CAP-HAÏTIEN PORT REGULATORY STRENGTHENING PROJECT

CAP-HAÏTIEN PORT

REGULATORY

STRENGTHENING PROJECT

BENCHMARKING REPORT

July 2016, Revised October 2016

This publication was produced by Nathan Associates Inc. for review by the United States

Agency for International Development.

CAP-HAÏTIEN PORT

REGULATORY

STRENGTHENING PROJECT

BENCHMARKING REPORT

Activity Title: Cap-Haïtien Port Regulatory Strengthening Project

Sponsoring USAID Office: Economic Growth Office

Contract Number: AID-521-C-16-00003

Contractor: Nathan Associates Inc.

Disclaimer

This document is made possible through the support of the American people through the

U.S. Agency for International Development (USAID). The contents of this document are the

sole responsibility of the author or authors and do not necessarily reflect the views of USAID

or the United States government.

CONTENTS

INTRODUCTION 4

PORT REFORM IN HAITI 4

BENCHMARKING STUDY 4

1. CURRENT FUNCTIONS OF APN AND CHP DIRECTORATE 6

APN 6

CHP DIRECTORATE 7

2. PORT SECTOR INSTITUTIONAL REFORM 10

PROPOSED PUBLIC INSTITUTIONS FOR THE PORT SECTOR 10

STRATEGIC PLANNING AND LANDLORD FUNCTIONS 13

GENDER ISSUES IN PORT REFORM 14

3. PUBLIC FUNCTIONS IN A LANDLORD MODEL 15

4. PPP CONCESSION CONTRACT ASSESSMENT 18

GENERAL TERMS IN CONCESSION CONTRACTS 18

ASSESSMENT OF REQUEST FOR QUALIFICATIONS FOR CHP 19

5. BEST PRACTICES 21

LABOR 23

MARITIME AND PORT AUTHORITIES 24

6. MANAGEMENT STRUCTURES 25

SERVICE AND TOOL PORTS 25

LANDLORD PORTS 26

FULLY PRIVATIZED PORTS 26

LANDLORD 26

NATIONAL PORT AUTHORITIES 27

C A P - H A Ï T I E N P O R T R E G U L A T O R Y S T R E N G T H E N I N G P R O J E C T B E N C H M A R K I N G R E P O R T

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REGIONAL PORT AUTHORITIES 31

SUCCESSES AND FAILURES IN PORT REFORM AROUND THE WORLD 35

7. CONCLUSIONS AND RECOMMENDATIONS 38

ILLUSTRATIONS

Figures

Figure 1. CHP Organization 8

Figure 2. Proposed Organizational Structure for ANP Successors 10

Figure 3. Port Sector Institutional Reform Process 12

Figure 3. Proposed Organizational Structure ANAREP 12

Figure 4. SONAGEP Organizational structure 13

Tables

Table 1. Current APN Tariff Structure 8

Table 2. Current Operator Tariff Structure at CHP 9

Table 3. Distribution of Functions 11

Table 4. CHP PPP Request for Qualification Assessment 19

Table 5. Port of Cartagena Performance Improvements since Concessioning in 1994 21

Table 6. Argentina: Selected Performance Indicators for the Port of Buenos Aires 22

Table 7. Port Projects with Private Participation in Developing Countries that reached financial

closure, 1992–2004 22

Table 8. Port Management Models 25

INTRODUCTION

PORT REFORM IN HAITI There are two international ports in Haiti: Port-au-Prince, managing 90 percent of the country’s

international seaborne trade, and Cap Haitien, which handles the other 10 percent. The

National Port Authority of Haiti (APN) manages, operates and maintains the infrastructure of

the two international ports, as well as 17 other small facilities that are basically for cabotage.1

APN is an independent government corporation under the Ministry of Economy and Finance

that manages and administers all ports in the country, providing services to ships, ships agents,

and other port users. It was established in 1973 as the Port Authority of Port-au-Prince, with

the authority to manage other ports in the country. In 1978 its name changed to National Ports

Authority, and in 1985, it was given the direction, control and operation of all ports in Haiti.

The Government of Haiti is now modernizing its port regulatory framework and conducting a

procurement process to involve private investors in the development of port infrastructure at

Cap Haitien Port. This new framework includes draft legislation creating two new entities—port

regulator and port operator—that will be the successors of APN. The main objectives of the

port modernization effort are the development of competitive services for international trade,

improved efficiency and reliability of the port sector, improved port infrastructure facilities,

private sector investment in port activities, a modernized legal and regulatory sector framework,

and improved competencies and capacities of port sector institutions.

USAID is supporting the Ministry of Economy and Finance in improving port capacity and

services in the northern development corridor of Haiti to promote economic growth outside

Port-au-Prince. Improving port facilities and efficiency in Cap-Haitien Port (CHP) is one way to

boost economic growth, which depends on imports of agricultural products for local

consumption as well as for agricultural products and apparel exports.

