The future perspectives for European sea ports Ports Conference - Barcelona, 7 May 1998 Neil Kinnock Member of the European Commission responsible for Transport I would like thank the Port of Barcelona for hosting this conference on the Commission's Green Paper on Sea Ports and Maritime Infrastructure. The fact that in the Commission we particularly wanted to have this meeting in Barcelona near a weekend in May will, I hope, bring us some credit for our consideration of the finer feelings of the people likely to attend. I have to say, however, that even if we were here on a wet Wednesday in February, we' d still have the opportunity to commend the benefits that have come from the reforms and projects put in place in the port in the recent years, such as logistics improvements and marketing promotions conducted around the world. They have borne fruit in many ways, including the new services from the Far East and South America and we wish the Port of Barcelona well in the future. Naturally my colleagues and I are very pleased to see so many people from the relevant industries all over the Union here today. That clear sign of interest in discussing the future of the European port sector, and that interest is also reflected in the fact that well over 100 written submissions have been received by my services since the Green Paper was published. Most organisations, industry partners and Member States have welcomed the paper and the opportunity to have a thorough debate on port related matters and, obviously, I'm gratified by that. As some here will know from our previous discussions, I decided back in 1996 that a Green Paper on Sea Ports and Maritime Infrastructure was essential simply because of my view that, even though Europe's export competitiveness in the global economy depends in many ways on a cost effective maritime transport system, and even though the EU port sector handles 90% of EU trade with third countries, ports had never received the attention that they deserve in the Community transport policy. To me, that seemed to be a serious omission and its significance was becoming more apparent because of two main developments that were well under way: Firstly, in recent years the Commission's transport policy has increasingly moved from focusing on individual modes of transport to a strategy which emphasises the need to develop a more balanced and integrated transport system that can provide sustainable mobility in the changing conditions of the next decades. Secondly, the completion of the internal market as well as the ongoing development of the inland transport networks across Europe has significantly intensified competition between ports. As a result, ports in different Member States are now competing for the same trade, more than ever before, while an increasing trend of commercialisation and participation of the private sector in port operations and investments has become evident in many maritime regions in the Union. This evolution has raised the question of the relevance and the desirability of a more co-ordinated approach to port development at European level to properly emphasise the crucial role of ports in the efficient functioning of the trans-European Transport Networks to foster conditions in which ports compete on sound commercial grounds. Against that background, it seemed to me necessary to clarify the main issues needed for development and to identify the areas in which useful legislative and other changes might be pursued. I know that few people would support the development of a centralised EU ports policy simply because the sector differs greatly from region to region and ports serve different roles and functions in the local and regional economies. I heed those views and consequently, I take this opportunity to emphasise that the purpose of an EU ports policy is definitely not to achieve uniformity among European ports. Diversity and the need to ensure healthy competitive conditions prohibits such rigidity in any case, and neither the Commission nor anyone else should ever lose sight of that. Our purpose is therefore to develop a set of coherent policies on individual port issues in order to help to maximise the overall potential of the sector and its contribution to European and World wide transport systems. In taking that approach, as everyone here knows, the Green Paper addresses three broad areas: Firstly, the need for various initiatives to improve port efficiency including better procedures, implementation of new technology, and fostering further co-operation in and between ports. Secondly, actions to improve infrastructure within and around ports in order to integrate ports into multimodal networks and provide adequate accessibility to peripheral areas. Thirdly, the need to ensure that the Community's responsibilities under the Treaty for providing free and fair competition are being met in the port sector. I will briefly try to set the scene for the discussion in the panels on the most controversial issues, and I will also address the matters where most concern and criticism have been registered in the written reactions to the Green Paper. I begin from the firm basis that the European Commission considers waterborne transport to be central to our efforts to promote free movement, competitiveness and "sustainable mobility" both within the European Union Single Market and, more widely, in our relationships with the rest of the World. That is not merely a declaration of good intentions - and I hope that is evident from the series of initiatives which the Commission has undertaken in recent times. In relation to actions in ports the Commission is, as many here will know, already working with the