Articles

Chairman's Annual Statement

Year Ending March 2011

Introduction

Trading conditions throughout the year remained particularly difficult with no recovery in the port cargo tonnage throughput. However the leisure business held up well with further progress in controlling and reducing the cost base.

Also new business has been sought and won in providing marine and consultancy services thus providing additional sources of income.

Results

Cargo tonnage activity for the year was 410 Kilo tonnes (Kt) against an expected budget of 425 Kt. This compares with 402 Kt, 525 Kt and 631 Kt in the three previous years (2010, 2009, 2008).

Despite the disappointing tonnage the overall revenue from harbour activities grew to £441k from £404k from the previous year due to additional business and services provided outside the normal harbour operations as well as a small increase in dues and mooring charges.

The operating and maintenance costs showed a decrease of £21k. (The previous year’s figure included the cost of a major refit on the Teign C.) Much of this is a result of the recently implemented planned maintenance programme on the Commission’s vessels. However the costs do include an increase in the external dredging from £12k to £19k.

The net result for the year shows a surplus of £2,255 compared with a loss of £32,571 in 2009/10

This is no mean achievement against difficult trading conditions and reflects the significant progress in controlling costs while providing a better range of services and securing additional contracts and orders.

The Commission

The Commission continued to focus on its financial position and has made progress in reducing its dependence on its commercial revenues by building on its leisure business and securing additional business outside the normal operation of the harbour. The objective in the strategic plan of breaking even this year has been achieved but further work on the plan is required as future commercial revenues remain uncertain.

The condition and depth of the channel which is critical for shipping access to the harbour has been much improved with the contracting of the Mannin grab dredger to remove material from the vicinity of the bar. This was in support of the Teign C and the work she undertakes almost on a daily basis. Dredging in total is a significant cost to the Commission and is essential for the accommodation of the current build of short sea ships but also for all harbour users.

The Teign C also undertook a number of duties during the year in towage, ship movements in Dartmouth and dredging work on the Exe.

The Commission is very conscious of the services it provides to its customers and stakeholders and endeavours to improve these wherever possible.

Regular weekend patrols were maintained throughout the summer from April to October to provide support where needed and to ensure the safe operation of the harbour with its many activities.

To improve the interface and to provide information to harbour users, the office was manned and continues to be manned from 0900 hrs to 1700hrs (Monday to Friday).
An out of hour’s service is also provided and there is always a member of staff on call or duty 24 hours a day, 7 days a week, 365 days of the year .

More support was provided to mooring holders in assistance and advice on ensuring the safe mooring of their vessels. Also facilities have been provided for the disposal of engine oil and out of date flares at no charge.

The issue surrounding the deficit of the Pilots National Pension Fund continues to be a particular concern to the Commission. As indicated in the accounts in this year and previous years, Teignmouth pilots are a self employed group who are contracted by the Commission to provide pilotage services. Therefore their pension arrangements have been entirely their responsibility. However as previously reported the trustees of the fund have pursued this through the High Court. The judgement which is now subject to an appeal to be heard in November (2011) has found that vested in the trustees is a power which enables them to recover the deficit against harbour authorities whose pilots, like ours, are self employed. The liability for Teignmouth is not known but is considered to be significant. Every measure continues to be taken politically, through the ports industry and trustees on this grossly unfair judgement to ensure an equitable solution which does not disadvantage the smaller ports.

The IRIS surveillance system integrating radar, AIS and CCTV has proved to be highly successful in providing full visibility of the movements in the harbour and its approaches.
It has greatly assisted in the management of the harbour and has enabled a faster response to and analysis of incidents.

Consultations have taken place throughout the year with the Consultative Body and the many clubs and associations and harbour users in order to pass on information and requests and receive important feedback.

Performance Management is continually exercised with regular staff appraisals and training.

The Commission was delighted to appoint Keith Richards and Richard Lord as Commissioners from the first of January. Both bring considerable experience with them in their particular fields. Keith has a strong finance background and latterly had board responsibility for business planning and regulatory reporting for South West Water.

Richard has held the rank of Commodore in the Royal Navy and has had the responsibilities for the management of the naval bases in Gibraltar and on the Clyde. Since then he has been employed in the defence industry. He was born in Teignmouth and his Grandfather was Fred Seeley, a well respected local fisherman.

These appointments are to replace Peter Robinson and Colin Greenwell who have retired. Colin has been co opted for a further year to manage the ongoing issues with the Pilots Pension Fund. He has been appointed as the UK small ports representative on the Association of Participating Bodies of the Pilots National Pension Fund as well.

Steve Astbury was appointed Vice Chairman of the Commission on Colin Greenwell’s retirement. The Commission is most grateful for both Peter’s and Colin’s contribution over the years as both oversaw the transition from the original representative body to a full Trust Port organisation which included the harbour revision order.

Two commissioners were re appointed for a further term.

Major Events and Issues

Cargo tonnage continued to be a major concern with the reduction of ball clay shipments through Teignmouth. This has dropped from 400k tonnes to 200k tonnes in the last three years. This is clearly not all attributable to the present economic situation and it is suspected that some of this is being shipped through Plymouth. Several representations have been made to Sibelco by both ABP and the Commission who admit that there are advantages of consolidating shipments of both ball and china clay on larger ships despite the increase in truck road mileage. However Plymouth commercial ports have the benefit of being subsidised by the MoD who cover the major conservancy costs for the Plymouth approaches and Sound. None of these costs are cross charged to the commercial operators. This issue of unfair competition has been raised with the respective Ministers in the MoD and Department of Business Innovation and Skills via the Teignbridge MP without much success to date.

There were no shipping incidents in the year which reflects an excellent safety record.

Current Year and Outlook

Trading conditions remain tight and tonnages are currently 37Kt below the forecasted budget for the first five months of the current year. This is of some concern as without a recovery in the latter part of the year will impact on the Commission’s revenue.
ABP, the port operator is actively seeking new business through the port and is working closely with the Commission in providing an optimum service for existing customers and shippers.

As emphasised in earlier statements, the Commission is actively pursuing strategies to build alternative revenue streams so it becomes less dependent the commercial operation.

Incrementally much progress has been made but it is essential that this work continues at a pace with the potential investment of part of the Commission’s capital fund whilst protecting the monies assigned for vessel replacement. One of the Commission’s key performance indicators is the return on capital employed which is detailed in the accounts. This will be a measure of progress and success in this endeavour.

The Commission have won contracts with ABP to provide Dockmaster services at the Millbay Docks in Plymouth and at Teignmouth Docks and with Exeter City Council in providing Marine Adviser services covering the River Exe and the Canal.

The leisure business is holding up well and much attention is being made to improve and to provide a wider range of services. There have been many visiting yachtsmen during the summer who have enjoyed their stay in Teignmouth.

The Commission is supporting several community projects one of which is the training of the Sea Cadets so that they can undertake harbour and river patrols under the direction of the Harbour Master.

I am grateful to the Harbour Team for their continued commitment to the many challenges in running a harbour not forgetting the Pilots, Commissioners and customers for their continued support.

Jeremy Grammer Chairman.

19.9.11

Also available in PDF format: Chairman Statement - Year ending March 2011