BENCHMARKING STUDY This report relates the findings of the benchmarking study conducted for the USAID Cap-

Haitien Port Regulatory Strengthening project. The study examines regulatory and sovereign

public functional responsibilities in Haitian ports and presents modern institutional arrangements

and best practices for managing ports used in other countries. The study also assesses how

1 Cabotage refers to shipping between ports in the same country—in this case, shipping between Haitian ports.


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gender is incorporated into management and personnel practices and proposes strategies for

mitigating the negative gender impacts of the practices.

This study covers the following topics:

Review of the current role and functions of APN, with a focus on Cap Haitian

Review of the Haiti national port reform process and the proposed new structure for the

regulatory, strategic planning and “landlord” functions for Cap Haitian port

Options for regulatory oversight and statutory sovereign public functions under a landlord

model

Assessment of the procurement contract for PPP transactions

Best practices relevant to Haiti and Cap Haitien port

Case studies of ports in other countries contrasting regional port authorities and national port

authorities

Recommendations for the public sector role and regulatory functions for Cap-Haitien port.

The aim of this report and project is to assist the National Port Authority of Haiti (APN) to

fulfill its role as a “landlord” port regulator—that is, to monitor and regulate the performance of

the new Cap Haitien port operator, which is being selected through a procurement process to

operate the port. This report provides APN with insight and best practices from other port

authorities to help APN staff perform their regulatory functions.

A workshop and discussion of this study’s findings will take place with the project Counterpart

Working Group, USAID CHP Modernization Program Steering Committee, and the IDB Port

Reform Task Force.

1. CURRENT FUNCTIONS OF

APN AND CHP DIRECTORATE

APN APN manages the 14 ports of cabotage, as well as the two international sea ports (Port-au-

Prince and Cap Haitien) in Haiti.

Functions of APN headquarters include:

Develop, maintain, operate and direct the public port facilities of the country

Provide security services in port areas under its jurisdiction

Establish, review, and strengthen (where appropriate) the terms and procedures for efficient

and effective management of all ports

Establish the rates, fees, and regulations for all ports, including the platforms managed by

private companies

Define the terms and conditions for the lease of land under its jurisdiction.

Organize cabotage throughout the national territory

Coordinate with other government agencies the measures necessary for access and port

activities

Seek, if necessary, technical cooperation and scientific and financial contributions from other

agencies.

The head of the APN is the Director General, who oversees the following divisions:

Administration department, which carries out regulation and harmonization of relations

between the institution and staff;

Finance department, which provides financial and accounting management and advises senior

management on the financial implications of plans;

Technical department, which provides technical support to management and harbor

maintenance;

Directorate of Operations, which provides port services in receiving, loading, and unloading

ships, and in storage and cargo delivery;


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Equipment Maintenance department, which maintains the handling equipment in the

international port of Port-au-Prince;

Cabotage department, which carries out the administration and operation of cabotage ports

Security department, which provides for the security of persons, goods and cargo in the main

wharf area of Port-au-Prince and provides assistance in this regard to cabotage ports;

Commercial department, which is responsible for marketing and promotion of the port; and

CHP Directorate, in charge of the International Port of Cap-Haitien, which provides maritime

services and ship and passenger reception, and oversees handling and storage operations and

security for cargo, facilities and equipment.

CHP DIRECTORATE The CHP Directorate operates as an extension of the General Directorate of APN

headquarters in Port-au-Prince. The director at CHP is appointed by the minister of Economy

and Finance.

The CHP Directorate is responsible for providing reception and guidance services to ships as

well as security. The Director of CHP oversees the daily management of public facilities

according to the standards and procedures established by the Directorate General of the APN.

He reports to the Director General of APN on all strategic issues including the development of

the budget, appointment of staff, and legal issues.

CHP generates revenue in accordance with the law and the rates established by APN.

Expenditures are made according to the budget for the financial year.2.

Of the duties of APN described above, only a fraction is outsourced to the Directorate of Cap

Haitien to manage—mainly functions that cannot be handled from headquarters: operating

services, technical services, safety and security services, administrative services, personnel

services. Other duties such as planning and developing port facilities, establishing terms and

procedures for efficient management of the port; setting port tariffs; and defining terms and

conditions for the lease of land are the responsibilities of APN headquarters.

Services include harbormaster services (captainry - moorage, pilotage, tugboat, public

infrastructure management), auto storage and parking, cabotage, registration. Technical services

refer to spatial arrangement and maintenance of port land and facilities. Engineers, electricians

and mechanics carry out these duties.

There are 76 employees, 22 salaried employees and 28 temporary workers at CHP—19 women

and 57 men. Figure 1 shows the CHP organizational chart.

2 APN Presentation during Counterpart Working Group meeting, June 3, 2016.


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Figure 1. CHP Organization

Source: APN

Containerized cargo at CHP is currently operated by a US-based private operator under a lease

agreement; thus APN is not involved in commercial terminal operations or cargo handling and

storage at CHP, but provides public services under a quasi-landlord model. In addition, there are

cargo agents, handling breakbulk and dry bulk cargo at CHP. Regulatory and monitoring

functions of the current private lease (Cap Terminal) are not performed by CHP staff, and the

current organizational set-up for staffing and training of CHP staff is not adequate for staff to be

able to perform statutory and sovereign public functions efficiently.

