There seems to be considerable optimism that new operators will move in to fill the gap left by Bell Lines following its move into liquidation yesterday.
The optimism is based mostly on the premise that container traffic elsewhere is running close to capacity and that 'nature abhors a vacuum and an empty terminal'. The optimism may be well grounded but nevertheless it will take some time before the status quo is restored if it ever is. Complex obstacles frustrated two credible rescue attempts and may plague a return to normality.
Waterford's shipping business is not robust. The original harbour in the city is a pale imitation of what it used be; some cruise liners, some trawlers. Waterford Harbour Commissioners (WHC) showed much vision when they decided to construct a Pounds 35 million container port three miles away on the Kilkenny side of the estuary and it opened for traffic four years ago. But the commissioners tied the new port's destiny to Bell Lines when it gave the company priority contracts and thus let the port become over-dependent (80 per cent of traffic) on one customer.
Bell Lines has operated out of Waterford for thirty years and was profitable for most of that time, but in recent years it has suffered really because of cut-price competition on North Sea routes. The opening of the Channel Tunnel made matters worse and last year's storms, which put both of the new port's giant cranes out of commission, was the nail in the coffin; losses were running at nearly Pounds 200,000 a week.
The two rescue packages foundered for a variety of reasons but the stance taken by WHC from the outset of the troubles was of fundamental significance. More than half of the cost of the port was contributed by the European Regional Development Fund but WHC remains in hock to the European Bank for Pounds 12 million repayment of which is guaranteed by the State. The scheme of arrangement in the first rescue attempt envisaged lower payments for rent etc by Bell and WHC feared it would become insolvent as a consequence. In addition, the Government objected to the virtual monopoly that Bell would have of the port. But the fundamental problem was the dependence of WHC on Bell and the port's need for Bell to maintain payments it could not afford.
With Bell out of the picture, WHC can now open negotiations with other shipping companies. WHC will be extremely fortunate if it can restart trade at all quickly and, ironically, it must now reconcile itself to a much lower income stream. The outlook for Bell employees is ominous despite the determination and dedication they exhibited when the company was under threat The liquidator has a most Intractable problem. He must endeavour to sell assets quickly but there are hauliers at the gates owed considerable sums who want, but cannot get, preferential payment. This could be a long, nasty liquidation. Hopefully not as long as that of Palgrove Murphy, a shipping company which collapsed in 1970. Its liquidation took 25 years to complete and the National Archives has expressed interest in the papers.