PORT OF TYNE ANNUAL REPORT AND ACCOUNTS 2011

08/ANNUAL REPORT AND ACCOUNTS 2011
CHIEF EXECUTIVE OFFICER’S STATEMENT/09
STATEMENT BY THE CHIEF EXECUTIVE OFFICER
CONTINUED...
Economic ImpacT
The impact of the Port of Tyne on the
regional economy is measured on an
annual basis through an Economic Impact
Assessment. External consultants ARUP
have reported that the Gross Value Added
(GVA) by the Port of Tyne to the regional
economy has increased by 11% to £467
million (2010 – £421 million). Included in
this is the significant impact of £45 million
in tourist spend resulting from passengers
using the Port’s International Passenger
Terminal that facilitates the DFDS Newcastle
to Amsterdam ferry service and the
developing cruise business. The report
also highlights that the Port supports 9,425
(2010 – 8,836) full time port related jobs
in the wider community, including those
directly employed.
Stakeholder Benefit
Stakeholder Benefit delivered during
2011 also increased significantly by 24%
to £8.3 million (2010 – £6.7 million),
comprising of taxation, direct investment
and ‘in kind’ support.
£7.6 million was generated in tax receipts
for the Government and charged against
income in the year, relating to employee
taxation, company taxation and business
rates (2010 – £6 million).
Investments in stakeholder benefit which
are included in operating profit within
the Port’s financial statements amounted
to £0.7 million (2010 – £0.6 million).
The principal components of this were:
– £224k (2010 – £212k) was invested in the
business’s employee Profit Share Scheme,
now in its second year of operation
– The costs of operating and maintaining
the Swing Bridge, a scheduled monument,
of £166k (2010 – £138k), which is
not a commercially viable asset on
a stand-alone basis
– The Port actively supports its regional
and national business partners,
through subscription and membership
of organisations that include the CBI
Regional Council, the North East
Chamber of Commerce, the EEF Regional
Council, Business in the Community,
the NewcastleGateshead Initiative and
the Institute of Directors. During the
year it invested £139k (2010 – £127k)
in these activities
– £94k (2010 – £116k) has been expended
in sponsorship of events and activities in
support of developing the local community
such as the Mouth of the Tyne Festival,
the Tyne Tunnel 2k wheelchair event, the
Pride of South Tyneside Awards and
supporting the Port’s Writer in Residence
programme and the annual ‘Reflect’
photography and film Awards
– £30k (2010 – £30k) donation to the Port
of Tyne charitable fund, administered by
the Community Foundation and a £50k
donation to the Nissan President Fund
in the wake of the Japanese tsunami in
March 2011
– £10k (2010 – £10k) rental support to
the North Shields Fish Quay Company
‘In kind’ services were provided amounting
to £17k. (2010 – £29k) ‘In kind’ activity
relates to the continued waiving of
conservancy charges to Royal Navy vessels
that are open to the public.
Health and Safety
The Port previously set the target of
achieving the internationally recognised
Health and Safety standard OHSAS 18001
certification. This has resulted in further
emphasis being placed on the awareness
of health and safety issues, reporting,
incident investigations and training.
The business was successful in
achieving OHSAS 18001 certification
in February 2012.
An improvement in the level of near miss
reporting has contributed to the increase
in the number of incidents recorded in
2011, up 50% to 891. ‘Near miss’ reporting
has risen to 55% in 2011, having risen
from 38% in 2010.
Whilst the number of injuries recorded in
2011 at 69 was 18% lower than in 2010,
the related number of working days lost
at 168 was 47% greater than in the
previous year. This is reflected in the rise
in reportable injuries to the Health and
Safety Executive (HSE) or the Marine and
Coastguard Agency (MCA), required when
the associated lost number of working days
is in excess of three, which has increased
from 3 to 10.
