Monday, August 14, 2006

Development in Dun Laoghaire

Following the publication of my post of 31st July as a letter in the Irish Times, it drew the following response from the Harbour Company, published 8th August, which is followed by my response, also published in the Irish Times on 17th August.


Peter Molloy's interesting suggestion (August 1st) that the redevelopment of the public baths in Dun Laoghaire should be funded from the profits of Dun Laoghaire Harbour Company unfortunately ignores the commercial realities which the harbour company has to deal with every day.
His conclusion that the company is highly profitable is based on his analysis of its published annual accounts for 2002, which show a profit after tax for the year of €2.5 million. The harbour company's after-tax profit in 2005 was €2.7 million - a growth rate which has failed to keep pace with inflation in the intervening period. There is one very obvious reason for this: the decline in passenger numbers through the ferry terminal. In 2002 ferry passenger numbers amounted to 1,015,000; in 2005 the figure was 851,000.
Over the same period the company has had to deal with the rising cost of maintaining and repairing the harbour. The recent refurbishment of the lower level of the East Pier, for example, cost about €3 million. Work which is about to begin on repairs to the structures of both the East and West Piers will cost more than €10 million. The harbour company spends about €3 million a year on the conservation of the historic harbour as a public facility to be enjoyed by this and future generations - and it is committed to doing so for the foreseeable future without recourse to the taxpayer.
As we are a state commercial company which receives no funding from the State, we have to rely on our profits to generate the funds necessary to carry out this work.
This is why the company is pursuing new sources of revenue. The marina and the Crofton Road development are two very obvious examples of this. We expect the redevelopment of Carlisle Pier to be another. The company cannot contemplate the redevelopment of the pier without the realistic expectation that it will generate a reasonable profit.
Unfortunately, the Dun Laoghaire Harbour Company is not now and is unlikely, for the foreseeable future, to be able to contribute from its profits to the redevelopment of the public baths by Dun Laoghaire Rathdown County Council. However, the company does contribute €700,000 a year in commercial rates to the council. In addition, it contributes about €1 million a year to the State in corporation tax and VAT. Both figures are likely to grow substantially when Carlisle Pier is redeveloped.
This company already makes a substantial and growing financial contribution to the Exchequer and the county council. If the recipients of those contributions were to direct them towards the redevelopment of the public baths, most reasonable people would see this as a sensible and appropriate use of funds generated by Dun Laoghaire's waterfront. - Yours, etc,
MICHAEL HANAHOE, Chief Executive, Dun Laoghaire Harbour Company

My response, published 17th August:


Having been abroad, I’ve just seen Michael Hanahoe’s response (8th August) to my suggestion (1st August) regarding the possibility of cross-funding Dun Laoghaire Baths from the successful Dun Laoghaire Harbour Company. It is indeed nice to see an all too rare example in these Celtic Tiger times of the once popular irish tradition of “an beal botch“.

However, as chief executive of the Harbour Company, his desire to quickly insert a forty-foot pole between his company and the financial white elephant of a re-instituted public baths is entirely understandable. If the baths are re-opened in their current format they will continue to lose money. It’s a sad fact that most of the middle-classes who protested last year had probably never used the baths when they were open and will never use them if they’re re-opened.

However, a decision on the future of the baths is required and it is ultimately a political one. If the baths are deemed to need an ongoing subsidy then this must be provided from either local or central government funds. If neither is willing to commit to such a subvention, then the baths should be demolished to allow continuous public access along the seafront and/or the site to be used for some commercial purpose.

Last year’s protests have scared local politicians and the County Council is unlikely to propose any new initiative for fear of another backlash. Consequently, we could be faced with years, if not decades, of inaction on this bricked-up and derelict eyesore in a prominent location on Dun Laoghaire seafront.

The Harbour Company, on the other hand, has displayed a willingness to take commercial decisions and risk public disfavour, as exemplified by the selection of one of the less-favoured designs for the Carlisle Pier development.

If a commercially viable solution is required, then it might make sense to transfer ownership of the baths to the Harbour Company with a mandate to effect the necessary changes, even if Mr Hanahoe doesn’t want this particular political and financial monkey.

Regards etc..

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