It is now widely acknowledged that modern ports must fulfil a multitude of different roles.
They are vital to national economic interests, especially for developing countries where port costs can make the difference between goods being competitive or uncom-petitive on world markets; they are centres for maritime, industrial and distribution ac-tivities and as such act as "growth poles" for the local, regional and even national economy, as in the case of Antwerp (Belgium) or Rotterdam (the Netherlands); and they are "functional elements" in the global logistics systems and "value chains" of international shipping lines, shippers, and multi-modal, transnational logistics companies.
It is the latter role that is perhaps the main driver of current developments, with trans-national companies seeking to integrate a variety of different transport modes and of-fer "door-to-door" services to major customers.
These companies might be international shipping lines or their subsidiaries (eg Maersk-Sealand-APM Termi-nals), global terminal operators such as Hutchison Port Holdings and PSA Interna-tional, forwarders and trucking companies (eg Kuhne Nagel and Transplace), rail operators (eg Stinnes-Railion and ABX) or "integrators" such as UPS and FedEx. These companies operate on the principle of lower port costs, higher productivity, and more reliable ser-vices covering world's major ports, where they are often willing to make significant in-vestments, as well as embark upon setting up a reliable network of "feeder" ports that make up their global network of routes/services.
To accommodate these changes, ports are now moving towards a concept based on "landlord" model of port organisation and administration. This model is not only advocated but encouraged by the World Bank, UNCTAD and port management groups such as the Southern African Development Community and the Port Management Association of Eastern and Southern Africa as an efficient management tool. In slide the landlord model is contrasted with public and private service port models (where the lead party responsible for the port provides all the major investment and essential services) and the tool port model (where the public sector provides for all the tools necessary for port services to be offered to users, but services are provided mainly by the private sector).
PUBLIC-PRIVATE ROLES IN PORT MANAGEMENT:
They are vital to national economic interests, especially for developing countries where port costs can make the difference between goods being competitive or uncom-petitive on world markets; they are centres for maritime, industrial and distribution ac-tivities and as such act as "growth poles" for the local, regional and even national economy, as in the case of Antwerp (Belgium) or Rotterdam (the Netherlands); and they are "functional elements" in the global logistics systems and "value chains" of international shipping lines, shippers, and multi-modal, transnational logistics companies.
It is the latter role that is perhaps the main driver of current developments, with trans-national companies seeking to integrate a variety of different transport modes and of-fer "door-to-door" services to major customers.
These companies might be international shipping lines or their subsidiaries (eg Maersk-Sealand-APM Termi-nals), global terminal operators such as Hutchison Port Holdings and PSA Interna-tional, forwarders and trucking companies (eg Kuhne Nagel and Transplace), rail operators (eg Stinnes-Railion and ABX) or "integrators" such as UPS and FedEx. These companies operate on the principle of lower port costs, higher productivity, and more reliable ser-vices covering world's major ports, where they are often willing to make significant in-vestments, as well as embark upon setting up a reliable network of "feeder" ports that make up their global network of routes/services.
To accommodate these changes, ports are now moving towards a concept based on "landlord" model of port organisation and administration. This model is not only advocated but encouraged by the World Bank, UNCTAD and port management groups such as the Southern African Development Community and the Port Management Association of Eastern and Southern Africa as an efficient management tool. In slide the landlord model is contrasted with public and private service port models (where the lead party responsible for the port provides all the major investment and essential services) and the tool port model (where the public sector provides for all the tools necessary for port services to be offered to users, but services are provided mainly by the private sector).
PUBLIC-PRIVATE ROLES IN PORT MANAGEMENT:
LANDLORD PORTS AND SOCIAL DIALOGUE:
While there is a clear growing tendency towards the landlord model, change is not considered as a discrete or linear process and there is possibility of considerable differentiation within the same port over a period of time. For example, a private concession for the port's container terminal under a landlord model might co-exist with a tool port model for general break-bulk car-goes.
