The changing nature of port consultancy: A view of the future

The introduction of private investment has dramatically affected port operations world wide and perhaps the United Kingdom can claim to be the instigator of this process. However, whereas in the UK we have gained a variety of privatisation models, all in action alongside one another, the wider world has been able to learn from our experience and to select some of the more practical and successful solutions for their own industry. The changes in the organisation and regulation of ports have led to changes in the way consultants are used in the industry and may lead to further changes in the future.

Privatisation versus strategic planning

In the UK, possibly the earliest country to privatise, we have gained a variety of port systems including fully privately owned ports, competing with each other for present and future trade. This may have reduced the opportunity to develop a national strategy.

Privatisation has quickly become the goal for governments all over the world due to the advantages, real or perceived, of attracting private investment. Even the more socialist governments are installing or looking to install models that have an element of private enterprise.

However, the world has been slower to sell off permanently the assets and has tended instead to opt for a model which keeps some asset value and strategic control within government and allows the concession of terminal facilities for periods of 20 to perhaps 50 years.

Privatisation structure

A commonly found model for a major seaport is along the lines of the following structure:

• Government Department/Regional Port Authority. This regulatory body sits at Government level and may have jurisdiction over all ports in a region, state or even the whole country.

• Port “Company” with responsibility for the enclosing infrastructure such as breakwaters and approach channel and also vessel traffic management services. The Company may also operate directly services that are needed locally but may not be practical to let out to concession (e.g. cruise berthing, break bulk). There may be a degree of independence and facility for operating as a profit making company but this operation level will not be available for take over or sale. The Company may develop capacity for free zone/SEZ areas where permitted by Government or State legislation.

• Concession operators operating (and possibly building) their own terminals and wharves for container traffic, oil and gas, roll on – roll off facilities etc. These operators will be able to construct their own berths and buildings, purchase their own equipment etc. providing the concession term is long enough to allow pay back.

• Other operations such as stevedoring may be let as concessions or may be handled by the concession holders.

• Outsourcing of services and facilities to private companies whilst retaining overall responsibility for that function (for example vessel traffic management or some port security services).

Funding

Funding by international development banks such as the World Bank, the Asian Development Bank (ADB) and the Inter-American Development Bank (IADB) now seems to be limited to assistance with higher level studies associated with strategic planning. EU funding is however still finding its way into infrastructure construction in countries that are benefiting from EU support with opportunities to consultants as “Independent Engineer”.

Commercial banks are lending to the private development sector providing consultants with work as “Lenders Engineer.”

Pressures on the ports

Increasing size of container ships

The “China” syndrome is driving an increase in vessel size and,
in order to stay competitive, ports are having to plan for ever
larger container ships or risk losing their trade, almost overnight,
to another port. This does not just mean deepening the berths
and access (though this is difficult enough) but will also require
larger cranes and compatible container handling facilities and
logistics in the container parks.

To read the full article download PDF

Ken Bunker, B Sc, C Eng, FICE, FGS, Mott MacDonald, Croydon, UK
Edition: Edition 27

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