KPA Media Workshop - Kenya Ports Authority

Growing prosperity through trade
Kenya Ports Authority
Media Workshop
Port Management Models
Public, Private, Mixed or Other Model
First and foremost: Understanding the nature of the port
• Green or Brown Field ?
• Small local port (County traffic only),
• Regional (more than one County), or
• International gateway (global orientation)
• Location and historical development
– why there and not somewhere else ?
• Types of cargoes handled
– liquid and dry bulk, general cargo, RoRo, containers, others
Public, Private, Mixed or Other Model
Secondly: Why Change?
• bottlenecks to efficient distribution ?
– Restrictive labour practice (associated with outdated methods of cargo handling matching available labour to occasional work)
– Centralized Government control (with slow-paced, rigid and hierarchical planning)
– Limited fiscal space
– Lack of finance
• Is it simple rent seeking ?
• Or White Elephants
“misinvestment” - facilities that were badly matched to traffic demand
Type of Model
Four main categories of ports have emerged over time:
The public service port (Nationally or Municipal /County Owned)
The tool port
Service ports have a predominantly public character and the port authority offers a
complete range of services required for its functioning. The port owns, maintains, and
operates all asset (fixed and mobile), and cargo handling activities are executed by
labour employed directly by the port authority.
Whereby the port authority owns, develops and maintains the port infrastructure and
superstructure including cargo handling equipment . Cargo handling is usually carried
out by private cargo handling firms contracted by port authority.
The landlord port
Which is characterized by its mixed public-private orientation. Under this model, the port
authority acts as regulatory body and as landlord, while port operations (especially cargo
handling) are carried out by private companies (using their own equipment) . Typically
infrastructure is leased to the private company and today, the landlord port is the
dominant model in larger and medium sized ports.
Types of Model
The fully privatized port
– In fully privatized ports (or private service ports) all land, infrastructure and
superstructure is owned by private entities – often who are self-regulating. The state
generally has little involvement of public policy interest.
Everything In-between
Strengths and Weaknesses
Options Depend on Business Model
Critical to understanding how the port tariff works
Marine Services
Marine Infrastructure
Cargo Infrastructure
Cargo Handling Services
Tariff Item
Pays for
Pilotage Services
Tug Services
Mooring and Unmooring Services
Other Services -MARPOL Provisions, Water
Navigation Dues
Port Entrance Dues
Dockage and Buoyage
Vessels, Operating Costs
As above
As above
Services rendered to ships
Aids to Navigation/VTS
Capital and Maintenance Dredging
Quay and Port Facilities
Sometimes set below
full infrastructure
recovery cost to
attract shipping lines
Subsidised by other
port charges,
especially wharfage)
Cargo dues or Wharfage (Ad Valorem)
Port Land, Roads, Rail, Utilities etc.
Additional space requirements due high
dwell time
Shore Handling
Sometimes on an ad
valorem basis - i.e.
based on the
customs declared CIF
value of the cargo
Equipment and Labour costs for loading and offloading Ships
Equipment and labour for handling cargo in yards/sheds
Packaging (Dry Bulks)
Required Steps
• Options Analysis and Strategic Preparation
– Confirm affordability, value for money, form of PPP and risk sharing
– Identify constraints (for Brown Fields, establish labour task force)
– Establish the capacity if the private sector to deliver the project
– Identify indirect costs
– Undertake comparative assessments
Some Do’s and Don’ts
When facing a port’s capacity shortage, envisage more
optimal use of the existing capacity
When facing port’s capacity shortage, immediately consider
constructing new facilities
Conduct a careful assessment of the way the sector operates
before investing in port infrastructure: understand demand
before changing supply.
Necessarily privatize/concession a container
terminal to reduce dwell time.
Inform public decision makers at highest levels (prime
minister, ministries of economy and finance) on the need to
implement public governance–related actions to build a broad
coalition to change the equilibrium. This should include
thorough analysis of the economic cost of poor system
performance to the national economy.
Sensitize the local population and trading communities on the
importance of port clearance performance and the proper
calculation of total logistics costs.
Identify port performance indicators with a benchmark pegged
to the most efficient shippers in the port.
Support measures that create new rents and reduce system
transparency, such as proliferation of off-dock container
Consider as a given that everybody is aware that transport and
port “costs” are high, and address the issue of port delays
only from a monetary cost perspective.
Report averages only with no distinct evaluation of good,
average, and poor performance
Can be a win-win
Private Participation allows one to think-out-of-the-box

similar documents