The tariff structure at CHP is regulated by APN and divided into two: APN revenue for usage of

the port (see Table 1) and the corresponding tariffs for the port operator (see Table 2).

Table 1. Current APN Tariff Structure

Function Category Function Base Tariff

Pilotage / towing Pilotage Import and export traffic $5.00 USD$/Ft Draft

Pilotage inbound Import and export traffic $5.00 USD$/Ft Draft

Storage outbound Traffic x overtime storage ratio $0.00 USD$

Port dues / dockage Port dues Annual vessel calls $0.03 USD$/GRT

Light dues Annual vessel calls $0.18 USD$/GRT

Dockage Annual vessel calls $0.08 USD$/GRT-day

Droit de port marchandise (DPM)

DPM imports Import Traffic $155.00 USD$/TEU

DPM exports Export Traffic $0.00 USD$/TEU

Source: APN


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Table 2. Current Operator Tariff Structure at CHP

Base Tariff

Terminal Handling

Charges (container)

Import and Export

Traffic

Stevedoring:

Import full $125 USD$/box

Shipping lines:

Export full $100 USD$/box


Customers:

Export full $150 USD$/box


Import empty $200 USD$/box

Shore crane $50 USD$/box

Storage Traffic x overtime

storage ratio

$20 USD$/TEU/day

First 15 days are free of charge

Terminal Handling

Charges (other)

Import and Export

Traffic

Autos $100 per equip

Trucks $275 per equip

General Cargo $10 per ton

Reefer power supply Import and export traffic $80 USD$/box/day

Stripping and stuffing Import and export traffic $77 USD$/TEU

Port usage Import traffic only (full and empties) charged to the carrier $15 USD$/TEU

Source: APN

This tariff structure will have to be reviewed to ensure competitiveness at CHP and to institute

a cost-recovery policy. Setting caps for services to be provided by the private operator should

also be considered to enable the operator to negotiate prices according to market demand. A

tariff revision mechanism should also be included in the agreement to update tariffs periodically.

2. PORT SECTOR

INSTITUTIONAL REFORM

The Government of Haiti, in response to operational, tariff and cost, infrastructure and

equipment inefficiencies in its ports, is modernizing the country’s port sector. The main

objectives of the country’s port reform are to create jobs, improve international

competitiveness of Haitian ports, and improve port services.

PROPOSED PUBLIC INSTITUTIONS FOR THE PORT SECTOR The modernization and strengthening of port institutions requires changes in the regulatory and

legal framework for port management and operations and a new port development strategy,

both of which must be approved by the Council of Ministers. The new legal framework

establishes two new entities in place of APN. The assets, liabilities, functions and activities of

APN will be distributed to the two new entities responsible for the port sector: ANAREP, the

port regulator; and SONAGEP, the port operator (see Figure 2). With these changes,

management and training plans must also be implemented for staff who will be reassigned to one

of the new entities.

Figure 2. Proposed Organizational Structure for ANP Successors

Source: APN

Services

Operations

Legislative strategyRegulator: ANAREP *

Operator:

SONAGEP**

Operations Harbormaster SafetyPrivate

terminals

Operations

Private operators

Notes:

*ANAREP will report to the Ministry of Publics Works Transports and Communication

**SONAGEP reporting to the Ministry of Economy and Finance


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According to the current port reform proposal ANAREP will have a strategic role in the

guarantee and implementation of plans to promote fair competition, the formulation of policy

and regulation of the port sector, the defense and protection of port users, and the promotion

of port business. ANAREP will manage regulatory issues. ANAREP will deal with procurement

operation licenses under PPP, BOT or management contracts. It will issue contracts with private

operators.

All port infrastructure, buildings and equipment of APN will be transferred to SONAGEP. All

services and private operators administrative and operational issues will be under SONAGEP

responsibility. SONAGEP will be responsible for planning and marketing, construction and

maintenance of port infrastructure, authorization of port operators, procurement of port

services, control of port operators, supervision of the provision of port services, safety and

security; and will commercially operate only in the cabotage ports in Port-au-Prince and Cap

Haitien under a landlord model public services.

Authorization and accreditation services will be SONAGEP’s responsibility. It will also be

responsible for providing permission for port users and allowing private sector participation in

port services.

USAID has proposed financing the modernization of Cap Haitien container terminal. The goal is

to find a private terminal operator to sign a procurement agreement with the authorities to

invest in and operate the facility. Under the port reform initiated by APN, the port of Cap

Haitien may be operated by SONAGEP.

Table 3 summarizes the distribution of functions and competencies between ANAREP and

SONAGEP.

Table 3. Distribution of Functions

ANAREP SONAGEP

Authorizations

X*

Concessions/Procurements X

Management contracts X

Accreditations

X*

* For public ports and private terminals

Source: APN

ANAREP will keep 109 staff members of APN, and SONAGEP will receive 579—an overall

reduction of 138 employees. A human resource analysis is needed to determine the

organizational structure, identify vacancies, determine positions profile and identify candidates,

determine needed skills and training programs. Figure 3 shows the reform process for the port

sector institutional reform. Figures 4 and 5 show the proposed organizational structures of

ANAREP and SONAGEP, respectively.


