably cheaper to bring them out of New Zealand.

Somebody said that traders will find a way. Cost in the transport supply chain and efficiency are two hugely important factors, and reliability of supply probably goes above cost.

Ms Kimmins: Thank you for your presentation. Rather than go over what has been said, I have a specific question for David. It relates to Warrenpoint, which is close to my constituency of Newry and Armagh. The lack of clarity concerns me. I am aware that the British Government proposal for adhering to the Brexit regulations for checking facilities is for 40,000 square feet of infrastructure.

Mr Holmes: Those drawings are not finalised. In fact, the last information that we had was that a new set of drawings was to be considered.

Ms Kimmins: That is even more concerning: we are six months from the deadline, and nobody knows what is happening.

Mr Holmes: Yes, it is now six months minus one day, so less than six months.

Ms Kimmins: Less than six months, yes. You said that there is massive uncertainty here.

Have we any idea who is footing the bill and when construction is meant to start? If we do not even have the finalised plans, do we know where that sits?

Mr Holmes: According to the Northern Ireland protocol, the cost of any additional facilities that are required at Northern Irish ports will be footed by Treasury — by Westminster. That is our understanding.

Ms Kimmins: That has not been confirmed.

Mr Holmes: No.

Ms Kimmins: Is it fair to say, then, David, that there has been no engagement, even from the British Government, on this with you or any of the other ports?

Mr Holmes: We had a briefing from the Under Secretary of State at the end of May/beginning of June. During that discussion, he confirmed that, where further facilities were required, Westminster would pay for them. That has been the extent of it. It was a 20-minute discussion about the Northern Ireland protocol.

Ms Kimmins: Your briefing touched on the environmental impact. I know the area well, and it is very picturesque. There are concerns in the community because it is close to an area of special scientific

14 interest. Is there any idea of what the environmental impact will be? What plans are there to have meaningful consultation with the community and local elected representatives once those plans are finalised?

Mr Holmes: It is a chicken-and-egg situation. Until we know what is being proposed — at this stage, we do not — how can we consult on anything?

Ms Kimmins: It is important that, once we get to that stage, consultation plays a key role going forward.

Mr Holmes: Yes.

Ms Kimmins: The impact on hauliers will impact on all the ports. I have a lot of engagement with hauliers, particularly in Newry and surrounding areas, who are going through a difficult time as a result of COVID. With Brexit on top of that, and the lack of certainty around this issue, what are the implications if the facility is not completed on time?

Mr Holmes: Assuming that the joint committees do not move the goal posts and declare that fewer checks are required, there is a potential scenario across Northern Ireland that the food products that require SPS checks will not be able to come in. That is in a worst-case scenario.

Ms Kimmins: With no concrete plans, that is a possibility.

Mr Holmes: That worst-case scenario can be mitigated by temporary arrangements, arguably, but we do not know whether the EU would accept those.

Mr Armson: May I make a quick comment? First, on consultation, my understanding is that any new infrastructure or facilities will be subject to planning permission. So, I would have thought that there would have to be a consultation process.

The other point that I will make is that the transport supply chain that we are all part of is extremely resilient. It is very quick at thinking on its feet and coming up with solutions. If the facilities are not ready, we as an industry will work with whatever the authority is at the time — at the moment, it is HMRC — and I have no doubt that we will come up with a pragmatic solution. That is how we have always done it, irrespective of what the crisis has been.

Ms Kimmins: I know what you are saying about planning permission. However, with the port, it will come within permitted development. Is that right, David?

Mr Holmes: That is right. Certain areas in ports have permitted development rights. A port is not subject to the same public scrutiny process as normal planning permission requires.

Ms Kimmins: That is the concern. If we were able to put that in place, it would definitely help to allay fears in the community and make sure that everybody was involved.

Mr Holmes: It is a double-edged blade because, if the planning process takes too long, you are straight back into putting those hauliers that you talk about out of work and jeopardising the supply chain. It is why we have all asked that the process can be expedited as soon as possible: we want to have a chance of being able to keep everybody on board.

Ms Anderson: Thank you, Brian, Maurice, Roger and David. I found the information that you sent to the Committee and your presentations this morning very informative. When dealing with the Chamber of Commerce and others, particularly in my constituency, I hear the same echoes of industry and businesses feeling uninformed and unprepared and having a lack of understanding.

Maurice, you made a point about the Command Paper being a British Government paper, not an EU/British Government paper, and that is probably creating its own difficulties and lack of certainty for your staff. The one thing that we do know is that the withdrawal agreement, which includes the Irish protocol, is an international agreement. It was agreed by the EU and the British Government. Are we facing the worst-case scenario? Unfortunately, as we sit here on 1 July, that seems to be the case. Despite what Warrenpoint was told about a potential modification in the extension, that has not been

15 asked for. In fact, the British Government said that there would be no extension to the transition period.

