Privatization and Regulation of the Seaport Industry

64 Pages Posted: 20 Apr 2016

See all articles by Lourdes Trujillo

Lourdes Trujillo

Departamento de Analisis Economico Aplicado; University College of London (UCL)

Gustavo Nombela

Independent

Date Written: November 1999

Abstract

Containerized shipping has brought profound changes to maritime transport, including a shift from labor-intensive to more capital-intensive activities. Revising the traditional organization of seaports everywhere will prepare ports for a more competitive market and less financial dependence on governments.

With containerized shipping, maritime transport has changed profoundly. Among other things, it has shifted from labor-intensive to more capital-intensive activities, including larger specialized ships that require substantial investments in port infrastructure and equipment.

Integrated transport chains have reduced transport costs so much that a shipper may find a distant port cheaper than a closer one. Modern ports must be competitive on times and prices for their services.

Seaports must be integrated within logistical chains to serve their many functions. An efficient seaport requires infrastructure, superstructure, equipment, adequate connections to other modes of transport, a well-motivated management, and qualified employees.

The public sector has been an important port organizer in the past, but private participation in port operations and infrastructure could make ports significantly more competitive.

Trujillo and Nombela provide an overview of changes in maritime activity, discuss concession contracts (a key instrument of privatization), and analyze how regulatory mechanisms affect such factors as seaport tariffs, port congestion, port safety, the quality of cargo handling, and relevant indicators of performance, finances, and factor productivity.

They describe how an optimal seaport system should allocate tasks between the various institutions involved, including the port authority.

The degree of a seaport`s decentralization, they conclude, depends on a country's size, the number of ports it has, and its legal tradition. Among several national governments in Latin America - Argentina, Brazil, Colombia, Mexico, and Venezuela - there is an evident trend toward decentralization and greater autonomy for port authorities.

This paper - a product of Governance, Regulation, and Finance, World Bank Institute - is part of a larger effort in the institute to increase understanding of infrastructure regulation. Gustavo Nombela may be contacted at nombela@empresariales.ulpgc.es.

Suggested Citation

Trujillo-Castellano, Lourdes and Nombela, Gustavo, Privatization and Regulation of the Seaport Industry (November 1999). Available at SSRN: https://ssrn.com/abstract=623975

Lourdes Trujillo-Castellano (Contact Author)

Departamento de Analisis Economico Aplicado ( email )

Universidad de Las Palmas de Gran Canaria
Campus de Tafira
Las Palmas de Gran Canaria, Las Palmas 35017
Spain

University College of London (UCL)

Chadwick Building
Gower Street
London, London WC1E 6
United Kingdom

Gustavo Nombela

Independent

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