 Rhaon Rhaon Rhaon Rhaon I welcome everyone to the fifth meeting in 2015 of the Infrastructure and Capital Investment Committee Everyone present is reminded to switch off mobile phones as they do affect the broadcasting system As meeting papers are provided in digital format, you may see tablets being used during the meeting The first item is to hear evidence on the draft Scotland Act 1998 modification of schedule 5 order 2015 from Derek Mackay, the Minister for Transport and Islands and Brendan Rooney, road safety policy officer at Transport Scotland. This instrument is laid under affirmative procedure, which means that the Parliament must approve it before the provisions may come into force. Following the evidence session, the committee will be invited to consider a motion to approve the instrument under agenda item 2. Can I welcome the witnesses this morning and can I invite the minister to make any opening remarks? Thank you, convener, and good morning, committee. Thank you for the opportunity to set out this Government's reasoning behind the measures that you are considering today. This is an order made under section 30 of the Scotland Act 1998 to devolve legislative competence to the Scottish Parliament in respect for the provision of seatbelts on school buses. The safety of Scotland's children and young people is a responsibility that we all share, and as Minister for Transport and Islands, it is my resolute belief that the journey to and from school is a key consideration in those efforts. When parents wave their children off to school in the mornings, they expect all of us with responsibilities in this area to do everything that we can to ensure that they are cared for and kept safe. That is why, in March last year, my predecessor, Keith Brown, announced that the Scottish Government intends to introduce legislation to ensure that seatbelts are provided in all dedicated school transport in Scotland. I am glad that local government also shares endeavours in this important safety measure, with 17 councils in Scotland already stipulating seatbelts as a condition in dedicated school transport contracts, and a further six, in some provision, such as vehicles carrying primary children. Around 85 per cent of dedicated school buses in Scotland currently have seatbelts fitted, however, we are clear that all children on dedicated home-to-school transport should benefit from this important safeguard and intend to bring forward legislation in the next Scottish Parliament. We have reached agreement with the UK Government on the terms of this Scotland Act order, and I am pleased that the process has now reached a stage where it is before committee today, following passage at the Delegated Powers and Law Reform Committee last week. Although formal consultation and such associated legislative considerations are still some way in the future, we have taken the early opportunity to work closely with local authority partners and other key stakeholders. Transport Scotland has set up the seatbelts in school transport working group to help to prepare for smooth transition and to look at best practice for ensuring children wear seatbelts when they are provided. The aim is for this order to be approved at both Holyrood and Westminster before the UK general election and for it to be made at the first available privy council in the summer. Those are the steps that the Government is taking to ensure that we are well placed to take forward our future plans and invite questions from the committee members in terms of the section 30 order. Thank you minister for that opening statement. Can I now invite members to ask any questions that they may have on the order? I just wanted to put on the record perhaps that the minister would agree that we should thank the petitioner who did all the work for many years on road safety and thank also the work that the Petitions Committee has done on that particular issue. Perhaps we should declare an interest to the formal convener of the committee, but I think that it is a good example of how ordinary petitioners can go ahead and raise issues of concern and get some action on that. As you know, the Petitions Committee was heavily involved with the UK Government as well and I am very pleased that the section 30 order has been agreed. I think that safety to and from school is vitally important and it is a great initiative and I will strongly support it convener. I have no real issues with the order that we have in front of us. I wonder whether the minister would at this stage be able to give an indicative timescale of completing the process of putting regulations in place. Can I say first of all to go back to David Stewart's comment around the success of this Parliament? I think that that is a fair comment that a petitioner, citizens of Scotland, can raise matters of importance to them in the very heart of our democracy and we can take forward that where we have the power. Even in this instance where we did not have the power but seek it to deliver on those aspirations, I think that that is a fair comment. Of course, even the section 30 order is very specific, so we will only be able to set the rule around the application of seatbelts but not necessarily the specification of what kind of seatbelt because there is a particular request around three point seatbelts. It would be better if we had greater power to be able to be more prescriptive but maybe we can achieve that through guidance rather necessarily always legislation. There are other measures that I would want to take forward as well as transport minister such as improved signage on school buses, which another petitioner to the Parliament has raised. Another example where this Parliament, I as minister, do not have the power to make that decision but will continue to pursue that with UK Government. In addition to the Smith commission and the general election and the work through the command paper, there are other areas that we will want to pursue on a cross-party basis, further powers to be able to make our young people even safer. That was a consensual point to take forward the agreement around the principle there around empowerment. In terms of Alex Johnson's point about timescales, if the power was achieved, the earliest we could introduce legislation would be in the first year of the next session of the Scottish Parliament because of the time that it would take for the order to go through approval of the Privy Council. It would really be a matter for the next Scottish Parliament. This Scottish Government has committed to introduce legislation very quickly and to achieve that timescale of implementation for 2018 for vehicles transporting primary school children in 2021 for vehicles carrying secondary pupils. To achieve that, we would have to bring forward legislation in good time. You may also put the point that it is not presumptuous that this Scottish Government will be the next Scottish Government. I think that even because of the level of cross-party support, any party would surely want to continue with this legislation, having had the power to do so, and with the cross-party support that the policy seems to have. I hope that that gives further clarity on the timescales around legislation. Do members have any further comments or questions for the minister? In that case, we move on to the second agenda item, which is the formal consideration of motion S4M12372, calling for the committee to recommend approval of the draft Scotland Act 1998, modification of schedule 5 order 2015. Can I invite the minister to speak to and move motion S4M12372? Happy to move. I think that I have made the case in the comments unless there is any further discussion required. Are there any further comments or questions from members? I put the question on the motion. The question is that motion S4M12372, in the name of Derek Mackay, be approved. Are we all agreed? That concludes the consideration of this affirmative instrument. We will report the outcome of our consideration to the Parliament, and I will now allow a short suspension for changeover of witnesses. I thank the minister and his official for the attendance and evidence this morning. Thank you. Of the infrastructure and capital investment committee, the third item on the agenda today is for the committee to take evidence on its freight transport in Scotland inquiry, and this week the committee will hear from port operators. Can I welcome Charles Hammond, chief executive officer at Fourth Ports, David McGinlay, director of commercial marine at Babcock international group, Colin Parker, chief executive of Aberdeen harbour, and John Patterson, chief executive officer of Montrose port authority. Good morning, convener, ladies and gentlemen. I'm happy to make a very general statement just to kick things off. As you've said, I'm the chief executive of Fourth Ports. We are the third largest ports grouping in the United Kingdom. Our business is split roughly 55 per cent, London and 45 per cent in Scotland. We handle just under 40 million tonnes of cargo, of which about 26 million tonnes is handled in Scotland. We do operate seven ports and terminals in the Forth and Tay estuaries, a number of regional ports, and I would argue a national port, which is the port of Grangemouth. We're involved in a number of different projects, where I suppose the key thing to say to you is what we're trying to do for Scotland is support the key industries in Scotland, so the food and drink sector, the agricultural sector, the chemical sector, North Sea oil and gas sector, these are all important industries for Scotland. We seek to support them in the infrastructure facilities and services that we deliver. I'll be very happy to answer any of your questions in more detail as we go along. Okay, thank you very much, Mr Hammond. Perhaps we could kick off then by asking each of you in turn to providers with an overview of the ports that you represent, port or ports that you represent, and their significance to the wider Scottish economy. Perhaps I could start with Mr Paterson. Thank you very much. I'll start with the smallest first. The port of Montrose is a small port by comparison to my colleagues on my left here, but it is of particular importance for the county of Angus, Perthshire, Southern Aberdeenshire and Fife. It handles cargos of some 600,000 tonnes per annum, and the main cargos are boxes of import of fertiliser, of pulp for the paper mills, of grain both ways in port and export, dependent upon the successes of the harvests in the area. The fertiliser is probably the largest industry that we support in Montrose itself. There are two blending companies of