Siim Kallas at European Sea Ports Conference in Varna: Making the most of Europe’s ports to drive trade and growth

European Sea Ports Conference, Varna 31-5-2013 — / — 

Ladies and gentlemen,

It’s a pleasure to be back at ESPO’s conference and speak at such a vital time for Europe’s port community. One year ago, in Sopot, we were still in the middle of discussing the sector’s problems, working together to make the most and best of our ports. It has been a long haul!

We have listened and consulted extensively with ESPO, its individual members and the port industry. I am convinced we have found a good balance between the wishes of the many parties involved. You will see our work reflected in the proposal which has received the full backing of the European Commission.

Europe’s ports have certainly seen some difficult years. But even with only modest assumptions of growth, port cargo volumes should rise by more than half by 2030. That will almost certainly cause congestion.

With more cargo passing through ports, we will be working to get trucks off the roads and make more use of short sea shipping as a cleaner transport alternative.

But much as we want growth and demand, we must also ask where it will leave Europe’s hundreds of ports. They will face major challenges in performance, investment needs, sustainability, human resources, just to name a few.

While Europe is home to some of the world’s best port facilities, efficiency and performance vary a lot, causing a real EU divide. Take Rotterdam, Antwerp and Hamburg, which handle 20% of all goods.

I know that performance is one of ESPO’s major concerns. In no way are we trying to interfere in good business practices. But my concern is that not all ports offer the same high-level service.

Let me be clear: this is not about diverting traffic away from some ports to others. It’s not about telling customers which ports they should use.

But it is about creating better conditions so that we have more short sea shipping connections and for all ports to be fully integrated in the logistics chain. Even the best performing ports need other ports to be successful, for example to develop hub-and-spoke operations, and avoid congestion.

What does this mean? It means that we have to:

  • improve local connections to road, rail and inland waterways networks that feed into ports;
  • fully optimise services to make the best use of ports as they are now;
  • create a business climate to attract the investments that are so badly needed if capacity is to expand, as it must do. Investors need legal and regulatory certainty, and much less red tape.

Unlike other transport sectors, the EU has almost no port legislation: on access to services, financial transparency or charges for using infrastructure. One thing that has become clear over the years is that the “business as usual” scenario will not allow the market to solve these problems.

Ladies and gentlemen: we are now at a “maritime crossroads”.

Our proposed policy review focuses on the seaports of the trans-European transport network – 319 ports, which together account for more than 90% of passengers and goods transiting through the EU ports system.

We will make full use of the future TEN-T guidelines and its financial instrument, the Connecting Europe Facility, to develop ports and improve their connections with the rail, road and inland waterways networks.

The proposal does not aim to create more administrative burden or cost. In fact, not only will it simplify and cut red tape, it should reduce port costs by almost 7% and save the EU economy up to 10 billion euros by 2030.

It should also generate more business for short sea shipping. That means more port activities and therefore a significant number of new jobs.

So what exactly is the Commission proposing?

Firstly, this is a combination of legal and soft measures. It focuses on where the EU can make a difference – it builds on existing policies and respects the diversity of Europe’s ports. And it only tackles specific problem areas that need to be changed.

We have achieved this with ESPO’s help and input throughout the preparation of the policy review.

I hope that many of you will come to Tallinn in October for the TEN-T Days event, which will kick off the programming of the budget available for the TEN-T.

A specific session on ports and Motorways of the Sea will be held on a ship sailing from Helsinki to Tallinn on October 16.

Freedom to provide services, with no discrimination, should become a general principle. This is in line with the principles of the EU single market, in which I am a strong believer.

At the moment, it is not easy to challenge monopolies and exclusive rights granted under national law.

We propose new, transparent and open procedures to select service providers, with rules to prevent possible price abuses by operators with exclusive rights.

In cases of space reserved as part of a port development plan, or public service obligations (PSOs), the responsible authority should be able to limit the number of operators. Selecting the operator should be transparent and non-discriminatory.

We have been careful to incorporate ESPO’s views on minimum requirements that may be imposed on a provider, so as to reflect actual working practices, to avoid cherry-picking.

We have also clarified cases where the number of providers can be limited, where PSOs can be imposed and where an internal operator can offer a service.

Transparency of financing must also be improved to avoid distortions of competition and make clear where public money is going. This will attract private investors, who need long-term stability and legal certainty.

Under today’s rules, many ports receiving public money do not have to keep separate accounts between their economic activities. This makes it hard to follow the funding streams and ensure there is no breach of state aid rules.

In any case, public funding should not be used to distort port charges for using infrastructure, which should be set in a transparent and non-discriminatory way.

Port authorities should be more autonomous and set charges themselves, according to their own commercial and investment strategies. But this must be done fairly and transparently. EU law should be clarified to allow ports to vary charges according to their own policy – for example to attract short sea shipping, or for ships that have a better environmental performance.

Ladies and gentlemen,

I know some of you have concerns about the proposed supervisory body. But this is not new. It already exists in many Member States. It will provide a forum for a first-instance appeal; it is meant to reduce the administrative burden for solving disputes and keep them out of the courts, if at all possible.

Lastly, as in many other economic sectors, staffing needs in ports are changing rapidly. An increase of one million tonnes of cargo passing through a port creates an average of 300 more jobs. By 2030, we expect 15% more jobs – so there is a clear need to attract workers.

Modern port services and a stable environment must also involve modern organisation of work and social provisions.

Experience in Member States which have implemented port reforms show that full and open discussions on work-related issues between employees and employers can make a real difference.

This is why we are creating a special committee for ports – the ‘social dialogue’ committee. It should first be given a chance to see what can be achieved. We will assess its progress in 2016.

Ladies and gentlemen,

Our proposal puts ports at the top of the European Union’s policy priorities for transport. Of course, discussions at the European Parliament and between Member States will still allow for some fine-tuning.

Some of you may believe that this is just making rules for rules’ sake. That is not the case. In fact, our intention is to be light on regulation. We don’t want to impose unnecessary red tape – we want ports to grow.

We want more funding for ports, more activity and prosperity for port industries.

Most importantly, we want European ports to enjoy long-term success – so that they can deliver a better service to European industry and Europe’s economy.

Thank you for your attention.



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