LONDON - The European Union is about to unveil a long-awaited plan to boost competition in its ports and pave the way for an assault on state subsidies.
The main aim of the proposals by European Transport Commissioner Loyola de Palacio is to ensure open and transparent procedures in the awarding of concessions for port services such as cargo handling, pilotage and towage.
The proposals, which were expected to be released in December, now are likely to come this month, perhaps as early as next week.
The European Commission, the EU’s executive arm, is concerned that in many publicly-owned ports contracts are reserved for local interests, and foreign bidders are automatically excluded. The commission is considering a plan that would transfer responsibility for awarding contracts from the ports to independent third parties appointed by the EU member states.
A report on port financing and how state aid is affecting competition between the EU’s ports will accompany the EU’s draft directive.
The commission’s outline proposals have drawn fire from Britain’s largely privatized port industry, which fears it will suffer more than the mostly state-owned operators on the continental mainland. Chris Gray, chairman of the UK Major Ports Group and chief executive of Hutchison Ports (UK), warned that the EU’s “well-intentioned” plan could deter investment in the industry.
Hutchison Ports operates Felixstowe, Britain’s largest container port.
Continental European ports are usually “landlords” that own waterfront facilities and will not be affected by changes in the way concessions are awarded, the British ports argue. By contrast, most British ports handle port services such as cargo handling themselves, and would suffer if those services are awarded to someone else.
The commission’s reform program risks being overtaken by events as large global port companies such as Britain’s P&O Ports, Germany’s Eurogate and Hong Kong-based Hutchison Ports move onto Europe’s waterfronts by acquiring major container handling terminals and building new facilities.
The arrival of private capital has forced European ports to open up to outside interests to maintain their competitive position. Antwerp, once a stronghold of local stevedores, has attracted significant foreign investment, including the acquisition by P&O Ports of two major cargo-handling companies. In addition, four British financial institutions are competing with the PSA Corp. and Eurogate for a stake in a company being formed by the merger of the port’s top two stevedores, Hessenatie and Noord Natie. P&O also won a 50-year concession for a 1 million TEU-per-year container facility, the first all-foreign success in a previously closed bidding process.
The market position of major publicly run ports also has been hurt by new privately-owned transshipment facilities in greenfield sites, particularly in Italy where newcomers like Giao Tauro already handle more containers than Genoa, the country’s main port.