fertiliser in the port, and that is the most important industry for us on a year-round basis. There are other seasonal productions of exports that we have with round wood and the crops that arise out of the agriculture. We also have a significant business in scrap metal iron, both outward and inwards. Then we have the oil-related shipping. Much of it does not carry a lot of cargo, but it is a very important visitor to the port, because there the larger ships do all their crew changes, so there is quite a throughput of personnel in and out of the port. It has made the port particularly busy in the past three years, since late in 2011, when we were able to complete the rebuilding of a key that had collapsed way back in 2003. The throughput has doubled in the past seven years, since we have done those improvements to the port. That is the general outlook. That is helpful, Mr Parker. Aberdeen Harbour, like Montrose, is a trust port—a single-entity port, unlike Charles's group. We are the main commercial port serving the north-east of Scotland. We had roughly 8,000 vessel arrivals last year, around about 4.7 million tonnes of cargo. Links with 41 different countries, that is cargo arriving from or departing to through Aberdeen, so it is an international hub. A lot of that is oil and gas related. The principles support harbour for the North Sea and west of Shetland. We have scheduled services to West Africa to companies operating schedule services, so we average somewhere between four and six sailings a month to West Africa. Another busy trade at the moment is supporting the drilling operations at the Falkland Islands as well, so there is a cargo ship due shortly, which will be about our fifth this year, heading for the Falkland Islands. We have our lifeline ferry services, operated by Circo Northlink, linking us with Orkney and Shetland, which provide vital services like supplies for the supermarkets and the fish farms in the north Niles, as well as a freight service operated by Streamline, but also bringing down livestock from the northern islands and roughly about 155,000 passengers a year use the ferry. We have scrap metal imports to a small extent, but significant scrap metal exports. Calcium carbonate slurry comes into Aberdeen harbour and goes from the harbour by rail and by road to all over the UK, coatings for the paper industry. We have some cruise vessels, not many, but I think we had 10 last year and we're expecting roughly the same or slightly more this year. We export timber as well, round timber to the Baltic States. The other thing that we're heavily engaged in is an expansion plan for a bay just to the south of the existing harbour. We're looking at today's cost, roughly about a £320 million expansion plan, to meet the demands of our customers. For the last four and a half years, we've been working on this plan. It's been recognised by the Scottish Government under the national planning framework 3, which is being strategically significant for Scotland. We're currently engaged in an environmental impact assessment for that, shortly building a physical scale model. All being well, we hope to start construction in 2017, completed by 2020. That's the main summary of Aberdeen harbour. Okay, thank you. Mr McGinlay. Good morning. We're kind of the exact opposite. We're a large engineering support business with a dockyard and a port attached to it. In that sense, the port operation is not our main business, however it is becoming far more of a strategic requirement for us as we see the move away from ministry of defence work and further into commercial activity. In terms of commercial activity on the site at the moment, we are about to deliver the back end of quad 204 for BP, which is undersea and subsea work for Shahalyan field. We are engaging in a number of other large fabrication jobs for the ministry of defence. Clearly, we still have on the site till 2018 the two aircraft carriers, Queen Elizabeth and Prince of Wales, and that's taken up a considerable amount of our time in consuming a fair amount of our facility. Within the port itself, we deliver aggregate salt. We take cargos through wood. We delivered a number of large windfarm jobs last year, about 180,000 tonnes of windfarms. We are also supporting the oil and gas support vessels for the North Sea, so we are taking refit repair and maintenance jobs from them. Key customers in that area are the likes of Shell, Helix, Bibby, Fugro, BP and subsea seven. We are establishing ourselves in that market in a fairly strong and positive way, but, as I said, it is early days for us yet, but we are moving forward in that area. The ports are difficult to cover briefly, but if I start with Grangemouth, Grangemouth is clearly strongly integrated with the refinery there, and we are heavily involved with INEOS and the new project to import ethane to make that chemicals business more viable for the future. Grangemouth is Scotland's largest container handling facility. Many of the whisky exports that are going out to all areas of the world are going through Grangemouth. We are looking very carefully at expanding the capacity in the facilities at Grangemouth, which will involve dredging and deepening new equipment, new IT systems, all of which will take Grangemouth's capacity well into the 220,000 boxes plus from a current level of about 155,000 containers. Some major investment plan is equal to other ports at Dundee. David Scott mentioned some of the North Sea Oil and Gas fabrication work. We have a similar setup at Dundee, although our main business is the port's business. We are carefully looking at an expansion of facilities there, key site facilities and fabrication facilities, not only to support North Sea Oil and Gas, but in the long-term future capable of handling load-outs for the offshore renewables industry. Similarly, at Leith, we are also heavily involved there in the North Sea Oil and Gas servicing, demobilisation, fabrication, support services, many vessels call at Leith, and again we are considering a major project to free up significant areas of land at Leith to facilitate decommissioning and similar types of work. We support agriculture throughout our ports and, obviously, at Recith, we also handle the Recith Zebrugaf Ferry. That is a very brief overview, happy to go into any more detail as we go along. It is evident from what each of you has said this morning that ports are integral to other economic activities that are taking place in Scotland and perhaps to unlocking Scotland's economic potential in the future. Have any of you undertaken an economic impact assessment of the economic footprint of the ports in terms of any direct jobs and what the economists refer to as induced effects? Is that something that you have done or considered doing? As part of the study into the feasibility of Nick Bay, Scottish Enterprise commissioned a company to do an economic impact of the activity related to a harbour being in Aberdeen. I am not saying that all this activity operates through the harbour. It came away with the figure of 12,000 full-time equivalent jobs and 1.5 billion GVA. That was the figure. There is a wider figure that the British Ports Association commissioned Oxford Economics to do for the whole of Scotland as well, but I think that the British Ports Association has already provided those details to you. Anyone else? We have done an economic impact study, but it is based on the whole of Babcock in Scotland as opposed to what essentially the port might sustain. Just to use the same format as Colin, our studies have shown that we contribute about 2.37 billion of GVA through our ports, and the equivalent figure in terms of jobs is 13,051. Mr Paterson. In Bontrol, the figures are much smaller, but we certainly comply with all the requirements, particularly when we are raising finance for developments, both public sector finance and borrowed finances. We are all very conditioned to doing that for major projects. Can I ask you, in turn, to address the issue of infrastructure and how you describe the current infrastructure surrounding your port and how well that serves the port users and give the committee an indication of the levels of investment that are going into infrastructure at the moment and over the coming years? Where do we go from this end? Annually, as a group, we invest roughly 30 million a year in our business directly, and about half of that goes into our Scottish ports. That is direct capital investment as opposed to anything that we spend on training, health and safety and other services. In terms of looking at projects and infrastructure requirements, I have mentioned the deepening and the new equipment at Grangemouth, so we would be earmarking at least 20 million plus for those kind of projects, for Dundee, potentially up to 15 million in phase 1 at Dundee and another 10 to 20 million at Leith as we go forward. We are all privately funded. Our shareholders effectively represent a number of different UK-Canadian and European pension funds. We are securely financed and we have the capacity to invest in all the infrastructure improvements that we are considering, which are all privately financed and which, I believe, is the right model for expanding a port's business. In terms of our investment at Versaith, it is a combination of Babcock and up-to-now MWD funding. We have covered off a 1,000-ton Goliath crane. We have widened the direct access to the port. We have also widened one of the docks to accept the aircraft carrier. We have put in a brand-new pump stationing. We have put in modular transporters a new forklift and crane fleet. We have now a traffic management pedestrian safety initiative, which is a considerable amount of money as well. In terms of a living kevy shore supply, we have put that in also. That comes up to a total of about 100 million of Leith, of which 40 to 45 million has been Babcock investment in Versaith. Since the arrival of oil and gas in the North Sea about 50 years ago, we have virtually rebuilt the harbour. More recently, we have spent about £33 million renewing the burst on the south side of the river. We have spent £5.5 million deepening and widening our navigation channel, but there are many other projects in the years before that. Again, funded by ourselves with no borrowings, we have been able to virtually rebuild the harbour in that period. Any expansion plans? The major expansion plan is the £320 million expansion into Nick Bay. That is what we are currently focused on at the moment. We are well down the road in our feasibility study. We hope to be in a position to make a decision sometime next year. In the last five years, we have