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There are three main types of port operating structures: 1) Service Port - The Port Authority provides all commercial services and owns/operates all assets and regulatory functions. 2) Tool Port - The Port Authority owns infrastructure and equipment and rents them to operators, retaining regulatory functions. 3) Landlord Port - The Port Authority owns only basic infrastructure and leases it to operators on long term concessions, retaining regulatory functions. The Landlord and Tool Port structures are usually public bodies, while commercial operators are private. The Service Port can be public or private. Traffic levels are a critical factor in choosing a structure, with Landlord Ports generally requiring over 20 million tons annually to support natural competition among independent service

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58 views1 page

Austral09

There are three main types of port operating structures: 1) Service Port - The Port Authority provides all commercial services and owns/operates all assets and regulatory functions. 2) Tool Port - The Port Authority owns infrastructure and equipment and rents them to operators, retaining regulatory functions. 3) Landlord Port - The Port Authority owns only basic infrastructure and leases it to operators on long term concessions, retaining regulatory functions. The Landlord and Tool Port structures are usually public bodies, while commercial operators are private. The Service Port can be public or private. Traffic levels are a critical factor in choosing a structure, with Landlord Ports generally requiring over 20 million tons annually to support natural competition among independent service

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delivery of port services.

Moreover, the corporate structure of the port entreprise itself


can have a significant bearing on the assets management policy.
C.1.1 Operating Patterns
20.

There are basically three types of port operating structures:


the Service Port: the Port Authority provides all commercial services to ships and
cargo, owns and operates every port asset, and fulfils all regulatory functions;
the Tool Port: the Port Authority owns the infrastructure, the superstructure and heavy
equipment, rents it to operators which carry out commercial operations, and retains all
regulatory functions;
the Landlord Port: the Port Authority owns the basic infrastructure only, land and
access and protection assets, and leases it out to operators, mostly on a long-term
concession basis, while retaining all regulatory functions.

21.
These operating structures can exist regardless of the public/private ownership
pattern; however, the overwhelming trends are as follows:

the Landlord Port and Tool Port Authority are usually public bodies, owning the land
and related assets on behalf of the Government, while the commercial operators leasing
the facilities or renting the superstructure and equipment are private companies;

the Service Port Authority can be either a public entity, as it used to be in former
socialist countries, and in Singapore, or a private one, as is the case in Felixstowe
(United Kingdom), or Hong Kong. Since both Singapore and Hong Kong are
outstanding references as far as productivity of port services are concerned, this could
suggest that to some extent, ownership could be a secondary matter. However, the
Service Port experience in former centralized economies clearly demonstrated its
shortcomings, and the former Port of Singapore Authority was turned in 1997 into PSA
Corporation, a port operating company, while regulatory powers were vested into the
newly created Maritime and Port Authority (MPA); this landlord port authority will
then have to open the field to competition by ensuring market access to potential
competitors/investors.

22.
Since promotion of competition for the provision of port services is one of the main
objectives in implementing port institutional reform, considerations of traffic levels will
come into play when deciding upon the best possible formula for a given situation.
Clearly, traffic levels and structure will be critical factors in electing the most suitable
way to promote competition, or to regulate monopolies when unavoidable. In general
terms, the following basic remarks will hold in most cases:

The Landlord Port formula, according to conventional wisdom, has been for long
considered suitable only for ports enjoying very high levels of traffic--20 million
tons/year or more, excluding petroleum products--allowing for natural competition to
develop among independent service providers, these ones handling each a sufficient

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