Port Marine Safety Code
As part of the business’s drive to improve
Health and Safety standards, the Port has
also adopted the guidelines within the Port
Marine Safety Code. This code has been
developed to improve safety in UK ports
and to enable harbour authorities, of which
the Port of Tyne is one, to manage marine
operations to nationally agreed standards.
It provides the standard against which the
policies, procedures and the performance
of harbour authorities can be measured.
The Code describes the role of Board
members, officers and key personnel in
relation to safety and navigation, and
summarises the main statutory duties
and powers of harbour authorities. It also
requires an effective marine Safety
Management System be adopted based
on formal risk assessment.
The Port of Tyne’s compliance with the
Code is assured by the operation and audit,
both internal and external, of the Port’s
marine Safety Management System.
In response to a request from the Maritime
and Coastguard Agency (MCA) regarding
Code compliance, the Board of the Port of
Tyne has advised, in a letter dated 2 March
2012, that it has implemented a range of
procedures designed to ensure compliance
with the provisions of the Code.
Environment
The Port achieved ISO 14001 certification
during the second half of 2010 and has
maintained this during 2011. The
certification demonstrates compliance
with relevant environmental legislation,
a commitment to the prevention of
pollution and the implementation of a
programme of continual improvement
and environmental monitoring.
Conscious of the potential impact of
operations on local residents, the Port
commissioned two studies; one to assess
any impact of noise and possible solutions
and the other to identify any sources of
dust that may arise from Port operations
and identify potential solutions.
Extensive audit and engagement with
employees, customers, tenants and
contractors have been undertaken across
the year to ensure that the rigorous
standards of ISO 14001 have been
maintained.
Research commissioned in 2010 by the
Port of Tyne and its partners, ONE North
East, the Environment Agency, Newcastle
City Council and North Tyneside Council
into the quality and flow of sediment within
the River Tyne estuary, indicated that as
well as localised contaminated sediments
associated with specific river bank
industries being evident, other material
emanating from former mine working in the
upper reaches of the South Tyne are also
present within the river system. A second
phase of the study commenced in late
2011 to examine in detail the options and
solutions available to address the issues,
the findings of which are planned to be
available in 2012. In addition to the phase
one funding partners, financial support
for the second phase has also been
provided by South Tyneside Council,
Gateshead Council and Northumberland
County Council.
Customer Focus
Business Development
This review of business development
demonstrates how the Port has embedded
its value of Customer Focus across the
business in 2011.
Developments in the energy sector remain
central to the development of the Port’s
business. In the first full year of handling
wood pellet in partnership with Drax Power,
cumulatively almost one million tonnes of
wood pellets were handled. This resulted
from a 10 year agreement with Drax Power
and the subsequent investment by the
Port in dedicated handling, storage and
associated infrastructure to accommodate
this new cargo. 2011 saw the additional
investment of £2.2 million in two purposedesigned
mobile hoppers to handle wood
pellets, taking the total investment in this
new area of business to in excess of
£20 million.
As part of this programme of investment,
the Port completed the most extensive
dredge of the river in the last 50 years
increasing the channel depth to a record
of 10 metres, and a record 13 metres at
its main Riverside Quay berth. The Tyne
is now deeper than ever before, enabling
the Port to accept 83% of the world’s bulk
carrier fleet.
This development also assisted in driving
up coal import volumes which increased
by 175% in the year to 2.1 million tonnes.
To support the business’s dredging
operations the Port has procured a ‘plough
dredger’ named the ‘Sir Bobby Robson’,
which arrived for trials and crew training
in December 2011. It is a replacement
for the ‘grab dredger’, the ‘Hedwin’, which
was decommissioned after almost 50
years of service.
Rail connectivity is fundamental to the
Port’s multi-modal offering and is key in
enabling the transportation of coal and
wood pellet cargoes to the locations of
power generating customers. During the
year additional rail capacity was created
by the re-opening of the section of line
known as the Boldon East Curve, which
enabled traffic leaving the Port to be routed
in an easterly direction before joining the
East Coast Main Line at Northallerton.