firstly invested in a project of £8 million to rebuild the keys that had collapsed on the south side of the harbour, for which we did get a significant grant assistance through the freight facilities grant of £3 million. Since that time, we have also been able to increase the trade to the extent that we have been able to build a new birth basically to replace one that was in poor condition on the north side of the harbour. That does cause us to have to borrow, but the business is such nowadays that we can afford to repay it. What is the figure for that? £8 million. Thank you. Mike, you have got some questions. Thank you, convener. We have heard of some of the success areas, oil and gas, whisky and other things, but given the variety of cargo that is capable of being transported by sea, what areas do you feel maybe where there is scope for improvement to carry other cargos by sea that are perhaps not carried at the moment? Are you happy for me to lead off on that one? I think one of the things, when you look at Scotland's population and we see this, it's interesting, we can contrast this with the port operations that we run down south where you have 25 million people virtually within an hour to an hour and a half's distribution and ports tend to work on the basis of population. In Scotland, obviously, we only have something like two and a half, three million people in the central, five million people in total, so, for me, it's important that we are exporting to punch above our weight. That means that we have to give any industry in Scotland a tight supply chain, regular services and good infrastructure as well as the possibility of logistics-related services. For me, the type of thing that we would look to do is to build. There is a new term in our industry called port-centric distribution. All that really involves is trying to take stock costs and distribution costs out of the system for industries that either want to export or import. For us, building warehouses and connecting those warehouses and facilities with the regular container services that we handle at Grangemouth, we have nine sailings a week at Grangemouth, so there is a very regular way of getting your goods to market to either Rotterdam and Twirp, to Felix Stowe or a number of other ports that can then distribute worldwide. I would say that it is an improvement of those kind of links that are important for the industries in Scotland. Thank you. Do any other gentlemen see any possibilities of expansion into new areas or increasing trade that goes out through our ports in general terms? As the oil and gas expertise in the north-east of Scotland grows and becomes better established and the scope for the projects that I have mentioned, such as the west Africa services, that is going round into east Africa now as well and elsewhere in the world, there is always scope for more of that to happen in the future as well. I would also endorse what Charles has said as well, providing better container services to stop the drift down to Felix Stowe and Southampton where possible. Yes, it is very encouraging to hear from Montrose that trade has doubled through the port. That is encouraging enough short period of time. Yes, well that is because we went out and marketed the facilities that we had after improving them. It was in need of marketing, I must say. Now that I have almost completed that job before I retire, another marketing person can take over. Just to say that, we have been successful in taking lorries off the road in persuading importers and exporters to operate by sea rather than by road. We see that as an important element. That is similar, a good note to retire on that kind of success. From Babcock at the size point of view, we are all about finding innovative ways to move large structures around that particular river and under those three bridges that are going to be there now. The more innovative we can be in that direction, the more work we are going to bring into the facility. That is the real challenge for us. Thank you. The committee has been undertaking a series of visits to ports to gain a bit of insight and understanding. A bit of a week ago, we were out at 4th Ports in Green's Mouth. To be honest with you, Mr Hammond, I was really quite disappointed. We understood, we were led to believe that the kind of investment that there has been is two, three million a year over recent years. It looks to me like a third-world facility. I was actually quite embarrassed. Surely the kind of order of investments that are required is something more in order that we are hearing proposed for Aberdeen. That is the kind of scale of investment that is required to make that port fit for purpose in terms of competing with ports across the world in other countries. It is interesting that you say that, and I am sorry that you did not get the right impression, because if you asked the customers at the container terminal, we are achieving productivity in excess of what Rotterdam is doing just now. In fact, regularly what happens at Green's Mouth is that ships get turned round more quickly to make sure that they are back on schedule having been laid from Rotterdam. When you measure it with the things that really matter in the container terminal, it is not the appearance, because you are looking at an industrial site. In Green's Mouth, I would argue, is anything but a third-world facility. We invest regularly in the equipment, the IT systems and the drainage. What really matters is productivity, turnaround times at the gate and connectivity with the customer. When you ask the customer what they are looking for, and that is why, obviously, we are investing to improve, you invest in a targeted way to make sure that the customer's business is being facilitated. I would argue that, if you take any service standard, Green's Mouth stands at the top of any service performance in that container terminal compared with even a number of the deep-sea ports. For me, I completely agree with you an on-going commitment towards investment and on-going commitment towards improving systems and productivity, but at the moment our customers are very happy with the service that we provide. That is an interesting explanation. I noted earlier that you mentioned the link between population. Obviously, Scotland is a pretty small country, so it does not appear as if you feel that there is much possibility or that you have aspirations of expanding into other areas. The population link is an interesting one, because I have been led to believing that the kind of volume and value of trade that goes through at fourth ports and Clyde port is equivalent to that that goes through Reykjavik and Iceland, and yet that is a country with a population much, much smaller than Scotland. In fact, the volume of trade that goes through, again, those two main Scottish ports is about 10 per cent or so of that that goes through Dublin and Belfast. In that context, would it be fair to say that you have a kind of lack of ambition for expanding Scotland's trade and that that might be a constraint on our economic growth? There is absolutely no lack of ambition. If there is a business there to be handled, then we are out in the market every day talking to customers. The other thing to remember, of course, is that a lot of the trade that goes out of Scotland finds its way down to England. It is not going through the ports, it has actually been driven down, and we need to think about taking that type of traffic off the road, facilitating coastal shipping much more. When you measure trade, it is always worth bearing in mind that England is still the largest trading partner that Scotland has. In terms of ambition, we want to grow our business. We have grown our business substantially over many, many years. I have been with four ports for 25 years now, and it has grown astronomically in terms of trade, financially and in terms of investment. I would certainly be happy to match anybody's ambition in what we want to do, whether it is in oil and gas, whether it is in chemicals, whether it is in whisky or whether it is in emerging new industries. I think that the key here is to look at our trade patterns with England and to look at how much we can bring back coastal shipping. We have a number of examples of coastal services just now. The very small port of Kirkcaldy has been resurrected and plays a very important part in the local economy all through a coastal shipping link that we have facilitated with cars milling, regular shipping service. That is an example of the type of thing that can happen to get traffic off the road. I am still struggling to understand the huge disparities in trade between other countries that I think are more or less comparable. I accept that geographically they are perhaps not identical, but it seems to me to make much more sense to have more ambitious plans to take traffic off the road and make an investment that would facilitate that. If I could just maybe move on, though. I think that I have made my point that we are ambitious and we want to take traffic off the road. Those other countries are islands, effectively, and they have no other means of getting their goods out. Looking forward into the future, can you anticipate any kind of changes in terms of obviously trade patterns or changes in the type of commodities that may require to be transported and so on? Looking forward into the future, is there a degree of anticipation of future developments and future proofing in your investment plans? That is a more general question, but please feel free to lead off. Very briefly, we are constantly investing in new management information systems, IT systems, and as a group we get the benefit of looking at best practice across the whole group to make sure that we are at the leading edge. You look at there is going to be a tendency towards greater automation. There is no doubt about that as we go forward. When you look at the straddle carriers at Grangemouth, you go forward 10 years. My anticipation would be that some of those will be automated and will be into automated stacking. Information exchange will be instantaneous. When you look at how we manage ships on the river, more and more are fitting transponders. I think that there is a degree of anticipation in how we look at investment going forward, but ultimately investment has to result in greater productivity. One of the interesting things that I would say to you is that the whole port sector—we had a look at this as the UK major ports group—has improved its productivity by 19 per cent since the financial recession in 2008-2009. I have just one final question, because I am still a