Public Private Participation

William Demoor

10th July 2015

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1Introduction to the port of Antwerp

Development of the port

River Scheldt Road infrastructure Border Port area Before the 19th century: Old river

port 1811 – 1930: Renovation of old

port and expansion to the north as far as the Van Cauwelaert lock

1951 – 1965: Marshall Plan, construction of the petroleum port and expansion of docks as far as the Dutch border

1970 – 2000: expansions until the turn of the century

2000 - ....: Recent developments

Facts & Figures: Cargo handling 2014

199mio ton

Break-bulk14 mio

ton

Liquidbulk63 mio

ton

Dry bulk14 mio

ton

Con-tainers108 mio

ton

2nd European port

1. Rotterdam

2. Antwerpen

3. Hamburg

Balanced import and export flows

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

0

50

100

150

200

250

LoadedUnloaded

Million tons of maritime traffic

Volatility in world trade

5

Major disruptions with an important impact on world trade:- Financial crisis, Eurocrisis, Monetary policies Central Banks- Geopolitical crisis: e.g. Ukrain, Middle East- Shifts in the energy market: shale gas, Fukushima,….- New trade routes, new alliances (O3, G6, M2,…),

Source: ITMMA and ING

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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Port of Antwerp Trade EurozoneGrowth GDP Belgium Growth GDP GermanyGrowth GDP Eurozone

Economic and trade growth in the Eurozone vs. throughput growth in the Port of Antwerp

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• The two growth segments (containers and liquid bulk) are expected to keep on developping.

• The port of Antwerp shows similar evolutions to the Eurozone(slightly more extreme).

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2Towards a pro-active landlord

Port authority as enabler and facilitator of sustainable growth

Services & tools port

Landlord portPro-active landlord port

Time

SizeNew sustainable growth path

Ad hoc, re-active, competitive approach Integrated, pro-active, collaborative approach

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Port Authority(public)

Management of territory:• investments• concessions

Management of Infrastructure:• docks, quays• bridges, locks• land

Trade facilitation Vessel traffic management Marketing & Branding

Port companies(private)

Management of superstructure:

• terminals

• cranes

• equipment

• warehouses

Handling of the cargo

Landlord model : Successful cooperation

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The Antwerp Port Authority isan autonomous body, managing

Infrastructure– docks– bridges– locks– quays – land

Vessel traffic in the port Trade facilitation Marketing & branding activities

Organisation in the Port of Antwerp

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The private companies manage superstructure and operate the terminals:– terminals– cranes– equipment– Warehouses

More efficiency in spending public money and increase in expertise.

A landlord port

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- What is a Concession in the European context

- Tendering procedures

- Key factors of negotiation: Duration - Investments Price Productivity clauses: efficient use of space, tonnage obligations

Concession Policy

13

3Concessions

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Landlord Port

The port of Antwerp is a landlord port. The port authority owns most of the port grounds and administrates the infrastructure.

Concession

‘an administrative contract by which a public authority grants a private partner the right of use of a part of a public good (e.g. public domain) for a given time’

Concessions - introduction

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Basic principle:

principle of equality (good governance)

Tendering: public objective transparent

Concessions - allocation

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Tendering procedure:

- Main focus = kind of activity, employment, traffic generation, added value, investments,…

ǂ maximising profit for the port authority

- How? : decision is based upon objective criteria

Concessions - allocation

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Value added Logistics

Industry Cargo handling

Realising unique synergies

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Case : Churcill Industrial Area

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- Financial: PPP means enough financial means for core business

Concessions - prices

Private FinancingPublic Financing

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Parameters for Price setting

Location (quay/land)State of grounds (paved/unpaved)Nature of planned activity

(traffic generating activities / services to traffic generating /other services)

Specific tariffs for: Private parking facilities

Concessions - prices

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- Port dues /revenues of the exercise of the port management competences and other activities.

- Investments/financial responsibility of the Flemish Region : the construction, the maintenance and operation of the maritime gateways and the basis infrastructure of the port (except port internal basis infrastructure, e.g. the docks).

- Subsidies by the Flemish Region (specific Executive Orders by the Flemish Government): e.g. for the maintenance of the sea locks, for investments in port internal basis infrastructure and equipment infrastructure (e.g. commercial mooring facilities for transshipment).

If the port managerial competencies are not exercised in conformity with the Port decree, the subsidies can be withdrawn /recovered.

Financing of the port authority

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Revenues Antwerp Port Authority

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Determination of the term of the concession agreement based on following criteria:

Planned investment in real estate

Decisive factors for activities on the quay:• Quality of the project• Planned lay-out/efficient use of space• Projected traffic generation

Concessions - terms

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Maximum duration of 40 years (maritime) / 30 years (services)

Duration linked with investments/m²

Table of investments Duration

Investment >= 375 EUR/m² builded surface 40 ans

225 EUR/m² <= investment < 375 EUR/m² builded surface 35 ans

175 EUR/m² <= Investment < 225 EUR/m² builded surface 30 ans

150 EUR/m² <= Investment < 175 EUR/m² builded surface 25 ans

125 EUR/m² <= Investment < 150 EUR/m² builded surface 20 ans

100 EUR/m² <= investment < 125 EUR/m² builded surface 15 ans

25 EUR/m² <= Investment < 100 EUR/m² builded surface 10 ans

0 EUR/m² <= Investment < 25 EUR/m² builded surface trimestre

Concessions - terms

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Special clauses to stimulate productivity :

Efficient use of spaceMinimum tonnage Use of modern technologies for container handling

Concessions - productivity

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Case: Deurganckdok

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Existing measures• Use of modern technologies for container handling (e.g. stacking)• Obligation to inform the port authorities about the planned lay-out, the

handling techniques, the projected traffic etc.

New measures• Special clause regarding to an efficient use of space

Evaluation every five year Possibility to add special clauses to enhance efficient use of

space

Concessions - efficient use of space

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