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Figure 3. Port Sector Institutional Reform Process

Note: GPEC stands for Gestion Prévisionnelle des Emplois et des Compétences (Employment and training management unit)

Source: APN

Figure 4. Proposed Organizational Structure ANAREP

Source: APN

GPEC

APN divided into

ANAREP / SONAGEP

Target organization

Position descriptions

Number of positions

Required skills

Occupation

Recruitment

Career development Training

Skills available

Anticipated departures

Workforce available

ANAREP (DGR)

General Director

Business Development (DEV) Regulations (REG)

General Procure Accountin

Planning –

Economy

(PLA)

Port Business

(MPO)

Control

(CTR)

Human Informati

General Controller

Marketing (COM)

Commercial

Contracts

(CCO)

Port

Marketing

(MKT)

International

Coordination

Regulations (CRI)

Port Legislation

(LPO)

Administration - Finances

External

Cooperatio

n (COE)


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Figure 5. SONAGEP Organizational structure

Source: APN

STRATEGIC PLANNING AND LANDLORD FUNCTIONS The government of Haiti is to write operating process, set details for each items, adjust required

staffing and set strategic objectives and action plans for each entity. In regards to the

establishment of new ports or expansion and rehabilitation of the existing ones, ANAREP is the

authority in charge. It will have to develop a master plan.

Port planning and marketing, including infrastructure construction and planning, as well as

attraction of customers and investors for new and existing services, will be managed by

SONAGEP. SONAGEP will be involved in the provision of standards to be applied and its

compliance supervision. It may also be involved in providing public investments related to port

projects.

In terms of pricing, SONAGEP shall have a public tariff for port services, to be developed in

conjunction with ANAREP, due to its regulatory role in pricing. The strategic planning function

should ensure project implementations plan follow regulations and attract the participation of

private sector.

SONAGEP will be responsible for the administrative, maintenance and servicing of the port, tool

or concession, with the opportunity to engage in commercial activities related to port

operations through procurement techniques and operating authorizations.


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The analysis of the organizational structure revealed that the port of Cap-Haitien does not meet

a sovereign function, it does not have a legislative and organizational role.

GENDER ISSUES IN PORT REFORM Shipping has historically been a male dominated sector. The International Maritime Organization

(IMO) is trying to change this tradition by helping women integrate into the sector. IMO’s

Integration of Women in the Maritime Sector (IWMS) program encourages countries to open

the doors of their maritime institutes to enable women to train alongside men in order to

acquire the competence essential to succeed in the maritime industry. The testimony of the first

25 years of the IMO’s gender and capacity building program is that “empowering women fuels

thriving economies, spurs productivity and growth, and benefits every stakeholder in the global

maritime community.”3

Trade, trade policy and trade liberalization have very different impacts on women, and men due

to gender roles and relationships of unequal power that cause them to face different

opportunities and constraints. These include inequalities in access to and control of economic

and social resources (e.g. land, credit, information) and influence over decision making. Also, the

gendered division of labor means that certain jobs are typically performed by women and others

by men. This is increasingly important to understand as trade policies and agreements are

increasingly linked to poverty reduction, and can have a big impact on peoples’ daily lives. 4

In some cases, trade has been a catalyst for gender equality, especially when trade liberalization

is associated with rising employment and greater business opportunities for women. But trade

can also exacerbate gender inequality and women’s lower economic and social status.

The gender gap in trade policies can be diminished by the following steps:

Assess the different constraints that women and men face in relation to trade.

Assess the impact that particular trade-related initiatives will have on the well-being of men

and women.

Design, implement and monitor trade-related initiatives in a way that supports gender equality

and, in so doing, spurs the trade expansion and competitiveness of the country.5

3 Making Waves: Women Leaders in the Maritime World – Film - International Maritime Organization. 2015

4 Gender &1 Trade – Gender & Development IN BRIEF – BRIDGE – Issue #17 – January 2006

5 Gender Dimensions of Trade Facilitation and Logistics: A Guidance Note, Kate Higgins, World Bank. April 2012

3. PUBLIC FUNCTIONS IN A

LANDLORD MODEL

The public sector’s roles in modern port management are mainly planning, facilitating,

developing, and regulating, with port authorities responsible for public safety, security, and

promoting efficient international trade and a healthy environment. The port authority is the

governing body for many ports around the world. There are a number of port management

models that can be used.

Port authorities usually promote activities that improve competitive advantage and innovation

and create public policies to stimulate development of new business and national economic

welfare. Other government tasks are identifying and eliminating market imperfection and

anticompetitive behavior.

The United Nations Conference on Trade and Development (UNCTAD) Handbook for Port

Planners in Developing Countries (1985) lists the following statutory powers of a national port

authority:

Approve proposals for port investments in accordance with a national port development plan

Set financial policies and objectives for ports

Regulate rates and port charges to protect public interests

Set recruitment standards, wage structure and promotions, and labor union procedures

Establish principles for granting licenses to port employees or agents

Collect, collate, analyze and disseminate statistics on ports and sponsor research

Act as legal adviser to local port authorities.