This can raise questions about equal access to available work opportunities. For example, will workers employed at the container terminal enjoy more secure and better paid work? Will employment at the general/break-bulk terminals decline as a result, and who will pay for severance and retirement if the lion's share of the port's revenue is now generated and appropriated by the private sector in a "separate" part of the port?
When port authorities assume status as landlords, new forms of public-private sector dialogue is warranted to ensure the representation of different interest groups. There are ex-amples of good practices from outside and inside of the port industry. Many ports al-ready have institutions that provide opportunities for dialogue between the public sector port authority, private sector operators and user groups. Whereas other ports have been reformed to give users more flexibility as to how the port functions;' one such example is the establish-ment of Canada Port Authorities for the country's major commercial ports.
According to both UNCTAD and the World Bank, private sector participation in ports, and indeed any form of structural adjustment, should be primarily about pro-moting competition. UNCTAD, for example, asserts that port reform "should have a single overall objective - to make the port responsive to the market and thus satisfy cli-ent's needs. Reform will be successful as long as this objective is reached." On the more specific issue of social dialogue, the World Bank recognises the value of participation in decision-making but seems to regard the principal purpose of such activity to be the promotion of competition.
Participation will allow all stakeholders to share common concerns about competitiveness of port services and gain better un-derstanding of how any weakening of this competitiveness would be detrimental to all. If decent work is to be preserved, or in many ports to be more firmly established, then social dialogue should also address questions of employment security, fair remuneration, training and development, health and safety, equality of opportunity and the avoidance of any formal discrimination, and work-life balance.
Research evidence shows that where worker representatives are involved in the pro-cess of port reform, any adverse effects on dockers' terms and conditions of employ-ment can be alleviated. The example of Spanish port reforms, demonstrates how decent work can be an integral part of the reform process.
PRIVATE SECTOR PARTICIPATION (PSP) IN PORTS:
Most observers agree that, in an increasingly global world economy, ports must improve their efficiency if they are to become an integral part of new Interna-tional logistics networks and support their national economic objectives for trade growth and social prosperity. Private sector participation (PSP) in ports is widely regarded as one of the most effective means to achieve these goals.
In many ports, however, PSP has led to a significant reduction in employment, often accompanied by inferior pay and conditions for those who retain their jobs. Nonetheless, most port and maritime unions no longer oppose PSP as a matter of principle, but demand that any changes are introduced in consultation with port workers to keep job losses to an abso-lute minimum, to protect wages and working conditions as far as possible, and to en-sure that proper training is provided and health and safety standards maintained or improved.
The why and how of PSP in ports
Surveys of the world's major ports reveal that PSP is driven primarily by the desire to increase efficiency and reduce costs, although many ports also cite the expansion of trade and reducing the burden of public sector investment. Amongst African ports, the main objectives of PSP are, likewise, to enhance efficiency and improve the qual-ity of service, as well as the modernisation of infrastructure and the reduction of cost.
The overriding objective, it seems, is "to make the port responsive to the mar-ket and thus satisfy clients' needs. Also, "successful ports have one thing in com-mon - they are all highly market-oriented, while unsuccessful ports are not."
There are many different ways to involve the private sector in the port industry. In fact, a wider range of reform models and public-private partnership formats exist for the delivery of port services than for any other infrastructure intensive sector. Slide summarises different agreements for increased PSP.
EXAMPLES OF PRIVATE SECTOR PARTICIPATION:
While there is a clear growing tendency towards the landlord model, change is not considered as a discrete or linear process and there is possibility of considerable differentiation within the same port over a period of time. For example, a private concession for the port's container terminal under a landlord model might co-exist with a tool port model for general break-bulk car-goes.
This can raise questions about equal access to available work opportunities. For example, will workers employed at the container terminal enjoy more secure and better paid work? Will employment at the general/break-bulk terminals decline as a result, and who will pay for severance and retirement if the lion's share of the port's revenue is now generated and appropriated by the private sector in a "separate" part of the port?
When port authorities assume status as landlords, new forms of public-private sector dialogue is warranted to ensure the representation of different interest groups. There are ex-amples of good practices from outside and inside of the port industry. Many ports al-ready have institutions that provide opportunities for dialogue between the public sector port authority, private sector operators and user groups. Whereas other ports have been reformed to give users more flexibility as to how the port functions;' one such example is the establish-ment of Canada Port Authorities for the country's major commercial ports.