wee bit struggling with this point. We have heard that very ambitious plans in Aberdeen. I am very glad to hear that, but Montrose is again an £8 million investment, pro-rata to the size of port. That is a really quite considerable investment. Forgive me, Mr Hammond, if I feel that I am just what I am trying to get at here. What concerns me is that this private ownership model is really serving us well in terms of providing a modern facility with ambitious plans to increase our trade that flows through our ports. Do you feel that the model that you deal with that you operate is the best? It is not really a criticism. It is all operate under constraints. If you can be objective, do you really feel that you could secure the necessary investment that you would ideally like to see so that that becomes a kind of model of the port that, if the committee were undertaking another visit five or ten years down the line, we would say, wow, Scotland is at the cutting edge of ports, not just in Europe but worldwide? I have been fortunate enough to be in this industry for a long time. I have worked under a trust port setup, I have worked under a public company setup and I have worked under a private company setup. There is absolutely no doubt in my mind that the best model, in my opinion, for expanding and growing the ports business, is private ownership. There is absolutely no lack of finance. I talk about constraints, I do not have finance constraints for the right projects that we can invest in. The important thing that ports have to do is, because ports are facilitators, we have to invest against market demand. We have had different models, if you look historically, at the ports industry. When the ports industry invested in supply without thinking about demand, a number of the ports got into trouble. In fact, fourth ports were formed in the late 1960s because it was in financial trouble all because of that supply-side investment. What really matters is that you invest in concrete market demand and make sure that market demand is being met. I am sure that the projects that we look at from time to time—whether it is £50 million, whether it is £20 million, whether it is £30 million—does not matter. The important thing is that we are meeting a genuine market demand. If I quote my £15 million a year, if I look at that over the past 10 years, that is at least £150 million of investment across the piece. We could easily double that. We have the capacity to double it as long as there is a market demand for it. We just heard earlier from Mr Paterson that Montrose has managed to double the traffic going through their particular port with a combination of investment and marketing. There is demand out there clearly for a well-run, efficient and relatively low-cost port facility. I have a statement from an observer of the scene. He states that Scotland's major seaports are today self-regulating estuarial monopolies, owned by offshore registered private equity funds, essentially looking after their own interest in charging economic rent for their port charges. The argument is that, because the way that the port system is owned and regulated, or not regulated, as the case might be, Scotland's ports are severely underdeveloped, and we should be establishing a maritime transport policy to address that particular issue. How would you respond to that criticism of your operations? Can we just make the witnesses aware of who that statement comes from? That is a submission that we have received from Professor Alfred Baird, who is Professor of Maritime Business at the Transport Research Institute of Edinburgh and Napier University. I will not make any comment. I know Alf Baird well. I think that we have all known Alf over the years. I do not think that that is a particularly well-informed view of our business, and I suppose that it must be aimed at our business because we are probably the one private owner—I cannot imagine that it is aimed at Babcock. All I would say is that we are owned by infrastructure funds. Those infrastructure funds represent pensions that everyday people invest in. What those people are interested in is investing in assets that maturen the long-term and give stability. Our business has grown consistently over the years since I have been there. If I give you an indication of values—this has come through investment—fourth ports floated in the stock exchange in 1992, with a value of £30 million and a limited capital base, it now has an enterprise value of more than £1 billion and does not have constraints in terms of its investment. I come back to the fact that, unfortunately, Professor Baird is a fan of this just invest and they will come philosophy. I am afraid that my view is that you have to look at genuine market demand and then you invest to meet that demand. As long as you have the financial capacity to do that, our shareholders are incredibly supportive of any investment plans that we bring forward to the board. I have never had a proposition for investment ever turned down by the board of fourth ports. I suppose that is a general response. We remain committed to investing in all our ports to improve the facilities and to improve services to our customers. Yes, Mr Parker. It breaks my heart to be nice to Charles, but I could probably take some attention off him. You asked about change, Mr McKenzie, but the reason we are looking at Nick Bay is because our traffic is changing because the vessels are getting bigger. There is the offshore renewable sector, which several of us are looking at in the future. The decommissioning prize out there is estimated between £30 billion and £40 billion. That is a major prize. If ports on the east coast of Scotland do not invest in, that will drift away to Norway or further south in the UK. With the centre of excellence around West Hill, where most of the oil and gas dive support expertise is based, there is pressure on us to provide more burst for the larger vessels that are associated with that. There is also a tremendous prize out there, which Charles is already handling in a much larger scale than we are doing, is the cruise vessels, because the North Sea is seen as being a very safe destination to go to. We have Royal D side, we have the castles, we have distilleries, we have Trump Gulf, which is already generating quite a bit of interest in Aberdeen, but we do not have the capacity for that size of vessel that is really looking at. So we are adapting to the change that we see that is already coming, but we had 23 vessels at anchor off the harbour yesterday morning, so there is demand for capacity already, and that is what we are looking to adapt for. I think that you have raised an interesting point and I absolutely applaud the investment that you are making. In terms of decommissioning work, you will be aware that some other ports, Lyric for instance, is of interest in that, I think, what has to. Is there a need for some kind of strategic view of that to overcome the kind of danger that different facilities are making investments that compete with each other when perhaps it may be best to concentrate some or all of that activity at specific ports that are best placed rather than making duplication and introducing too much competition into that decommissioning market question? I think that the decommissioning market will select the most appropriate port for the type of activity that they want to do. Lyric has a very large area for cutting up large top sides, that is not something that you would want to do in Aberdeen, but it is the subsea-related activity that is involved. I heard it described as doing all the plumbing work before you start taking away large structures offshore, because they are all interrelated, so there is a lot of pipe work on the subsea wellheads and things where you do not need necessarily the facilities that Lyric is looking at specialising to a greater extent. There is such a wide variety of requirements, and I do not see any reason why it should all happen in one particular port, because there is such a wide variety of expertise required for the various aspects of the work involved. Thank you very much. Is there sufficient competition between the Scottish ports to obtain the best results for customers in the Scottish economy? I believe that there is a fair amount of competition out there. We do compete with each other. An awful lot of what you do on the agricultural side tends to be that you have your own hinterland that you support, but there are other aspects of the activity that we compete on. I believe that there is a fair amount of competition there. It is geographical in the first place to save road transportation costs, but at the end of the day the importer or exporter will look at the closest port first but then see what facilities there are on the shore side to accommodate the importer or exporter. We all get our share. So, when you are making investment decisions, it is not based around competition against your local transport? It can be, but it would then depend on volumes and what type of facilities are required. If you can build facilities that can serve several different types of trade, so much the better. If it is very specialised, you may only have one customer for it, so it is a mix. One of the issues that has come up a number of times is the additional cost of repositioning empty containers for Scottish shippers. Have you observed any change in that? If it is an issue, can you identify any light list solutions? Perhaps I can make one or two comments. Empty repositioning is always difficult and it is something that we would always want to encourage because that obviously facilitates exports. For me, this is where the coastal shipping links are quite important. Trying to get cargo back into Scotland as well, we are looking at this and trying to link Tilbury up with Grangemouth at the moment, so that we have containers in Scotland to take advantage of exports. Obviously, the difficulty is a lot of the lines will run containers up by road, which is not a particularly good or cost-effective solution. That is where regular coastal shipping can come in to help that situation. How do you go about facilitating or encouraging that? We look at linking customers up. We have a number of customers who use their facilities in the London area and who have a Scottish business as well. What we look at doing is perhaps they will then bring in, for example, plywood for the construction market. A lot of it comes into the south-east. Some of it can really come up to Scotland, so we then look at some of those plywood shipments that are in containers, linking up with feederships that will