industry in order to promote the development of Short Sea Shipping by examining ways and means of streamlining procedures in ports; we already work to improve port and maritime safety and to ensure the protection of the environment; and we already support port and maritime projects under the Research and Development programme. All of these enabling activities should be maintained and I am confident they will help the sector. In addition, it is obviously important that the ports continue to contribute to advances, particularly in the efforts needed to achieve the best of quality in shipping. As everyone here will be aware, a substantial number of flag states are consistently ignoring or failing to implement and enforce international safety standards even when they have agreed to fulfill their responsibilities. Port State Control inspections are consequently regarded by us and by the people in the industry who do operate at good standards to be the best way to reduce substandard shipping in their waters. I would therefore like to urge the Member State authorities to meet their Port State Control obligations in order to ensure the inspection of at least 25% of foreign ships calling at their ports regardless of their flags. I am sure that Ports see the general benefits of such rigour and seek to fulfill their role in securing improvement. As everyone connected with Port activities knows, mulitmodality a concept practised in ports generations before it even got a name elsewhere is achieving greater significance as operators and users of all kinds work for extra efficiency in the whole transport chain. The full integration of ports and other terminals into the multi-modal trans-European network is therefore achieving increasing importance and, in the revision of the Trans European Network legislation which the Commission presented last year, we included a map of seaports and revised criteria for selecting projects of common interest. I emphasise that this new proposal certainly does not make a hierarchical classification of ports. It proposes a list of more than 300 ports in the Community by using objective, volume-based criteria and we are therefore not contemplating a restricted approach which would allow only the biggest North Sea ports into the defined Network. Instead we have chosen a method which ensures the inclusion of a high number of ports in all maritime regions, which takes into account the importance of linking the peripheral parts of the Union, and which can ensure a proper basis for the development of Short Sea Shipping. I'd also add that the advantage of having identified ports as part of the network is that it will be easier to see where those ports lack essential links to the land network. Obviously, one of the main impediments to activity is the deficiencies in port connections to the hinterland and, in order to help to achieve full integration of ports and maritime transport into the trans-European network, priority will therefore be given to projects which ensure better land side connections. Any assistance provided in the context of TENs is meant to ensure a "natural" flow of traffic across Europe to the benefit of the consumer and to remove bottlenecks and missing links. It is not to distort, or to give unfair advantage, or to penalise. I finalise this part of what I have to say relating to the infrastructure Network by highlighting one of the most important tasks that confronts the Community in the near future - the forthcoming Enlargement of the Union. The port and maritime sectors are obviously of importance to the economies of a number of those countries that are expected to join in the first column of accession, and substantial investment will be needed in transport operations and infrastructure before and after they join in order to ensure that their development is convergent with the rest of the Community. That will clearly impose very heavy pressures on them - and it will be to the mutual advantage of the industry in the existing Union and in the enlarged Union if those with expertise in the sector are ready with advice and experience to help to the advance of modernisation in all aspects of port activities in the new entrant States. I move now to what has not unexpectedly proved to be the most controversial issue in the Green Paper and that is the need to establish equitable competitive conditions the so-called "level playing field" -between and within European ports. The principle of free and fair competition clearly poses particular challenges in the case of the financing and charging of port and maritime infrastructure. As everyone here knows, practices vary significantly between and within Member States and the different levels of government and municipal involvement mean that it is often not clear whether the cost of investments in port and maritime infrastructure is, in practice, passed on to users through port charges. Considerations of equity, therefore, produced the Green Paper suggestion that there might be a case for introducing a Community framework to ensure that port infrastructure is priced in such a way that in the future users bear the real costs of the port services and facilities they consume. I was consequently pleased to see that most of the comments received from the industry and from the Member States strongly supported the basic principles set out in the Green Paper of providing fair competition between and within ports, of ensuring non-discrimination between users, and of securing transparency of port accounts. However, at the same time some have quite naturally expressed doubts as to whether the proposed Directive on charging is the right instrument for achieving these