The impact of service privatization-The case of a container terminal at the Port of Limassol

The Cyprus government has signed agreements for the commercialization of the activities of the Port of Limassol, with the aim to increase the financial viability of port operation and sustain competitive advantage. This paper aims to examine effects of and expectation from port privatization based on port stakeholders’ perspectives such as port authorities, concessionaire and port customers. Firstly, this study investigates how the port authority intends to verify and control the performance of the concessionaire with regard to the operational and functional domains that directly influence a container terminal’s performance and to identify all the possible effects of privatization. Secondly, it explores how the concessionaire intends to improve the performance of the container port. Thirdly, it examines port users’ expectations of the services and satisfaction with port services after privatization. A mixed methodology is employed involving interviews and a questionnaire survey with practitioners at the Port of Limassol. The impact of its privatization is provided in the discussion and conclusion section

Port competition and welfare effect of strategic privatization

Private operation of port facilities is becoming increasingly common worldwide and many governments consider the privatization of public ports as a policy option. We investigate the effect of port privatization in a setting with two ports located in different countries, serving their home market but also competing for transshipment traffic from a third region. Each government chooses whether to privatize its port or to keep port operations public. We show that there exist equilibria in which the two governments choose privatization. In these equilibria, national welfare is higher relative to a situation where both ports are public. Since port charges are strategic complements, privatization can act as a valuable precommitment tool for the two governments and allows for a better exploitation of the third region. However, from the perspective of maximizing the joint national welfare of both port countries, there is an inefficiently low incentive to privatize. It is also shown that a country with a smaller home market has a larger incentive to choose private port operation

The Benefits of Port Liberalization: A Case Study from India

In contrast to the rest of India, where it is the government that predominantly owns and manages ports, the Indian state of Gujarat has implemented various forms of port liberalization since the 1990s. This has helped it become the country's fastest growing state. Gujarat's economy has grown at an average of 10.14 percent per year from fiscal year 2001 to fiscal year 2006, the last five years for which data are available. This is comparable with China's average growth rate since 1978, and is distinctly faster than the growth of the other Asian tigers in the 15 years before the Asian financial crisis of 1997. Gujarat has broken new ground with different forms of privatization, ranging from private provision of port services to completely private ownership of new ports. The process started in the 1980s and gathered momentum rapidly after the central government in New Delhi enacted major economic reforms in the early 1990s. Gujarat has taken advantage of a constitutional loophole to convert its minor ports into some of the biggest ports in the country, vastly improved the availability and efficiency of port infrastructure, and facilitated the development of industrial centers that otherwise would not have existed. Gujarat's port liberalization, along with its status as one of the economically freest states in India, should serve as a model for the rest of India and other developing countries, which can also benefit from the dynamic gains of port privatization

Port privatization in an international oligopoly

We investigate how port privatization affects port charges, firm profits, and welfare. Our model consists of an international duopoly with two ports and two markets. When the unit transport cost is large, privatization of ports decreases the prices for port usage, although neither government has an incentive to privatize its port. The equilibrium governmental decisions are inconsistent with the desirable outcome if the unit transport cost is not large enough. The smaller country's government is more likely to privatize its port, although the larger country's government is more likely to nationalize its port to protect its domestic market

Recent Developments in Bulgarian Transport Privatization Policy

Expanding Bulgaria’s political, economic, and cultural cooperation with the countries of Asia is a major priority of the Bulgarian government policy. Transport plays a key role in the implementation of this priority both by providing the necessary conditions for international transit traffic and by meeting the needs of the Bulgarian economy and population. Structural reform in transport to a great extent depends on a sustainable investment policy. At present, prevailing conditions are likely to attract investments, especially to the airports of Sofia and Bourgas. In recent years, the Bulgarian State Railways (“BDZh”) has lagged behind in its development in comparison with the other transport modes in the country and the railways in other European countries. The rehabilitation of the railways is crucial not only for BDZh itself but also for the entire country because the railways are the backbone of the international transport corridors that cross Bulgaria. The management of the Ministry of Transport considers privatization a significant element of the structural reform in the branch. The introduction details how expanding Bulgaria\u27s political, economic, and cultural cooperation with the countries of Asia is a major priority of the Bulgarian government policy, and how transport plays a key role in the implementation of this priority both by providing the necessary conditions for international transit traffic and by meeting the needs of the Bulgarian economy and population. Part I addresses how structural reform in transport to a great extent depends on a sustainable investment policy. Part II focuses on the opportunities which investment in airports present. Part III addresses the advantages of investment in ports. Part IV focusses on Bulgarian State Railways. Finally, Part V addresses how privatization intersects with each of these transport sectors and is a significant element of structural reform