then run between, say, Tilbury and Grangemouth, but they also call up the east coast, so they will call it Emmingham, they will call it Teesport, they will triangulate with Rotterdam, and then the boxes will find their way up to Grangemouth. Sometimes it is a mixture of empty and full boxes. That type of thing is the kind of link that we would encourage. Are you having any success in growing that market? Yes, we are. It is a question of getting what they call critical mass. That is the difficulty with the coastal shipping. You have to have a certain amount of cargo from the start to make the service viable, so it is a case of getting several customers together with the feeder line to try and put that type of proposition together. It is a bit of early success, but we are working at more and more with the links between the two ports. Is there one specific thing that you can think of that you could do that could be done? I think that a clearer system of support for coastal shipping would help. I think that we have coastal shipping. We do not have it on the scale that perhaps we should be. You have to look at the whole question, not just of the economics but also the carbon emissions as well. Does anybody else have any comment on that, Mr Paterson? No, we are not involved in containers at Montrose, so we do not have that type of problem. We are on a much smaller scale than Charles in a very different style of traffic. The containers that we handle are specifically linked with the lines that operate, so the West Africa services have their own containers, which they bring in themselves. Streamline up to the Northern Isles has their own containers. Sea cargo twice weekly freight ferry to Norway has their own containers, so it is not the same. We did have a feeder service many years ago and that was a major challenge. I am not sure whether the ports are the answer to the issue about repositioning of containers. It is the shipping companies that you need to talk to there, but that is my understanding of it. Ports facilitate that by providing the space to store those containers, but it is the shipping lines that are the people involved in repositioning them. Mr Parker talked earlier about the increasing size of container vessels. How does that affect the ability of the Scottish ports to serve the Scottish trade due, as I say that you have already touched on? The vessels that I was talking about are the subsea dive support vessels and subsea construction vessels. To a certain extent, cruise vessels get bigger all the time as well, but container vessels, I think that Charles is probably the person to speak to. The size of feeder vessels in the last eight years has just about doubled. Obviously, you see the very large, ultra-large container vessels that are being handled for MERSC, China's shipping and a number of the other deep sea lines. The reason we are doing the deepening at Grangemouth is that, at the moment, we are fine. There is no problem with the size of feeder vessels that we are currently handling, but we anticipate in the future that those feeder vessels will get larger. As we move towards feeder sizes of probably 1,800 to 2,000 TUs, we need to do the deepening and improve capacity at Grangemouth, so that is why we have that in our investment plans. So you are already investing to deepen to take on those future vessels in? Yes. The last thing is, what impact do you anticipate from the introduction of the SECA regulations? On the oil and gas industry, they were predominantly using the fuels that people are now required to use anyway for those modern supply vessels that were well ahead of the game there. The impact of SECA stands for sulphur emission control area. Those hundreds of thousands will be delighted that you said that. The impact in Aberdeen has been minimal. Probably the biggest impact has been on the Serco Northlink ferry, which is subsidised by the Scottish Government. It had to change from a much lower grade of fuel to the new grade. Presumably, I have not spoken to anybody, but presumably the drop in oil price has helped them significantly in addressing that impact, but they would be better advised to tell you about that. I would agree with that point. I think that it has fortunately relobbied against the regulation because we felt that it was discriminatory because it only applies around the east coast rather than the west coast at the moment. It has meant that the ferry companies across the UK have had to put on surcharges because of those regulations, but fortunately in a way it has also coincided with a lower fuel price because of the oil price. However, we do not know whether that will continue. It is a surcharge. Clearly, the surcharge is greater the more you are at sea, so that means that, for example, for the Rossite Seabrooga ferry services comparatively at a disadvantage when you look at the services that go through Teesport to Seabrooga, Hull to Seabrooga or even Tilbury to Seabrooga, the surcharge is less. For us, it has had a disproportionate effect, and that is why we are working with the Scottish Government and DFDS to try to make sure that there is a long-term future for that ferry service at Rossite Seabrooga. I want to talk about the issue of land access to ports. I know Aberdeen and Montrose well, and I know that Aberdeen is at certain times of the day surrounded by one big traffic jam. I know that Montrose has other problems with tight access in some places and poor quality, let's say, access to the trunk road network. In general terms, what do you think of the road access that you have to your port facilities and is there a need for improvement in that? That is certainly from our perspective. It is something that we use as a USP at Rossite because of the fact that we are near the bridge, the railway, the airport and, for us to bring people in, for instance, to do crew changes for Aberdeen, we use that as a selling point because the guys are coming in from the south or from the north and are coming in straight off the main trunk routes into Rossite. For us, we see that as a benefit and, obviously, the new bridge coming in, we will see that as a further benefit. In terms of Aberdeen, it is challenging. Market Street is certainly challenging since the opening of the Union Square shopping centre and, unfortunately, a conversion of a rail freight yard. One of the attractions that we feel that Nick Bay offers is that you have a road to the south potential links into another industrial estate at East Tullis, so we are working with our local authority and regional transport partnership to look at how that can be developed. In terms of our national planning framework, three projects, I think that some more support for that would be an advantage to address that, but a big selling point for Nick Bay would be to be clear of the city centre in Aberdeen. David White had very good evidence to you. He mentioned the last mile of road into the port, and I think that that is a very good concept. I would back up what David said about Rossite. We obviously operate the port at Rossite, and five council invested in the spine road, which is a direct link from the M90. It is a very good investment. It has definitely helped. Dundee Council has also invested in helping us with a new entrance. We have also invested in this to the east end of the port at Dundee, which has helped with both the renewables in the North Sea oil and gas market. There are a couple of areas in our ports. Certainly, good road links into Grangemouth, but the Avon Gorge is one area where we feel access to the west could be improved, particularly at Leith, where the roads in Edinburgh, as you will know yourself, are pretty congested. The last mile into the port is a very important one. Leith is still a key facility, and the east coast of Scotland and its road links are really somewhat on a par with what Colin has described for Aberdeen. Does Montrose have specific problems? No, you are very familiar with the layout of it. The south side has not got a problem, because the A92 passes right by its gateway. On the north side, you have to go through the town, where a lot of activity still happens. There have been schemes devised, as you are aware, in the past by consultants, but the consultants in their research have visited many lorry drivers. They went in to the cabs of lorries, leaving or coming to the port and discovered that the lorry drivers themselves were quite contented with their road systems, so that took a bit of the steam out of it. I have been in a cab and met one of those lorries. It is not a major problem for us. We have had evidence from—some people are not represented here today—relating to access the trunk road network and the trunk road network itself. Are there any issues—for instance, I notice that the fourth ports mention the even gorge access to Grangemouth? Are there any issues about the broader road network that you are concerned about in terms of access to ports? I have not just already mentioned that. There is unfinished work, as you are very aware, between Arbroath and Montrose, but hopefully that will be rectified in the not-too-distant future. It is not a major problem for us that there is access to the port. In terms of real access, there is a lot said about getting traffic on to the rails, but, as you mentioned a moment ago, up until a few years ago, there was a large good yard at Aberdeen and even tracks leading on to the keys in some places, and all that has been lost. How long were you connected to the keys when they went away? At the time, Aberdeen-Arbroath viewed it as a loss, but there was not significant traffic at all passing through that rail for a yard at the time. In terms of integrated transport, we did not believe that it was the right move, and we thought building a shop and said that it may cause problems, and that has been proved. We have invested in our own rail freight facilities on the north side of the harbour and the calcium carbonate slurry that I mentioned earlier on does leave the harbour area by that rail connection. Also, in East Tullis, which Nick Bay could link into, not by rail but by a road link, we believe that we could enhance the facilities at Craig Inch's rail freight. There is potential for rail freight there, but there are serious challenges in the infrastructure and the rail network to be addressed before freight is a serious option for the freight sector. What facilities do the others have to access rail? We have rail siding facilities at Grangemouth. For us, it is quite important that rail paths for freight, which are reasonably good, are maintained. Interestingly, one or two of our customers have