Belfast Harbour is a successful business organisation which has been extensively developed by the Harbour Commissioners along with a large capital spending programme.
In the proposals launched jointly by the UK Government and the Northern Ireland Executive some weeks ago, the potential of Belfast Port is specifically recognised.
Two critical strands are identified. First, 'Belfast Port is a Trust Port and therefore an independent statutory body'. Second, 'it is important that ... the Port delivers a demonstrable economic benefit for the people of Northern Ireland'.
On first reading this is encouraging. However, closer reading suggests that official policies have not tackled some major legal and financial questions.
As a Trust Port, the Harbour Commissioners are in an unusual relationship to Stormont. Even though the harbour is independent of Government, in a surprising administrative ruling, it is also deemed to be a public corporation. This has the effect of constraining financial decision-making by the commissioners whose capital spending is treated as part of the capital spending by the Executive. Any capital borrowing becomes part of the NI public sector borrowing requirement.
Since 2006, Belfast Harbour has been waiting for amending legislation to clarify its status and enhance its commercial freedom. The Stormont Executive (and the UK Office of National Statistics) must agree that the harbour should no longer be classed as a public corporation. Then the Harbour Commissioners would be free to act as developers who can commit independently to capital schemes and raise external capital.
At present the commissioners must limit their development spending to the resources available from accumulated profits. In 2012, on a turnover of £39m, they generated post-tax profits of just under £16m. Because of earlier profit accumulation, the harbour was able to spend from its reserves nearly £50m on priority investments. However, reserves available for further investment were then reduced to just over £12m.
The commissioners have a capital programme that may be constrained until the public sector spending rules are modernised, as has been promised.
The debate about the future governance of Belfast Harbour has, unnecessarily, been seen as a debate on the merits of privatisation. This concept stems partly from the former privatisation of the trust ports in Great Britain. There are other possible options.
In practical terms, the Executive can consider either retaining the status quo, or privatisation, or a free standing 'non-profit distributing' trading company. A further dimension to the debate asks whether Belfast Harbour should contribute to Stormont's revenue, as has been implied in the recent proposals from the UK Government and the NI Executive.
If the Executive wishes to raise funds from the harbour, then there will need to be a careful legal and operational analysis.
The harbour currently pays taxes as a corporate body. That is not in question. Last year it contributed £4.3m in corporation tax. However, as a Trust Port there are no shareholders and there is currently no mechanism to issue a dividend to Government.
The suggestion, from London and the NI Executive, that the harbour should help the Executive to raise extra revenue can be answered more constructively than by looking for a legal change. Currently, the harbour is developing its assets as a port and, in a significant aid to the local economy, is developing a range of commercial assets.
Amongst these assets is the recent £40m investment in preparing for the Dong renewable energy enterprise. Then there are development proposals in the area known as City Quays. The harbour has also put capital into the extension of the Science Park. These independent decisions, indirectly, substitute for other public sector plans.
For the foreseeable future, an independent harbour authority might be expected to be an important agency showing demonstrable economic benefit for NI.
With this combination, should the harbour be given independent status as a development agency which contributes indirectly to Stormont's overall objectives?