Port Admins t3M2 WB-çimen

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ANALYSIS OFPORT

OWNERSHIP

&ADMINISTRATION

MODELS

imen KARATA

06.10.2004

Advisor: Dr. Hakk Kii


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TERM3 PROFESSIONAL SKILL1 2

Port Ownership and Administration Models :

Table of Contents

1. Port products

2. Division of responsibilities between the Public and the Private

Sectors

3. Port Authority4. Role of a National Port Authority

5. Role of a Port Operator

6. Role of a Transport Ministry

7. Types of Port Ownership

8. Port Administration Models : the four categories9. Basic Port Management Models

10. Strong & Weak Points of Port Management Models

11. Service Providers Under Different Port Management Models


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Ports activities and new trends

Public Goods :

goods and services that private sector has no incentive to

provide

non-divisible and non-consumable create positive externalities (social benefits) that justify

public intervention. Ex : coastal protection works.

Private Goods :

generate direct economic benefits that can be captured in

market transactions

both divisible and consumable

Ports produce:


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Division of responsibilities between the

Public and the Private Sectors

Public Sector: planner, facilitator and regulator (initialconstruction and port expansion require large amounts of capital)

Private Sector: service provider, operator and developer

Shifting the boundary line (increased private sector

participation): Increased service levels for infrastructure users

Increased efficiency in operations

Raise funds for other public activities

Escape the problems ofbureaucracy


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Port Authority

Ports usually have a governing body referred to as the

Port Authority,

Port Management or

Port Administration.

Definition : State, municipal, public or private body, which

is largely responsible for the tasks ofconstruction,administration and sometimes operation of the port facilities


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Role of a National Port Authority

Statutory powers :

- Investment: approval of proposals forport investment

(accordance with a national plan)

- Financial Policy: setting offinancial objectives for ports

- Tariff Policy: regulation ofrates and charges- Labor Policy: setting common recruitment standarts, wage

structure

-Information and research: facilitation ofdata collection

and research about the port- Legal: acting as legal adviserto local port authorities


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Role of a National Port Authority

Parallel roles :

- Regulation ofshipping and port operations (applyingconventions, laws, rules and regulations)

- Oversight ofnautical operations (all legal and operationaltasks related to safety and efficiency of vessel management in the

port area - harbormasters function)

- Cargo-handlingandstorage

- Port marketingand promotion (attracting specific clients andcargos for specific terminals or services)


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Role of a Port Operator

Private Port Operators:

Stevedoring firms

Cargo-handling companies

Terminal operators

Objectives: (micro-economic)

profit maximization

growth additional market share


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Role of a Transport Ministry

Policy making : planning and development of

ports (location, function and type of management),

basic maritime infrastructure of ports (port entrances,lighthouses)

port hinterland connections (roads, railways)

Legislation : drafting and implementation of transport and port

laws and regulations

International relations : representation of the country in port

and shipping forums, negotiation of agreements Financial and economic affairs : planning, assessing and

assisting in financing projects of national importance

Auditing


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Types of Port Ownership

State Ownership: can cover everything from absolutepoliticalsupervision to State ownership ofmajority shares.

Autonomous: it is non-profit makingand offers a unified

functional admimistration over a functionally defined area.(London, Liverpool before privatisation)

Municipal Ownership: adv: complete cooperation on all the local

needs of the port. disadv: natural unwillingness to cooperate in

any national plan.(Rotterdam, Hamburg, Kobe, Yokohama)

Private Ownership Ports: owned and operated by private

companies and bodies.


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Ports can be classified into four main administration models:

Public Service Port

Tool Port

Landlord Port

Fully Privatized Port or Private Service Port

Criteria consideredfor distinguishing the port administration models;

Public, private or mixed provision of service

Local, regional or global orientation Ownership of infrastructure (including port land)

Ownerhip of superstructure and equipment

Status of dock labor and management

Port Administration Models : the 4 categories


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Port Administration Models

Public Service Port :

the public Port Authority offers all the services required for thefunctioning of the seaport system

e.g. India, Sri Lanka...

main functions of a service port is cargo-handling activities

Tool Port :

the Port Authority owns, operates and maintains the port infrastructure

and superstructure including cargo-handling equipment, with private cargo-

handling companies providing commercial services

e.g. Port Autonomes France container terminal

similarities with public services port in terms of public orientation and

port finance


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Landlord Port :

the Port Authority acts as a regulatory body and as a landlord and port

operations (cargo-handling) are carried out by private companies

e.g. Rotterdam, Antwerp, New York, Singapore since 1997

infrastructure is leased to private operating companies

private port operators provide and maintain their own superstructure

including buildings (office, warehouses, CFS)

private port operators purchase and install their own equipment on the

terminal

dock labor is employed by private terminal operators



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Fully Privatized or Private Service Port :

the port is privately owned, operated and sometimes self-regulated

e.g. ports in UK and New Zealand (few in number)

port land is also privately owned

risk:port can be sold or re-sold for non-port activities, making it

impossible for maritime use.

Reasonsforfull privatization:

To modernize institutions and installationfor making more responsive tothe needs ofport users

To achievefinancial stability andfinancial targets



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Basic Port Management Models


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Strong & Weak Points of Port Management Models

Public Service Port:

Strength: - same organization responsible forsuperstructure & cargo-

handling operations

Weakness: - no private sector involvement in cargo handling operations

- less problem solving capability and flexibility in labor

problems

- lack of internal competition (inefficiency)

- wasteful use of resources and under-investment

- operations are not user or market-oriented

- lack of innovation


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Tool Port:

Strength: - investments in infrastructure and equipment

provided by public sector

Weakness: - cargo-handling operations (public-private) leads

to conflicting situations

- risk of under-investment- lack of innovation



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Landlord Port:

Strength: - single entity (private sector) is responsible for cargo-

handling and owns/operates cargo-handling equipments.

- terminal operators are more loyal to the port and make

investment because of long-term contracts.

- private terminal handling companies knows the market

requirements better

Weakness: - risk of over-capacity

- risk of proper timing of capacity additions



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Fully Privatized Ports:

Strength: - max. flexilibility in investments and port operations.

- no direct government interference

- market oriented port development and tariff policies(ownership of port land)

- strategic location of port land broadens the scope ofactivities

Weakness: - the government loses its responsibility to execute economic

development policy for port business- the government needs to spend more money to buy backthe port area

- risk of speculation with port land by private owners



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WHICHACTIVITIES

ARE PROVIDED BYPUBLIC SECTOR IN DIFFERENT PORTADMINISTRATION MODELS???


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Service Providers Under Different Port Management Models


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THANKS FOR YOUR ATTENTION !!!!

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