World Bank Port Reform Toolkit
Module 1Framework for
Port Reform
Module 12World Bank Port Reform Toolkit
Benefits and beneficiaries of a Port Reform
•Governments : external trade competitiveness is improved and the financial burden on national budgets eased
•Transport and Terminal Operators : port operations and services are more cost-effective
•Shippers, exporters, importers : port costs are reduced, maritime freight rates are lower
•Consumers : lower-priced goods and better access to a wider range of products
Module 13World Bank Port Reform Toolkit
Forces stimulating Port Reform
•External forces of competition and technology from the shipping industry
•Acknowledged financial and operational benefits of PSP in infrastructure development and service delivery
•Diversification and globalization of investors and operators
Module 14World Bank Port Reform Toolkit
Toward a modern service-oriented port…
•Core services :
•Value added services :
MarineTerminalRepairEstate ManagementInformation Management Services
General Logistics services
Value Added Logistics Services
Module 15World Bank Port Reform Toolkit
Core services : Public delivery or out-sourcing ?
•Identify the critical basic public functions and responsibilities to be assured by public authorities in charge of the port sector
•Identify the assets needed to support each function and category of service
•Assess optimal conditions for service delivery based on:
Nature of the service : public/commercial
Nature of the required assets
Module 16World Bank Port Reform Toolkit
Public-private roles in Port Management
Module 17World Bank Port Reform Toolkit
Setting Reform Objectives
•Reform is a means to achieve specific and well defined public interest objectives
Risk and return on social capital
Specific conditions of the particular ports to be reformed (size, operating scale, physical constraints, cargo flows, …)
•Those objectives must take into account :
Services/missions to be retained in the public domain
Module 18World Bank Port Reform Toolkit
Decision Tree
Module 19World Bank Port Reform Toolkit
Key Reform Decisions (1/8) : Methods of private sector involvement
Institutional options : Public service port ? Tool port ? Landlord port? Private service port? Choose the best solution fitting YOUR port
Assets Restructuring : What degree of competition should be designed into port service markets ? What assets should be tendered as packages for single source responses?
Module 110World Bank Port Reform Toolkit
Key Reform Decisions (2/8) : Public Interest Oversight
•What powers and authorities should be retained by a public oversight body after reform ?
•Should that public oversight body be … centralized, decentralized, two-tiered ?
Commercial activities should be carried out by the private sector
Strategic planning, technical regulation and economic regulation should be undertaken by the public sector
Module 111World Bank Port Reform Toolkit
Legal/Institutional setup
Central body (ministerial level)
Port authorities
Private operators
Module 112World Bank Port Reform Toolkit
Key Reform Decisions (3/8) :Financial Risk
•Which categories of port assets should private investors and public sector be at risk for providing ?
•On what basis should user fees or subsidies be used to cover the cost of long-lived port assets ? (Users pay or tax-payers pay)
Module 118World Bank Port Reform Toolkit
Pulling it all together
World Bank Port Reform Toolkit
IAME Panama 2002 Track B
“After the Privatizations:
The need for Port Regulation”
Track B20World Bank Port Reform Toolkit
Themes for discussion
1. Is Regulation necessary?
2. Forms of Regulation
3. Institutional location of Regulation
4. Regulation and Investment
5. Regulation and Strategic Development
Track B21World Bank Port Reform Toolkit
Is Regulation necessary?
1. Imperfect contracts
2. Unforeseen circumstances
3. Alternative mechanisms/insitutions
4. Existence of an efficient market
Track B22World Bank Port Reform Toolkit
Forms of Regulation
Aims of regulation: productivity, investment, tariffs
Best form depends on:
- possible inter- or intra- port competition
- natural monopolies
- other models of private sector participation
Track B23World Bank Port Reform Toolkit
Insitutional location of regulation
Ministry of Commerce Ministry of Transport
Regulatory Agency
Port Administration Maritime Administration
Terminal Operators Commons
Track B24World Bank Port Reform Toolkit
Regulation and Investment
1. Forms part of contract
2. Initial works, future investment
3. Voluntary/involuntary
4. Changing circumstances
5. Different bottom lines
Track B25World Bank Port Reform Toolkit
Regulation & Strategic Development
We are regulating for the future not the past
Next generation of container ship: channel, berths, land, road and rail accesses
Who will pay for the Commons?
Track B26World Bank Port Reform Toolkit
Finally …….
Does Regulation work?
Are the nation’s ports optimal for national needs?
Who regulates the Regulator?
Role of the Press and Public Opinion