Port specialists from UNCTAD and the Economic Commission for Latin America and the

Caribbean recommend that port authorities recover all port-related costs, with an adequate

return on investment, to maintain cost discipline, attract investors and secure long-term cash

flow, motivate innovation for cost-efficient management and operational orientation to promote

competitiveness, compete according to market rules, limit cross-subsidies, maintain control of

port authority assets and resources to ensure its most economic and beneficial use.

In some countries, such as Costa Rica, Chile, and Ecuador, and in Western Australia, the

ministry of transport is responsible for coastlines and port policy, including those covering:


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Planning and development of marine infrastructure, navigational channels, lighthouses and

navigational aids

Planning and development of port areas and hinterland connections

Drafting and implementation of laws, regulations and decrees

Execution of national port policy

Enforcement of international conventions

Represent the country in port and shipping forums

Regulatory and licensing functions

Plan and finance national projects

Audit the performance of port activities

Conduct ship inspections and register of shipping

Ensure safety

Vessel traffic systems and navigational aids

Maritime education and training

Enforce compliance with safety regulations

Conduct maritime incident investigation

Conduct search and rescue.

The following main functions are performed in the port systems

Landlord for private sector investors and service provider

Economic activities and operations regulator

Marine safety, security and environmental control regulator

New operations and capital investment planning

Nautical services and facilities operator

Port services and economic development marketer and promoter

Handle and storage of cargo

Ancillary services provider

Because land is rarely sold to port operators, port authorities usually play a landlord role,

managing real estate in port areas. Their role includes the economic exploitation, long-term

development, and maintenance of basic port infrastructure (fairways, berths, access roads, and

tunnels).

Port authorities usually exercise extensive regulatory functions over shipping and port

operations. They are responsible for applying conventions, laws, rules, and regulations. They are


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also responsible for the observance of conventions and laws regarding public safety and security,

environment, navigation, and health care. They issue rules and regulations for vessel behavior in

port, use of port areas, and the like.

Port authorities also deal with communities in surrounding areas, and planning functions

consider the port development plans with other authorities (land use agencies, environmental,

municipal, traffic and roads), evaluate the impact of such developments on the immediate

surroundings, as well as the appropriateness of the developments in the contexts of

international, national and regional port competition.

Industrial and commercial investment plans in ports should be integrated at the level of the port

authority, in order to assess a strategic national master plan for and orderly port development.

Central governments should create national port policy to support national economic objectives

and generate a reasonable framework for port development.

Nautical operations, referred to as the harbormaster’s function, are regularly the port

authority’s responsibility and include the legal and operational tasks related to safe and efficient

vessel management within port boundaries. The harbormasters allocate berths and coordinate

the services used for berthing and unberthing vessels (pilots, tugboats, mooring and unmooring,

and vessel traffic services). harbormasters, in view of its general safety aspects, usually deals with

management of ships and port-related incidents or crisis.

Under port reform policies, multiple functions performed by the private sector include cargo

handling (land side and vessel side), pilotage, harbor towing, ship handling, fire protection

services, linesmen services, port information services, liner and shipping agencies.

4. PPP

PROCUREMENTCONTRACT

ASSESSMENT

GENERAL TERMS IN CONCESSION/PROCUREMENT

CONTRACTS When the public sector decides to proceed with port modernization and the participation of

private investors in the port sector, it must plan carefully.

The following topics should be included in the CHP procurement agreement:

Objectives

Compensation

Risks

KPIs

Services to be provided

Commercial aspects

Process for conflict resolution

Start date and duration of the agreement

Investments and phases.

First the government must set objectives for the participation of the private sector. CHP already

has a private operator, so its objectives might be to improve the efficiency of port services and

attract foreign investment for equipment and infrastructure. Defining the objective will

determine the new PPP contract objectives. In addition, the government must define the

activities to be included in the contract or transaction; as well as the best kind of contract to

meet its objectives.

The next topic to consider is the compensation structure of the transaction. The government

should analyze the basis of the compensation and determine if it will include an initial payment, if

it will be a fixed or variable amount, or a combination of fixed and variable compensation.

As with all infrastructure projects, determining how risk will be shared is critical for both

government and public investors. So the procurement contract shall clearly define the

responsibilities in case financial goals are not met.


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The government sets minimum short, medium and long terms port performance targets for the

private operator in terms of operational and financial throughput, including local inbound,

outbound, and transshipment cargo; as well as productivity in waterfront, yard, and gates. These

targets are reviewed periodically. The private operator is to indicate its plans to reach such

performance targets. Associated with the performance targets are the penalties and incentives

plans set in the contract.

Within the operational terms and conditions, both parties agree on services to be provided by

each and payment conditions. This includes maintenance of civil structures, dredging at

navigational channel and alongside quay, future of current employees if any, minimum number of

employees, port authority supervision, insurance, liabilities coverage and risks to be covered.