I go back to the question that was asked about the grant. All of you probably needed such a grant to prepare. Brian, your paper mentions that you used that to look at a no-deal scenario and build resilience. You know what will happen in a no-deal scenario, even though you do not have any information from HMRC about the protocol. What will happen? Brian said that 40% of your trade will be affected if there is a hard Brexit. You all know how damaging a hard Brexit will be to each of the ports. Brian, what have you been able to do with that half a million to prepare for a no deal? In the event of us all going over a cliff in less than six months' time, are you all generally prepared? That is the reality of what we might face.

Mr McGrath: The initial engagement with the Department was on no-deal preparations. That is what it was designed to do. That takes account of any transport glitches or any of the bureaucracy, hitches and other things that we have talked about. However, a more fundamental issue for us is that, if there is no deal, what do we do? We press on with our diversification model and programme because no deal, in the traditional port mode, could ultimately mean significant loss of trade and tonnage across the quay. We must be progressive in how we look at that, and we know that we will face the issue of decarbonisation anyway. No deal is maybe one of the more pressing issues for the trade, but there are more fundamental long-term issues for the port industry to look at, such as engagement with renewables and all of those things. Our actions and efforts alongside the grant scheme, for instance, were only one part of the plans that we have to move the port into a different place to ensure our sustainability, which is the core duty we have to our stakeholders.

Mr Armson: On behalf of the Port of Larne, my understanding of a no-deal is that the transit of goods will remain as it is today and traffic will flow freely in and out of the Port of Larne. If that is the scenario — to my mind, it is unlikely, but we all plan for it — more traffic will come through Northern Ireland than would ordinarily transit out of Wales directly into the Republic of Ireland. I expect that that will be relatively short-term, maybe for three to six months whilst things start to equalise. If things remain as they are, the traffic that we carry will continue to flow.

Ms Anderson: I suppose that is not going to be the situation that the other ports will be in.

Mr McGrath: We used the funding to strategically reconfigure the operational footprint. So on the one hand, if Brexit is hard and problematic, we can have a giant car park, and if it is not, and it actually presents opportunities, we can avail ourselves of those, because we have created usable space. I do not know how it is going to play out on 1 January.

Ms Anderson: It would be informative for MLAs to know that, in the event of going over a cliff, there are certain ports that we need to engage with more than others. For instance, if it is not going to have any impact — in fact, Larne is telling us that it may actually benefit, because there might be more traffic coming in. Can you direct us?

Mr McGrath: At our port, 40% of our volume heads to the Republic of Ireland. If there are all sorts of new boundaries and barriers, then, yes, we are going to be profoundly impacted.

Ms Anderson: Well, it is the other way that is going to be the problem. It is going to be what is coming from Britain, because that is not in the protocol. What is in the protocol across the island will be OK. The problem is going to be what comes across from Britain over the Irish Sea, and that is what I want to ask you about. We have heard some information about the ports, and you mentioned your engagement with DAERA. Roger mentioned that Larne has the space if infrastructure for Brexit control border posts has to be erected, and that it would be easy to do if he understood what was required. Are all the ports ready for the event?

Mr Armson: Sorry, can I clarify my point? What I said was that, if the current planned facilities are not ready, we have space that could be relatively easily used. We have 14 acres that are effectively brownfield, and we would scrape it and turn it into trailer parking very quickly. Putting infrastructure on that space is a different issue, and it would require a pragmatic approach to achieve that if the Northern Ireland protocol is enacted and we do not have some sort of no-deal scenario where things carry on as they are.

16 Ms Anderson: We understand the difference between the border control post and the customs post. What I am trying to ascertain is whether all the ports will be ready if additional measures have to be put in place for Brexit border control posts. The customs checks may be another situation. If there is not a crash-out Brexit, then the issue of customs checks might be resolved or dealt with in that future relationship. However, if it is not, I want to ascertain whether all the ports have the same capacity as Larne to deal with border control posts and have the infrastructure to turn something into a facility that is required for trucks. Are the ports ready if, in six months' time, that is a necessary outcome of either a crash-out Brexit or a future relationship?

Mr Bullick: Belfast is using an identical approach to Warrenpoint. We have utilised that money to create additional acreage. Simply put, a port is a land-hungry business; it consumes a lot of land. The solution, in many cases, is basically acreage, which you can, then, employ. We have assets in reserve in the event that anything untoward happens.

Probably the overriding consideration, though, is that ferry movements have a booking and allocation system, so a truck does not just turn up in Belfast or Liverpool; trucks are booked and allocated. I suggest that, if there were a problem, the ferry would not move the truck in the first instance because it would not be cleared to load on the other side. That would tend to indicate that you would not have congestion at the port because, effectively, the ship would not sail with the truck. That kind of overrides the whole debate.