Recent Developments in Bulgarian Transport Privatization Policy

Expanding Bulgaria’s political, economic, and cultural cooperation with the countries of Asia is a major priority of the Bulgarian government policy. Transport plays a key role in the implementation of this priority both by providing the necessary conditions for international transit traffic and by meeting the needs of the Bulgarian economy and population. Structural reform in transport to a great extent depends on a sustainable investment policy. At present, prevailing conditions are likely to attract investments, especially to the airports of Sofia and Bourgas. In recent years, the Bulgarian State Railways (“BDZh”) has lagged behind in its development in comparison with the other transport modes in the country and the railways in other European countries. The rehabilitation of the railways is crucial not only for BDZh itself but also for the entire country because the railways are the backbone of the international transport corridors that cross Bulgaria. The management of the Ministry of Transport considers privatization a significant element of the structural reform in the branch. The introduction details how expanding Bulgaria\u27s political, economic, and cultural cooperation with the countries of Asia is a major priority of the Bulgarian government policy, and how transport plays a key role in the implementation of this priority both by providing the necessary conditions for international transit traffic and by meeting the needs of the Bulgarian economy and population. Part I addresses how structural reform in transport to a great extent depends on a sustainable investment policy. Part II focuses on the opportunities which investment in airports present. Part III addresses the advantages of investment in ports. Part IV focusses on Bulgarian State Railways. Finally, Part V addresses how privatization intersects with each of these transport sectors and is a significant element of structural reform

Port hinterland connectivity

The competitiveness of a seaport depends on the extent the cargo handled in the port can reach its hinterland destination (e.g. Acciaro & McKinnon, 2013). The importance of hinterland connections has been recognised as one of the most critical issues in port competitiveness and development in most ports around the world. Upgrading of facilities and equipment, privatization of port operations and increased sophistication of berth planning have resulted in drastic reduction of ship turnaround times over the last decade. The smoothness of port-hinterland connections has not followed at the same pace. Increasing ship vessel size - and the related emergence of maritime hubs and spokes - will only exacerbate the bottlenecks related to port hinterland connectivity. One of the main issues related to the development of adequate hinterland connections in ports is the need to coordinate multiple actors often with conflicting mandates that constitute the mêlée of private and public institutions governing port hinterland infrastructure development

El punto que le falta al CAFTA

Aunque la motivación del Tratado de Libre Comercio entre Estados Unidos y Centroamérica (CAFTA) con Estados Unidos es generar beneficios para los exportadores e importadores, es probable que los elevados costos portuarios en la región incidan negativamente en esos beneficios. Los costos elevados, junto con las inquietudes sobre la infraestructura, seguridad, eficiencia y productividad, pueden hacer disminuir los beneficios potenciales del CAFTA. Por lo tanto, Centroamérica debe efectuar reformas jurídicas que permitan la privatización de puertos, dado que el sector privado posee los recursos necesarios para invertir en esos puertos y hacerlos competitivos.

Privatization with Government Control: Evidence from the Russian Oil Sector

Governments that privatize state industries often retain control over key distribution assets. While there are many examples of this form of partial privatization, to our knowledge there are no substantial quantitative studies of how governments use their control under these circumstances. In this paper we argue that the Russian government privatization of the oil sector during 1994-2003 is a useful case study because the federal government privatized oil production but retained monopoly control rights over the transport of crude onto world markets. Based on a simple analysis of the costs and benefits of control and ownership, we argue that that in these circumstances the federal government would use its control over transport capacity to provide privileged access to those companies over which it has influence. We find that in 2003 this is indeed the case and that this system detracted from economic efficiency. In particular, private and regionally owned companies had to be much more productive than companies over which the federal government (the state) had influence to receive comparable access to world markets; state-influence companies had preferential access to routes with more capacity; and, the allocation of route capacity was sensitive to transport costs only in the state-influence sector.http://deepblue.lib.umich.edu/bitstream/2027.42/57206/1/wp826 .pd