Commercial aspects are also included in agreement terms. Some contracts include maximum

rates, others set fixed rates, others consider supply and demand. There are several options to

consider. Also there often set revision periods, or tie rate increases with inflation, for example.

It is common that terminal operator needs government’s approval to change tariffs.

As with any other contract, the procurement agreement in a PPP should include provisions for

potential conflicts, and how they will be resolved, including the process, venue, applicable rules

and laws. The agreement should include provisions for terminating the contract, the process for

terminating it, and guarantees.

The set to hand-over to start operations, steps to be taken by parties, transition period, role of

the port authority during the process and after the transaction. In addition to the initiation date,

the duration of the contract is included. Investments or terminal development commitments,

including infrastructure, equipment, personnel, training, technology, shall also be consider. Of

course, the contract must also define the parties to it, usually the port authority and the

concessionaire.

ASSESSMENT OF REQUEST FOR QUALIFICATIONS FOR CHP On June 30, 2016, APN issued a request for qualifications for a long-term PPP agreement in

CHP. The new container terminal operator, through a competitive bidding process, will be

required to lease, manage, operate, maintain, finance and install the port and IT equipment at

CHP. Table 4 summarizes our assessment of the terms of reference for the CHP concession.

Table 4. CHP PPP Request for Qualification Assessment

Content Category CHP PPP Procurement Conditions

Objectives Improving port capacity and services in the northern development corridor of Haiti;

promoting economic growth, improving port facilities and efficiency (rehabilitate and

modernize) in CHP.

Compensation Variable fee amount per TEU moved over the quay, plus a fixed annual fee

Risks The Government of Haiti through USAID assistance will invest in basic infrastructure

and the operator will invest in the equipment. Land and infrastructure remains under

Government of Haiti ownership; the private operator owns the port equipment

acquired under PPP agreement.


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Content Category CHP PPP Procurement Conditions

KPI The lease contract will specify the operator’s performance obligations and the

penalties for failure to meet them. The PPP operator will be required to put in place a

performance bond to cover its obligations.

Public services

provision

Police in the entire port, harbormaster functions, pilotage, tug and vessel assistance

(through subcontractors), aids to navigation, channel, anchorages, and berthing area

maintenance dredging, immigration and customs, agriculture, health control, provision

of electricity to the terminal.

Commercial aspects Tariffs to be stablished in the PPP agreement, including maximum levels and

regulatory rules; including revenues derived from operations, plus complementary and

additional business revenues

Conflict resolution Haitian law, ICC arbitration

Initial date The execution of project agreement and closing is set by mid-January 2017

Agreement period 25-year lease

Investments Port equipment, IT system, reefer points as mandatory, plus suggested equipment

The document includes standard clauses in a procurement process for this kind of infrastructure

assets. It includes first a prequalification stage; when the list of prequalified bidders is announced,

the Government of Haiti will provide in the terms of reference for proposal submittals to the

shortlisted companies, as well as a draft of the project agreement and other procurement

documents.

The Government of Haiti will be providing basic infrastructure through the rehabilitation and

construction of new port infrastructure for the amount of USD$65 million and is seeking to

identify under a lease agreement a port operator which should invest in IT systems and

equipment for modern and efficient port management and operations.

The PPP agreement period, in projects where the private investor has to build infrastructure

and equip the terminal, ranges between 20 and 30 years; usually with a renewal option for the

same period. For lease and administration agreements, for which the investment is significantly

lower, PPP agreements range from 5 to 15 years. In this case, the Government of Haiti has

decided to grant a 25-year lease agreement.

5. BEST PRACTICES

Since the 1980s, many countries have undergone institutional reforms in the port sector, shifting

port management and operations from the public sector, letting the private sector provide

capital investment, construction, management, and operation of ports around the world. But

every experience is unique. There are examples of successful implementations and others less

successful; but the general outcome has been positive.

Benefits of port reform worldwide include: governmental funds relief on transport infrastructure

and equipment capital investments, enhance productivity, reduction of transportation costs,

international trade facilitation and efficiency, implementation of standards, participation of

private sector in port operation, management and investment. Some examples to show the

operational benefits of port reform initiatives can be seen in the following tables prepared by

Paul Kent and Anatoly Hochstein in 1998 for Colombia, and Argentina.

Table 5. Port of Cartagena Performance Improvements since Concessioning in 1994

Performance Measure COLPUERTOS (1993) SPRC(2003)

Containership waiting time 10 days <2 hours

Containership turnaround time 72 hours 7 hours

Gross productivity/hour 7 moves/ship hour 52 moves/ship hour

Berth occupancy 90 percent 50 percent

Cost per move $984 $224

Bulk cargo productivity 500 tons/vessel/day 3,900-4,500 tons/vessel/day

Hours worked per day 16 24

Cargo dwell time 30+ days 2 days

Note: COLPUERTOS is the former national public port entity and SPRC is a port entity created in the reform process.

Source: Kent, Paul E., and Anatoly Hochstein. 1998. “Port Reform and Privatization in Conditions of Limited Competition:

The experience in Colombia, Costa Rica and Nicaragua.” Maritime Policy and Management 25(4): 313, and Sociedad

Portuaria Regional de Cartagena.

