ANNUAL REPORT 2003

A year on from its last Annual Report, no progress at all has been made on two key maritime issues which influence the environmental and operational effectiveness of UK ports, according to Milford Haven Port Authority.

Unveiling its current Annual Report, for the year to December 2003, the Authority expressed its disappointment and frustration that no public moves had been made to eliminate a contradiction in the laws relating to salvage.

The potentially damaging “Catch 22” situation was first raised at Government level in 1998 by Lord Donaldson in his Review of Salvage and Intervention and their Command and Control.

Lord Donaldson pointed out that if a salvor, in salvaging a stricken vessel, caused pollution, he could be prosecuted under the Water Resources Act 1991. However, if that salvor refused to undertake the salvage operation because of this risk, he could also be prosecuted under the Merchant Shipping Act 1995.

In its 2002 Annual Report, the Port Authority was critical that nothing had been done, and has again renewed its deep concerns a year later.

“There has still been no public move by the Government to take any positive action on Lord Donaldson’s recommendation to amend the Water Resources Act, and the UK coastline remains at risk in the way that he identified,” said Ted Sangster, chief executive of Milford Haven Port Authority.

A second unresolved frustration for the Port Authority remains the difficulties of undertaking routine and necessary dredging projects in the Haven because of the increasing regulatory processes that all UK ports are now having to face, unlike many other European ports.

“At present this requires expensive and time-consuming environmental impact assessments on the effect of the work both at the site and at the sea location where the spoil is tipped on each and every occasion that some dredging is required,” said Mr Sangster.

“Whilst ports accept that such processes are necessary for new developments there is frustration at the lack of acceptance that, just as a road or a railway line needs regular maintenance to retain capacity and safety, so operating a port will require regular maintenance dredging to support continuing operations. The lack of co-ordination between and the under-resourcing of the various agencies involved in obtaining a dredging licence, the demands for impact assessments before and after dredging operations and the treating of each dredging programme as a unique event rather than part of an accepted programme places a straight-jacket on our operations by increasing costs and introducing bureaucracy and delay in the process. This inevitably impacts on the effectiveness of our port operations, and despite constantly raising the issue, another year has gone by with no progress.”

Whilst the group made a loss of £222k in the year on a turnover of almost £14m this was after making an extra payment of £500k into a staff pension scheme where an actuarial review had indicated a degree of under-funding. In addition discontinued operations made a loss of £180k – these two loss making activities (Swift Construction and the Milford Fish Auction) were closed in the year as a strategic review of their future prospects indicated that there was little chance of a return to profitability.

The group also continued its investment in property developments, such as the Cedar Court office construction in Haven’s Head, with a net £1.9m expenditure after grant.

With an increasing programme of such developments and a record of capital spend in excess of £40m over the past decade or more on major development works a new division within the Milford Docks Company was formed during the year to oversee all the Port Authority’s property and development work. Quayside Estates’ role is to manage the in-house development of residential, retail, commercial and industrial facilities, and undertake estates management and marketing.

Plans for the development of two LNG terminals on the Haven continued to progress during the year. Dragon LNG, which is a partnership between Petroplus, British Gas and Petronas are looking to establish a 3.5m tonne pa capacity terminal on the Petroplus site, whilst Qatargas – a partnership between Exxonmobil and Qatar Petroleum – plan a terminal at South Hook with twice this capacity on the site of the former Esso refinery. The marine management and pilots of the Authority have been working closely with both project teams in a technical appraisal of the way in which their shipping requirements can be most effectively managed.

Milford Haven’s natural deep water and its experience as an oil port have made it a natural focus for imports of this fuel of the future, and once both LNG terminals are in full operation some 30% of the UK’s supplies of gas will come through its facilities.

Ted Sangster said that in summary there were many challenges – commercial, financial, environmental and statutory – which faced ports in the UK such as Milford Haven.

“UK ports are essential to the nation’s economy, and the fact that we have one of the most successful port sectors in the EU, and that many successes can be demonstrated by Milford Haven over the years, is an indication that ports can – and do – manage such challenges.

“Increasingly, however, with greater Government interference and regulation, the expectations of society, and the ever-increasing raft of EU requirements, there is a need for increased and improved partnership to ensure the best is made of such an important sector of the UK’s economy. Neither ports, government or other social or economic players can achieve success nowadays by working in isolation.

“At Milford Haven, we can demonstrate the value and benefits that can be brought about as a result of effective partnership, particularly with the significant opportunities with LNG that lie ahead.”