experimented in the past with short-haul rail. There has always been an accepted wisdom that rail only works over longer distances, but it can work in a very complementary way on a short-haul basis with road transport as well, so companies such as Malcolm's are using that quite effectively into Grangemouth. The other thing that we would want to see preserved is the rail link that we also enjoy into the Port of Versaith, which although has not been used extensively at the moment, is the potential to be used in the future. The Barb Cogs have accessed that same link. Absolutely. It is the same position for us, but right now it is not something that we are concerned about. Can you see the potential of using that more effectively in the future? As I said before, as an engineering company, we are more focused on putting things over the jetty and into the sea. For instance, bringing aircraft carriers from the various other yards in the UK has primarily been done by sea or by road. There has been no real link at all because of the network down south, effectively. It was looked at. Matros, of course, is a station nearby. Is it an effective part of the job? Well, 70 years ago, ScotRail invested quite heavily in the goods yard that they have. I have never seen a train in it, though. The types of commodities that we are moving in and out of Matros do not lend themselves well to transfer by rail anyway. The question that I have written here is—and I will ask it, although it does not seem to apply to the answers that I have given—is there any way that the rail facilities that you have access to is limiting your capacity? You do not feel that you are being limited by it at the moment? No. Do you think that you have to bear in mind that ports may well view rail as a competitor as well? Unless you own the facility and generate revenue from there, I think that the rail infrastructure that I mentioned on the network is challenged enough as it is without focusing on just ports alone. I was going to ask you—and to inspire your question—what are the obstacles to the free flow of rail to Scottish ports and what improvements might remove those obstacles? Now, I am sure that the question was drafted in terms of physical obstacles, but are we perhaps looking at a situation where there may be a regulatory or a competitive problem that is driving a wedge between the rail and the shipping industry in the ports? As I said, we have invested in a rail yard to the north of the harbour, put two additional sidings in, and there are two sidings used by the slurry people, so we have invested in it, but the interest is minimal. There was initially some cargo flows from down in England with some base oil, but that dried up a few years ago, so because of the challenges of the network, we are not aware of any serious interest in it. We are looking at a situation where access to rail is there, but it is not being used a great deal, is that fair to say? I think that that is a reasonable point. It is being used to a certain extent, but I think that we would want to keep the freight connectivity that we have. I mean that the point that Colin had made about competition is also well made, because you look at the container market, there is a lot of competition there. We compete not just with Greenock in the west coast and some of the ports like Teesport in Tyne, but also with Freightliner. Now, we have a perfectly good relationship with Freightliner because we work with them with their landlord down in Tilbury, so it is a kind of multi-faceted relationship. I do not think that it gets in the way of any potential, but obviously there is competition there as well. Did I hear you say that you intend to invest in completing that or installing that last half mile or so of rail that would take rail provision right down to the key side, as it were, in Grangemouth? Did I misunderstand that? I did not say that to my recollection, but there is the potential to increase the capacity of rail, certainly at Grangemouth. If the demand is there, that is something that we have looked at as part of the feasibility of linking up and expanding capacity and building new warehouses, because the other possibility is that we can have rail-linked warehouses in the port. There is a scheme that would look at doing that. I certainly would not rule it out, but we have not started doing that at the moment. I want to ask a bit more about Shortsea and ferry transport. A lot of what I am going to ask you has been covered already, but you may feel that you want to expand slightly. All the UK deep-sea container ports are located in England, and Recythe is the only ferry service in Scotland that is an international ferry service. A lot of lorry traffic comes through the roll-on roll-off ferry on the west coast through the ports to Ireland. It has already been mentioned that there is a feeling that the Recythe line is running at a disadvantage. There are access and storage issues, particularly at Recythe. We have mentioned the SICA regulations. Is there anything in particular that could be done to make ferry operations from Scotland more sustainable and to help to increase cargo destiny for Europe? Anything you have not mentioned? I would also put the ferry service in the context of all the Shortsea services that I see going to Europe. That is quite important. We have a frequency of three times a week from Recythe to Zebrugge, but as well as that, we have nine calls a week at Grangemouth. If you look at the total number of units that the current ferry service is handling, it is about 39,000 units, which includes about 11,000 trade cars and 21,000 containers. The alternative route for those containers would be through Grangemouth with the frequency. The frustrating thing for both ourselves and the Scottish Government is that the hauliers have not made greater use of the ferry service for trailer traffic. It is a catch-22 situation. You need better frequency to do that, but even when there was better frequency it was not used as well as it needed to be. There is a difficulty there, but if you look at the total mix of business there, I think that what we are aiming to try and do is a long-term sustainable future. The Scottish Government itself is looking at the feasibility of whether a new compliant LNG vessel could be built and operated in that route. We very much support something like that, something that could be worked in partnership with the Government and also the operator. That was really the purpose behind the MOU that we entered into late last year. We have a twice-weekly international ferry to Norway as well, so Recytesy Brooker is not the only international ferry service in Scotland. Is that quite a successful operation? Are you planning to expand that, or is there anything in particular that could be done to make that more sustainable? They have increased in the last 12 months from once a week to twice a week, although that was really to address some competition that came in from another service that linked us with Norway and round into Russia at Mermansk, which is now ceased operating. It is a successful service. It has been established for about 30 years, linking Aberdeen with west coast Norway. I would suggest that for many years now there has been talk of short sea shipping, but the most difficult part of that is pronouncing it. I am glad that I got it right. The big thing there is putting your money where your mouth is and saying that if you want to promote shipping, the Government should be looking at doing more to go out there and speak to people who are exporting. Short sea? Yes, coastal, as Charles said, and continental and Norway in the likes. Get out there and talk to people about it to support the shipping industry. There are grants available, freight facilities grant of the likes. It is quite a maze to get through some of these things. If the Government is serious about doing it, get out there and promote it. Put people on the road, talking to exporters. Would that also mean a simplification of the grant scheme? If you say that it is a maze, I know that my colleagues are going to cover that a bit more. I believe that I am not an expert on the grant system. I have enough trouble with Sudoku, but I believe that that is something that could be made simpler. John Orr? We have no ferry services, despite the south-key being in ferry dam. The ferry has long since gone, but the short sea shipping is a very important element of our trade there. It works quite well. How do you promote that? We promote it amongst our existing users. When we are marketing to people who are not our users, we mention the fact that short sea shipping is the business that we are in. We think that we are quite good at it and that the short sea shippers themselves are good at it. How do you promote that in ports down south? What promotion do you do? How do you work with partner ports? We tend not to have a close relationship with partner ports, but we all know each other anyway. If there is to be a benefit in colluding with another port, we would do it informally. However, the marketing of the movement of the commodities is not part of our front line. It is the actual importers and exporters who do that. We often help them. I think that you have made a very good point there that the links for the short sea shipping market are very important and the feeder market. For example, developments such as the mass flat at Rotterdam are very important. If you get congestion in Rotterdam, very often that is what will frustrate Scottish exporters in getting their goods to market. We know the port of Rotterdam, the major terminal operators at the mass flat, similar to Antwerp, Zee Brugge, as well as Hutchison down at Felixstow, for example. That is an important initiative to make sure that there is always capacity for the feedership at the major terminals to make that link work. I think that there is more that can be done on that. David, I do not know if you have any questions. Well, S is something that we do not engage in, in my face. Very clever. Well, going last has its advantages. It is not something that we are involved in. Thank you, convener. Can you ask the witnesses what your experiences of using freight grant schemes such as freight facilities grants? Mr Hammett? Yes. We successfully received one or two freight facilities grants and so have our customers. I would say that the system is complex and difficult to understand. I am probably on a par with Colin when it comes to Sudoku. I have to say that the whole system could be made simpler and more transparent would be my view. I feel sorry for the people who have to administer these schemes. I