Table 6. Argentina: Selected Performance Indicators for the Port of Buenos Aires

Indicator Before 1993 1996

Cargo (thousands of tons) 4,000 6,000

Containers (thousands of TEUs) 300 540

Capacity (thousands of containers per year) 400 1,000

Operational area (hectares) 65 95

Productivity (tons per worker per day) 800 3,000

Average stay for full containers (days) 2.5 1.5

Cost for container imports ($ per ton) 450 120

Port tariff for exports ($ per ton) 6.7 3.0

Port tariff for imports ($ per ton) 2.1 1.5

Source: Puertos (Colombia General Port Superintendent; July 1997)

As a consequence of the success of port reform, the participation of private sector in port

sector has been increasing. According to the Economic Commission for Latin America and the

Caribbean (ECLAC), in 1995 there were only 11 container terminals in Latin America and the

Caribbean operated by private companies; in 2014, this number had increased to 64, of which

many are global terminal operators.

The World Bank, in a broader scope, presents other example of the participation of private

sector in port activities in developing countries, as summarized in Table 7. The 220 port

projects were given under different contractual arrangements, including: 106 of them were

concessions, 14 divestitures, 82 greenfield projects, and 18 management and lease contracts.

Table 7. Port Projects with Private Participation in Developing Countries that reached

financial closure, 1992–2004

Year # of projects

1992 9

1993 15

1994 19

1995 25

1996 19

1997 23

1998 26

1999 20

2000 22

2001 10

2002 7

2003 13

2004 12

Total 220

Source: PPI Database, World Bank


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Countries in Latin America and the Caribbean that have implemented port reforms are

Argentina, Bahamas, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador,

Guatemala, Honduras, Jamaica, Martinique (France), Mexico, Panama, Peru, Surinam and

Uruguay. The private sector has been the driver of port sector in many countries, in recent

times. There have been difficulties in the process, some hard experiences for several countries,

but, at the end, the final result is positive.

When embarking on port reform, it is important to understand that each country is different,

but the process generally has four elements: (1) developing port reform strategy; (2) redefining

the functions and authority of the port entities, (3) developing a solid legal and regulatory

framework, and (4) developing a transparent and competitive procurement process in the

establishment of the PPP.

First, the public sector must set clear objectives for port reform, and then plan accordingly.

Then, the public sector must decide the kind of private sector participation that is appropriate;

as well as the functions, power and authorities that the public sector will retain. An aspect of

tremendous importance when considering port reform is the legal framework, which

determines institutional arrangements. This is fundamental for attracting private sector

involvement. Private investors seek clear, transparent, stable and credible legal frameworks.

Most of the issues in any port reform process are related to labor. Change is stressful. The

government must acknowledge and address potential labor problems before committing to

participation of the private sector.

By introducing reforms, ports around the world have gained productivity, improved efficiency,

reduced cargo handling costs, integrated services with other logistics and supply chain

components, reduced bureaucracy, and encouraged the participation of private investors. It is

important for governments to define and determine its role, the management structure to be

adopted and the tasks, responsibilities and functions of private and public participants.

Some functions cannot be transferred to the private sector: those that create social benefit,

such as public safety, security, environmental, coastal protection works. Another factor to

consider is the interaction of the port and the city’s objectives. In our case, Cap Haitien and the

impact that port reform might have on the city.

LABOR The main challenges of port reform during the 1980s and 1990s were labor related. The

transition to private sector operation of ports and a changing and competitive environment

required greater productivity and use of technology. Port labor reform therefore focused on

improving work methods and procedures by training staff. It is strongly recommended to

include labor in the port reform process to make them participants. In accordance with World

Bank tool reform kit, the following are the principal concerns for port labor:

Stable and fulfilling employment

Reasonable incomes


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Decent working conditions

Social security and pension provision

Educational and vocational training

Health, safety and environment

Workplace democracy

Nondiscrimination (race, religion, social status or gender)

Freedom from corruption and coercion

Labor in most port reform processes has achieved positive outcomes. Port workers are better

trained, receive better compensation and work in better conditions.

MARITIME AND PORT AUTHORITIES Maritime authorities usually deal with navigational safety, flag state control, maritime search

rescue, incident and accident investigations, shipping activities regulation, seafarers training,

recruitment and welfare, implementation of maritime conventions, prevention of maritime

pollution, maritime security and safety, merchant shipping, vessel safety, the compliance with

national and international rules and regulations.

Port authorities’ functions are generally tied to the marine interface, including the port services

provision, port infrastructure, port investment, port tariffs, port labor, port operations and

maintenance, among other vessel and cargo services listed in this document.

In Singapore and Panama these functions are performed for the same entity. In Jamaica, Ghana,

and Kenya, separate authorities are responsible for these two activities.

