Investments in container terminals: public private partnerships

Abstract

The desire to create a more competitive, market based transport system has led to the involvement of the private sector in infrastructure investments. A private financing of transport infrastructure is one of the felds where this trend can be recognised. However, there are also distinct aspects, which make it unattractive to invest in transport infrastructure for private parties. This paper will elucidate the characteristics of investments in infrastructure in general, with the aim to clarify the hesitation under private investors. In addition, one specific category of infrastructure investments, viz. container terminals, will be discussed here as an exception. Container terminals are mostly financed with involvement of private parties. From a comparative study between 'normal' investments in infrastructure and investments in container terminal infrastructure, we will argue that terminals have several features, which lead to a lower risk for private parties, in particular restricted competition in the terminal market and protected monopoly profits, labour productivity gains and fall in unit costs, and a light regulatory framework. Because of these characteristics public private partnerships occur rather often and seem to be attractive. However, without government support it is still not realistic to attract private investment in the terminal market.