The other issue, of course, is that we are positing into extreme uncertainty as a result of any dissonance between the Northern Ireland protocol and the Command Paper. Right from the outset, that has remained a significant uncertainty. That is why all my colleagues have pointed at the need to accelerate the process with DAERA and HMRC to get that certainty. Hopefully, that will be delivered on time.

Ms Anderson: Lots of businesses are asking the same questions as you.

Mr Bullick: You are right. The port industry is only one portion of that ecosystem to be factored in. You also have the haulage companies, ferry companies, traders, owners of cargo and intermediaries, the whole bit.

Ms Anderson: I have lots of other questions, Chair, but I am conscious of time.

Mr Beggs: Thanks for your presentation. It is good to hear about the difficulties that you are facing because, ultimately, everything has to be solved. There has to be a solution. With regard to port infrastructure, has no planning permission been granted for those buildings yet? Do you still need to get planning permission, do the tendering and, then, do the actual build? With only six months, it is getting tight, I would have thought. Is it reasonable to say that?

Mr Bullick: Port operators have what are called permitted development (PD) rights. Obviously, the PD rights that were mentioned previously are key. The whole area of planning is its own science, as you know, but, on the face of it, if anything ever seemed to suit PD rights, it would be that sort of stuff because it is very traditional port infrastructure.

Mr Beggs: Does everybody have those rights?

Mr Bullick: Yes. We are all statutory undertakers for the purposes of PD.

Mr Beggs: OK. I want to raise the issues of Brexit and, dare I say, COVID-19, and their implications for passenger and tourist movement. Roger mentioned possible opportunities because people are nervous about getting on planes. Are you currently taking passenger and tourist traffic again, or is that still on hold? Where are we with that?

Mr Bullick: I cannot speak with any authority for ferry operators, but they are still operating passenger services: it is just that they have been massively impacted. Cargo traffic is down a bit, but passenger traffic has been completely floored, basically. In the Port of Belfast, we have also, effectively, lost our cruise traffic for the year 2020, which is, obviously, not good for the tourism economy. That is a direct effect of COVID-19.

17 Mr Beggs: With airlines starting to ramp up their business and trying to encourage international travel, there is nervousness about people getting on planes. Do you accept that there could be additional ferry traffic from tourism across the Irish Sea, and that there could be opportunities there in both directions? Are you looking at trying to delve into that? What social-distancing measures are you putting in place to give people reassurance and encouragement to travel by that means?

Mr Armson: Perhaps I can pick up on that, given that Larne is the port for P&O Ferries, if you are OK with that.

Mr Bullick: Yes, absolutely.

Mr Armson: With regard to ferry operations, the passenger business has continued right the way through the pandemic. Every operator reduced their capacity on board the ships down to around one third of what it would normally be. We went down to 140. I think that Stena went down to around 400 or something like that. That will be lifted gradually, but even when you look at the number of people who are travelling back and forth — off the top of my head, I think that it is around 1·7 million or something like that — and you multiply that by the passenger capacity, you find that there is plenty of capacity. Passengers may not want to go at the time when that capacity is available, but it will be there. Whether the airline capacity will be there, going forward, I really do not know. We will have the capacity to satisfy the demand. By "we", I am talking about the wider ferry industry.

Mr Beggs: With regard to people movement and Brexit, again, there is uncertainty, but there will not be a land border where people will have to show their passports. Have you been advised of the need for any ID checks for movement on ferries?

Mr Armson: My understanding — this was raised fairly soon after the vote took place — is that the common travel area will remain and there will continue to be free movement of people between the United Kingdom and the other members of the FTA. For example, a couple of years ago, I was in Gatwick Airport. I had forgotten my passport and that I was flying into Dublin and not coming back to Belfast. I showed the security guard my driving licence. I had to tell the security guard that, because I was going to Dublin, it was OK to show my driving licence. Whatever documentation is required, it will be minimal. We are not anticipating any disruption to passenger travel post transition.

Mr Holmes: It is a fairly moot point with regard to Warrenpoint because it has an unaccompanied freight ferry service. There are very few passengers on it.

The Chairperson (Miss McIlveen): OK. Thank you. Those are our questions at this stage. I appreciate that this was not, perhaps, in the ideal format today, but I hope that you all thought that you had an opportunity to comment and adequate time to answer questions. Certainly, from our perspective, I hope that, in the not-too-distant future, once restrictions have been lifted, we will be able to visit all the locations and have much more detailed on-site discussions. This is really the start of our engagement. Again, apologies for today's format.

On leaving, please, if you would, pass on our collective gratitude to all those around all your ports for the work that you have done over the past number of months to keep food on the shelves and so on. It has been very much appreciated. Certainly, in the early part of the lockdown, we were concerned about how that would play out. Of course, it has been seamless. Thank you very much for that and for being with us today.

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