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Seaports - Case Study Example

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Actually, the participation of private sector has already crept into some of the major ports in the world (Anon, 1996). The issue of privatization has gained more importance in the backdrop of globalization and liberalization moves sweeping across the world.
However, the experience of the management of some ports like the Singapore port has clearly established that total privatization is not the panacea for the ills faced by several ports today. Systematic management of port operations with the public-private participation will go a long way in making them sustainable financially.
There are three essential factors of a port which can be privatized; port land, port operations, and port regulations (Baird, 1999). The extent of privatization can differ within ports depending on which of these elements are transferred to private sector from public sector. We can get a wider concept from Table 1 shown below. In the private model I, port operations are transferred to private sector, and this type of arrangement is referred to as a 'landlord' port. When compared with private model I, private II model has two elements which are property and operations rights. Under the private III model, all three essential functions are controlled by private sector. At present, this kind of model is only accepted by ports in the UK, such as Liverpool, Manchester and Felixstowe.

Table 1. Key Port Elements: Privatization Options

Source: Baird A., 1999

International Association of Ports and Harbours (IAPH) did a survey of world's top-100 container ports to find out the organization type. Figure 1 presents ample statistics results which say that 71% of ports were managed by either public agencies or corporations, and 21% by Government departments. Only 7% of ports were private companies, and over two-thirds have a government shareholding varying from 60-100% (Baird, 2002).

Figure 1. Port authority by organization type

Source: IAPH, 2002

UK- Pioneer in Port privatisation
Great Britain has pioneered port privatization showing the way for the rest of the world. Most countries have taken a cue from Great Britain's success in this direction. Until now, the UK is the only country which has totally privatized most of its major ports including the operational role of the port authority( ). The political leadership of the UK was very much practical in inviting private funding in port management. It always wanted to create favourable atmosphere to pave the way for private operators to jump in the fray. According to the House of Commons report, Port of London Authority strongly believed that private funding was the only alternative to refurbish the port industry and suitable and supporting atmosphere must be created to invite the private companies. It was very much worried that in the absence of a conductive atmosphere to private funding, investors might run away to some other countries ( ). The UK has obviously set a trend for other countries to follow. Most of the third world countries have also been looking for the British help in privatization of their ports ( ), such as India, Panama.

Is the privatisation only solution
Most of the third world countries plan to privatise their ports. But, is privatisation the only real solution Management of ports is very complex and involves several ...Show more


Seaports are a major economic multiplier for the nation's prosperity (Alderton, 1999). All over the world, they have been continuously facing the threat of privatization for many years. As ports are the key centres in a country's supply chain system of import-export and distribution of goods, the issues of proper governance and scientific management of ports have gained importance through out the world…
Author : federicoharvey
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