think that there is definitely a case for greater simplicity. If we could have it, greater support for the services that start up is not always about building infrastructure on either side. In fact, we are quite happy to do that for sustainable services. There is no problem with that. I think that it is looking at the viability, especially in those first six months to nine months of getting enough cargo for a coastal service, a short sea service. That is where the scheme I think could be targeted. There has been some really good examples of the grant, for example, of the waterborne freight grant that I mentioned on the Hanson Islands issue. Boyd brothers in haulage and corpac have nearly £1 million. The amount of journeys that is equivalent for HGVs was £6,300, which is phenomenal. In my patch on the Hanson Islands, there are real constraints on road and real constraints on rail. As we had in the debate yesterday, convener, it is not just the single track capacity particularly for haulage, it is a height issue. I think that there is great potential for this modal shift. I was surprised and perhaps the witnesses could correct this as if it was wrong of the three different grants. If you look at the main one, freight facilities grant, I am told that there has been no word since 2011, which certainly surprised me. Is that correct? Is that the experience that I know from and shows that we heard that there was a freight facilities grant? Is that a correct figure that there has been no words made since 2011? I am not sure about the date, but I know that there has not been any interest in it for quite a while. Whether that is the complexity or it is just too much effort to be involved in that? Obviously, I am speaking to the prejudice of the audience because, clearly, witnesses are very keen in this, as I am. Obviously, the wider picture is that the Government has got very strict climate change targets. That is an ideal way to try and reduce emissions, but the fact that there has been no words made since 2011 for that specific grant seems really surprising. Mr Parton, you mentioned the thing. You were successful. Yes, thank you. The freight facilities grant that we were awarded was completed in 2011. When we came to the next phase of construction, which was not dissimilar, we were really prevented from applying for it because we had used up road mileage savings from all the keys in the port. Part of my process was to persuade the officials concerned that we were looking at the whole harbour quest only repairing two that had collapsed into the sea. They were part of the team of all the berths, if you like. Otherwise, it would not have worked. I used it up because it is complex, just as you have suggested. I am now thinking of doing it again. Could you explain perhaps to the committee then, in relative terms, how complicated it is, the application? Does it stop chief execs throughout Scotland from making applications? Yes, it can do. The only reason that I was really successful was that we got a knock on the door one day from a bunch of farmers who said that we want that site over there, adjacent to this key, to build a new grain terminal. When we took the proposed throughput of the grain terminal and took all the road miles that it would save from ticking grain down to Berwick or wherever, there was a huge road mileage saving that we were able to get the grant on. Now that is not easy to do. That was a stroke of luck. Did you find that you needed to bring in outside consultants who are experts in this? That is a cost to you as well. Oh yes, yes, but it was a worthwhile cost. Also, the group of farmers who had built the grain terminal also got a grant with the same set of consultants, and they were from down south. Was the fee for the consultant something that you could claim against freight facility grant? No. That was a direct cost to your business? It was a direct cost, but it was also a bonus. If a grant has been in place for the last three or four years that has not been used, then marketing would appear to be the challenge. If we built a key and nobody came, then we would market it and chase it, but to criticise—I am not suggesting that they were saying that, but to criticise an industry for not using a grant, then there is something wrong with the system, is there not? Sure. I can certainly see some problematic questions coming out of this debate, but I was really surprised that this one major element had not been utilised for many, many years. I had some experience again with the local example in Gordon's, I think that it was in Nern, who as you know is a timber processing firm. They utilised it to bring timber from Skye into the report in Nern, which was not an excellent example of it. I am really quite concerned that we are not utilising the grant that is there. It is still available and open, but as far as I can work out, it is not being used. Mr Parker, did you have a bit of a response? We provided the contact details. We got them from Transport Scotland and we provided that to a customer just recently, but I am not sure if they have pursued that. I would say that, as a Highlander myself, I would say that the Highlands have always been more favoured from grant systems than the rest of us in the ports, but when I managed the port of Peterhead for almost 20 years before I retired and then went to Montrose, and there I was chasing fish-related grants, which was an awful lot easier, European funding than anything else that they have encountered in other ports. I suppose that it is all relative, because they are very hard to get. Mr McGinley, do you have any experience? No, we have not looked at frank grants in any way at all. We have engaged in other areas for building-type grants elsewhere, with Scottish Enterprise, and we have been reasonably successful, and we have not found that element in that area too difficult. I suppose that the wider question is, apart from the grant schemes that we talked about in the past few minutes, do you feel that there is a drive within the sector to move more freight away from road to water? Mr Hammond? I would say that it needs to be encouraged and facilitated. I suspect some of the issues about freight facilities grants as well. It is not just about accessibility. There is always the difficulty or suspicion that the grant is going to be used really just to move one piece of business from one location to another, whereas the examples that you have given are genuine examples of the fact that you are moving from road on to sea. There is that inherent suspicion. I would say that the grants themselves have to be made simpler and they have to be targeted more towards the ship owner. I agree with Colin's point that they need to be marketed better. I do not think that that is just a problem in Scotland. I see it also in the UK as well. There are obviously UK-wide schemes and there is obviously a co-operation between the UK Department for Transport and Transport Scotland. It is a bit of a concern that we are not utilising existing grants better. Do any other witnesses have any other comments? I do not believe that there is a strong drive for certain parts of freight industry to put stuff by sea. We are at an advantage. There are no roads out to the rigs and the platforms in the North Sea. There are no roads to the Northern Isles or Norway, so we are in a beneficial position there. It is very easy to put freight on a road and truck south. Some of the points that were made earlier about the tonnages passing to Belfast and Dublin are simply because it is an island and you have to get it that way. The point that Charles made about so much of it goes down by road down into England or vice versa is what we are competing against there. I think that it also makes me use the example that Ferguson's transport in Carpac, which some of you might be aware of, is integrated in the sense that they have sea interests, port interests and haulage, so that they are much more interested in transferring to sea. However, a few companies have that integration. Are there any other points that we have not covered on this particular issue? I would just like to come in briefly on the modal shift grants. I take it that the witnesses are pleased that the modal shift grants were retained in Scotland when they were not retained in England, but can I ask what representations have been made by the industry to the Government to clarify and simplify the freight facilities grant if it appears to be so difficult to get to? Other than the recent referral to a customer about the freight facilities grant, it is not something that we have spent any time on at all. I think that the industry bodies have certainly both the UK Major Ports Group and the British Ports Association have made those representations. I am not aware of how the last time they did them, but they have regularly made those representations. I think that it would be worth making again. I have been successful in getting one, and I think that if others are straying away from them, the reasons are to be sussed out. I would like to get some feedback from you with regard to reducing Scotland's carbon footprint, particularly with the water freight industry. How can you make a contribution to doing that? Perhaps you might want to refer to the uses of technology and how they might be applied to your particular industry. I think that one, if I can kick off with one, I always find this quite an interesting statistic. We emit about, as a group, 40,000 tonnes of carbon a year in providing services. We save, we believe, the UK economy when we look to this more than 12 times that amount. It comes back to our friend short sea shipping. More of that will certainly reduce carbon emissions, but there are other technologies. We are looking all the time at LED lighting, more fuel efficient engines, technology that limits emissions, that type of thing. We have a standing environmental group within fourth ports, which looks at what we are doing at Tilbury, what we are doing in Scotland, and combines best practice. We are pretty successful even when we are in years of growth in limiting carbon emissions, but that modal shift could do more than anything. Taking that traffic off the road going down to England will do more than anything to reduce those emissions. There is an argument, obviously, about where those emissions are happening, depending on the length of the road journey, but it is still a good thing to do. I would echo that sentiment and say that Babcock does exactly the same type of approach to trying to reduce our carbon footprint at any opportunity. Same at Aberdeen Harlaw. We have fitted some LED