According to both UNCTAD and the World Bank, private sector participation in ports, and indeed any form of structural adjustment, should be primarily about pro-moting competition. UNCTAD, for example, asserts that port reform "should have a single overall objective - to make the port responsive to the market and thus satisfy cli-ent's needs. Reform will be successful as long as this objective is reached." On the more specific issue of social dialogue, the World Bank recognises the value of participation in decision-making but seems to regard the principal purpose of such activity to be the promotion of competition.
Participation will allow all stakeholders to share common concerns about competitiveness of port services and gain better un-derstanding of how any weakening of this competitiveness would be detrimental to all. If decent work is to be preserved, or in many ports to be more firmly established, then social dialogue should also address questions of employment security, fair remuneration, training and development, health and safety, equality of opportunity and the avoidance of any formal discrimination, and work-life balance.
Research evidence shows that where worker representatives are involved in the pro-cess of port reform, any adverse effects on dockers' terms and conditions of employ-ment can be alleviated. The example of Spanish port reforms, demonstrates how decent work can be an integral part of the reform process.
PRIVATE SECTOR PARTICIPATION (PSP) IN PORTS:
Most observers agree that, in an increasingly global world economy, ports must improve their efficiency if they are to become an integral part of new Interna-tional logistics networks and support their national economic objectives for trade growth and social prosperity. Private sector participation (PSP) in ports is widely regarded as one of the most effective means to achieve these goals.
In many ports, however, PSP has led to a significant reduction in employment, often accompanied by inferior pay and conditions for those who retain their jobs. Nonetheless, most port and maritime unions no longer oppose PSP as a matter of principle, but demand that any changes are introduced in consultation with port workers to keep job losses to an abso-lute minimum, to protect wages and working conditions as far as possible, and to en-sure that proper training is provided and health and safety standards maintained or improved.
The why and how of PSP in ports
Surveys of the world's major ports reveal that PSP is driven primarily by the desire to increase efficiency and reduce costs, although many ports also cite the expansion of trade and reducing the burden of public sector investment. Amongst African ports, the main objectives of PSP are, likewise, to enhance efficiency and improve the qual-ity of service, as well as the modernisation of infrastructure and the reduction of cost.
The overriding objective, it seems, is "to make the port responsive to the mar-ket and thus satisfy clients' needs. Also, "successful ports have one thing in com-mon - they are all highly market-oriented, while unsuccessful ports are not."
There are many different ways to involve the private sector in the port industry. In fact, a wider range of reform models and public-private partnership formats exist for the delivery of port services than for any other infrastructure intensive sector. Slide summarises different agreements for increased PSP.
EXAMPLES OF PRIVATE SECTOR PARTICIPATION:
Source: ADB (2000), p. 30.
There is no doubt that PSP is increasing in the world's ports, although public owner-ship of port infrastructure is still the norm. In 1992, the World Bank recorded US $304 million private sector investment in developing countries' ports.
By the turn of the millennium this figure had reached US $2,632 million. In 2003 there were 325 port investment opportunities reported for private investors, of which around a quarter were PSP projects. In northern Europe, the acquisition of current facilities made up 44 percent of the opportunities while in South Asia, in contrast, almost 80 percent were green-field, build-operate-transfers and joint partnership opportunities.
Among developing countries, African ports arguably have the greatest need for new investment to modernise equipment and improve port infrastructure. During the 1990's, however, the African continent received only 5 percent of the total investment flows to developing countries relating to PSP in infrastructure. African ports are generally viewed as a high-risk investment, local banks are often unprepared to grant long-term credit, and global operators are uncertain whether they can generate sufficient traffic to justify investment.
There have often been severe delays, numerous false starts and a number of failed attempts with PSP, as illustrated in the case of Mombassa (Kenya), when Felixowe Management made a departure for not receiving cooperation from Kenyan Port Authorities.
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