important principles. "Bureaucratic" and "theoretical" were the words most frequently used by those who raised this question. I am very pleased therefore to have this opportunity of allaying any misunderstandings. It has never been the intention to create a bureaucratic machinery controlled from Brussels. The proposed framework will obviously have to be flexible whilst at the same time ensuring that users of EU ports are charged on the same basis. That emphatically does not mean that all ports will in any way be required to apply the same tariffs, that would be unworkable as well as undesirable, especially since commercial considerations will, of course, always have to be left up to the individual port managements. I understand that some people and organisations interpreted the Green Paper as inferring that the Commission would draw up State Aid Guidelines for port infrastructure. I'm happy to provide reassurance on that point too. The Commission has not considered and will not regard public financing of port infrastructure which is open to all users on a non-discriminatory basis to be aid. That is, of course, completely consistent with the policy adopted in all transport modes and the Green Paper therefore suggests that the issue of distortion of competition should be addressed by the development of a flexible framework for port charging, not by some major and general revision of State Aid rules on infrastructure investment. In view of the great diversity within the port sector in the EU, the implementation of a framework will obviously require a step-by-step approach in order to allow for adaptation. This is particularly the case for the Cohesion States and Objective 1 areas where port development in general is lagging behind. Furthermore, the application of a Community framework to port charging and financing will have to be co-ordinated with the general approach to infrastructure charging and financing for all modes of transport. My services are currently preparing a communication on infrastructure charging in all modes, using the practical advice of commercial transport operators and users. As a first step in the port sector the Commission will launch an inventory on public financing and that will provide a useful basis for considering future actions. In addition, maritime infrastructure outside the port area needs particular attention. In the case of coastal aids to navigation we will have to establish the principles for charging systems that are related to the recovery of the development and investment costs of such aids, and it will also be necessary to develop a mechanism to equitably share the financial burden with users. For local aids to navigation within the port area and in its immediate vicinity, as well as for dredging and ice-breaking of approach channels to ports, the user-pays principle will clearly have to be examined with caution in order to take adequate account of the different geographical situations of ports. Another area where fair competition has to be promoted is in port services such as cargo handling, pilotage, towing and mooring, which make essential contributions to the efficient and safe use of port and maritime infrastructure. As some here will know, there have been complaints by users and potential suppliers about unfair practices in some Community ports in relation to such services and the Commission is currently examining such complaints on a case by case basis. It is in the general interest, however, to establish coherent provisions in relation to such matters and that is why the Green Paper suggests the development of a regulatory framework at Community level that, whilst promoting more systematic liberalisation of the port services market in order to ensure non-discriminatory access, also maintains an adequate level of safety and public service, which are particularly relevant for the technical nautical services. The purpose of such a framework would obviously be to establish conditions in which, irrespective of the regime, public and private port undertakings compete fairly in respect of port services of an economic nature. The comments received on the port services references in the Green Paper have been very encouraging and I expect real and relatively speedy progress that can lead to improvement in the overall conditions for maritime transport. That is necessary and it will be beneficial for the whole transport system. I hope, however, that the Port industry generally will use the widespread discussions that will continue about change and modernisation to draw more attention to the vital place of ports in the nexus of services required for a comfortable and productive modern life in every country, company and family. Outside the communities where the port dominates economic activity, ports have been taken for granted. The need to improve land side connections has often not received the deserved attention public awareness about ports as essential economic assets has not been effectively stimulated, and in too many areas policy has almost by-passed ports. Of course, I'm sure that this industry does not want to invite interference for the sake of it. But interest, understanding of the potential of ports and responsiveness to the needs of the industry are different things altogether. As globalisation develops, as the economies of Europe become more integrated, as business gives fresh consideration to waterborne transport as an alternative to, and a complement to, movement on land, ports deserve to gain greater prominence in public and political thinking and action. I hope that the Green Paper and the consultations generated by it has had, and is having the effect of fostering that response.