lighting and we are looking to do more. I think that ports should be viewed as facilitators for addressing the carbon issue. I would describe it as the long-held myth about cold ironing, as the Americans call it, shore power onto vessels. That very much depends on the type of vessel that is operating through your port. A lot of the vessels in Aberdeen harbour are using cranes and winches while they are alongside them. We would black out Aberdeen if we tried to plug somebody into that. There is not the power available for that sort of facility, but I believe that some vessels like the ferries could look at cold ironing for the time that they are in port, but it is incredibly expensive. Again, there is the lack of certainty as to whether or not the power is available for it. At the end of the day, the power is being generated by a coal burning power station, so are you really achieving anything? The modern efficient engines on vessels are probably providing quite efficient power anyway. I was also thinking that we took some evidence at our consideration of the budget earlier. There are obviously new transport information systems development in logistics as well. Are all these applied in terms of your particular industry? The sophisticated logistics support system that our users use, the oil and gas companies, for being as efficient as possible with the movement of goods and things, there is a lot of investment in technology there. We have our own technology in making information available on our website as to where vessels are and what have you is there. Ports can contribute towards that, but there would not be the major players in that. Can I ask about Government support and policy? There was a feeling in the submissions that we received that, in relation to policy, it should be very much hands-off and private sector led, but can the parallel identify any particular policy or regulatory obstacles that impact on the free flow of freight by sea, road and rail? Is there anything in particular that the Government can do to help with the interconnectivity of freight? Who would like to start? I haven't hit an obstacle. If I had hit an obstacle that was created by the Government, I would react immediately by going back through MSPs who are with local familiarity to the problem, but it is not something that arises easily. In July, as a port and as the British Ports Association and the UK Major Ports Group, we have a very good working relationship with Transport Scotland. I find them very user-friendly compared with their counterpart down south. I would not want to suggest any changes there. We have already talked about the accessibility to grants and road connections. The only other thing is a more joined-up approach on forecasting future market demand with others in the UK and a better awareness of what is going on in the continent would help. When we are talking about trade and facilitating trade, an awareness of what is going on elsewhere is really important and a consistency of approach in forecasting between Scotland and the rest of the UK. What about the planning policies? Do you see any issues with the planning system in relation to the national planning framework? Does all that function effectively with your set-up and your strategies for planning ahead? At Aberdeen, we got involved in trying to become a project in the NPF-3. That was very successful. We found dealing with Mr Mackay, who sat here before me, and his officials were very effective. We can only say that that seems to work. What I would suggest was, as I mentioned earlier, that if you are an NPF-3 project, you should perhaps receive more support beyond that, because part of the Nyg bay designation in NPF-3 is the fact that the supporting infrastructure and I think that there could be more funding put towards that in the future. I have always found at all levels that politicians and ports are very keen to be of assistance. When I have been applying for grants, particularly in Peterhead, there was great support from politicians at all levels. We are pretty much in the same place. We work very closely with the local five council in terms of the NPF for Fife and have worked closely with ourselves in terms of the national planning framework, so we are very comfortable with it. I would agree. I do not think that there is any comments to be made about Scotland any more than the rest of the UK. I think that we all push for a more efficient streamline planning system. I personally think that when there are controversial planning applications, the arguments can easily get aired in the first few months of the application, but it tends to take too long to air the arguments, but that is not just a problem in Scotland. That seems to me to be a problem everywhere. I hope that there is some way to shorten that process. Could you ask the witnesses about the Scottish Government policy, as far as your industry is concerned? If each of you were Minister of Transport for the day, what would your priorities be for your industry, Mr Hammond? I would want to support greater connectivity. I would be very supportive of coastal shipping in a transparent grant system, and I would make sure that our ports had proper road connectivity as well. Those would be the priorities that we have already touched on. For me, it is more about communication between ports and engagement between ports in Scotland. I do not think that we do enough of that. Potentially, we could open up a whole load of areas if we were just a bit more connected. We are hosting the Scottish Ports meeting next month. David, if you want to come along to that, there will certainly be ports from all over Scotland involved in that meeting. To support what Charles said, it is that last mile that the British Ports Association mentioned is recognised by roads authorities of how significant that is. I think that applies for airports as well, certainly in Aberdeen, but for the ports, recognition of how important that is and the competition that it faces with other road users, but how significantly important it is for maximising the efficiency of getting freight off the roads. I have both been in the chair of the Scottish Ports group of the British Ports Association in the past. That is a very strong association within the BPA, which is the envy of England in that respect. Because we share ideas with each other, despite the fact that we might be in competition with each other, we feel that we are putting our best feet forward thereby. As I said earlier, the politicians get the honest truth from us. I suppose that our related question is whether we need a refresh of the Scottish Government's freight policy. Are we starting to reverse our question, Mr Paterson? I do not think that there is anything that needs a drastic resetting. Everything is always worthy of review, is it not? I would not want to say no. It would certainly be welcome if it was to achieve anything. I think that I am in the same place as Colin. Why not? It is a greater profile for the freight policy and maybe a change of emphasis. My final question is about best practice. Do any of the witnesses have best practice in other European countries of how there is excellence in terms of freight or your industry generally that you can point to, particularly where Governments got a role? Is there examples that you could give us that we could perhaps share with the Scottish Government about how it works in practice? Mr Hammond? I would say that, to be honest with you, the less Government interferes in some of those things, the better. That is my view. I would say that we quite happily operate both north and south of the border with minimal interference. I think that the advantage Scotland has of the short lines of communication that are not in evidence in the rest of the UK, so I would have to say that that is pretty good. However, I cannot think of anything more to add in that. I think that I just said it at Charles. I am there as well. Mr Parker? Yes, I am happy with the party line. On that consensual note, I hand back to the convener. Thank you very much. Finally, gentlemen, of all the points that have been made today that we have teased out in our evidence session, is there any one thing that you would like to leave the committee with as a take-home message? All I would say is that Scotland's ports do not lack ambition, do not lack the capacity to invest and are up for business opportunities. Okay, thank you. I think that I will probably finish where I started, which is that, from an engineering business basis, with a port attached to it, we hope to grow and develop and take that port forward into the 20s and 30s and so on. Any support that we can get from that from the Government will be welcome. Okay, thank you. Ports is a long-term business. You have to take a long-term view of investment, and I welcome this opportunity to speak to this committee. If it helps the profile well and good, but we to back what Charles has said, a higher profile would be much appreciated. Thank you. Thank you. I will give you the final welcome, Mr Parsons. Thank you very much. I think that our first audience is our customer, and we pay attention to that. I am very grateful for the opportunity to come and give evidence today and also to hear what you people have to say about us. Thank you very much. Okay, thank you. In that case, can I thank all of the witnesses for their evidence this morning and thank them for their attendance? We will now have a short suspension for the witnesses to leave the room before resuming our agenda. Right colleagues, the final item on the agenda today is for the committee to consider and agree its EU priorities for 2015-16 and to appoint a new EU rapporteur. Can I invite members to consider and agree the priorities that are within the European Commission work programme for the coming year is set out in the paper that has been circulated prior to the meeting by the clerks? Okay, there are no comments arising from the paper. In that case, the committee has agreed to agree its priorities for the coming year is set out in the paper. The next item on the agenda is to appoint a new EU rapporteur. Members have been circulated in advance of the meeting and we have one expression of interest from Dave Stewart who has said that he would be very happy to take on that role as the committee agreed. That onerous responsibility falls to you, David. Do you want to set out your priorities for the coming year as EU rapporteur? Okay, that is fine. In that case, happy that we have appointed Dave Stewart as the EU rapporteur. That concludes this item and concludes today's committee business in public. Thank you.