It is worth mentioning that in the case of Haiti, in addition to the new ANAREP (the port

regulator) and SONAGEP (the port operator), the Service Maritime and Navigation of Haiti

(SEMANAH) is and will be the specialized agency of the Haitian administration (under the

Ministry of Public Works, Transport and Communications) responsible for the regulation and

control of Haiti´s maritime waters including security, safety of shipping and protection of the

marine environment. Among its functions are developing draft laws governing the merchant

marine, organizing maritime safety, supervising shipbuilding of vessels registered in Haiti,

monitoring operations in Haitian waters, Port State control, implementing and managing

navigational aids, among others.

6. MANAGEMENT STRUCTURES

In almost every country a governmental port authority acts as port manager, administrator and

regulator. Port authorities can be established at the national, regional, provincial or local level.

Port authorities have the following main functions:

Regulate port economic activity and operations.

Plan operations, capital investments and development

Act as landlord for the private sector

Regulate marine safety, security, and exercise environmental control

Provide nautical services and facilities

Oversee maritime and nautical operations

Promote port services and economic development

Enforce compliance with conventions, laws, rules and regulations

Several factors influence the way port administration models are structured and managed.

Among them are the socioeconomic structure and historical development of the country,

location of the port, and type of cargo handled. The various models are public service port, tool

port, landlord port, and fully privatized port. Table 8 indicates the difference between each of

the different port management models, depending on provision of port services.

Table 8. Port Management Models

Port Type Infrastructure Superstructure Stevedoring labor Other functions

Service port Public Public Public Mainly public

Tool port Public Public Private Mainly public

Landlord port Public Private Private Mainly private

Private port Private Private Private Mainly private

Source: The World Bank

SERVICE AND TOOL PORTS Service and tool ports focus on the realization of public interests and have a public character.

Only in some developing countries are ports managed according to this model. There has been

a transition from service ports to landlord port model. Under a service tool, a port authority


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offers the complete range of services for the functioning of the port; and own, maintain and

operates its assets; as well as performs cargo handling. In the case of tool ports, the port

authority owns, develops and maintains the port infrastructure and superstructure. The port

authority operates port equipment and runs cargo handling operations.

LANDLORD PORTS Landlord ports have a mixed character and aim to balance public and private interest. The port

authority is usually the regulator and the landlord, while port operations are carried out by

private operators. This is the predominant port model in most medium and large ports

worldwide. Under this model, infrastructure is leased to a private operator, usually at a fixed fee

related to the construction costs. The operator provides and maintain superstructure, equip the

terminal and labor.

FULLY PRIVATIZED PORTS In this model, all port services and operations are provided and the land owned by the private

sector. Because land is usually not sold to the private sector for port operations, this is not a

common port model. Some governments also transfer regulatory functions to the private

company. Under this model the public sector loses control and faces the risk of use of land for

non-port-related activities.

The following port activities are usually provided by the private sector.

Vessel services

Pilotage

Towage

Mooring

Dredging

Utilities

Ship repair

Environmental services

Cargo services

Stevedoring

Wharf-handling

Transfer to land transport

Storage and processing (consolidation, bagging, mix)

Cargo tracking and EDI

Security

Rental of specialized equipment

LANDLORD The landlord port model management trend requires public sector regulation function to

guarantee competitive operations, avoid cross-subsidies, price fixing, and other practices that


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could impact market competition. Under the landlord model the private terminal operator and

the government sign a procurement agreement, and the port authority acts as landlord.

The Commission of the European Communities defines a port authority as “the entity which,

whether or not in conjunction with other activities, has as its objective under national law or regulation

the administration and management of the port infrastructures, and the co-ordination and control of the

activities of the different operators present in the port”. Most experts highlight the regulatory and

landlord functions of port authorities, but they are not the only functions. One thing in common

is the recognition of the public form of port management.

Depending on a country’s legislation, port management systems can be at the national, regional,

local, or municipal level. For example, in the United states there are some 183 commercial deep

draft ports and no national port authority, and ports are managed by three levels of government

(federal, state, and local), while the Canadian system is managed by the central government.

Following we describe examples of national and regional port authorities with landlord

functions.

NATIONAL PORT AUTHORITIES National port authorities manage all ports in a country. The following examples give a good

overview of the possible kinds of arrangements made around the world.

South Africa Transnet National Ports Authority (TNPA), a division of Transnet Limited, is fully owned by the

South African government, operating as a corporate entity contributing to freight logistics

network country. TNPA, control and manage, in a landlord capacity, all eight commercial ports

in the country coastline Richards Bay, Durban, East London, Ngqura, Port Elizabeth, Mossel Bay,

Cape Town and Saldanha. TNPA provides port infrastructure and marine services, operates

within a legislative and regulatory environment.

TNPA has the following core functions:

Plan, provide, maintain and improve port infrastructure

Provide or arrange marine-related services

Ensure the provision of port services, the management of port activities and regulatory

functions

Provide navigational aids and assistance to vessels maneuvering within port limits

Exercise economic regulation of port system

Promote competition and equity access to seaports

Liberia National Port Authority of Liberia, is a state owned corporation to manage, plan and build all

public ports in Liberia (Freeport of Monrovia, Port of Buchanan, Port of Greeneville and Port of


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Harper). In regards to gender and its role in port reform, a woman is the Managing Director of

Liberia’s National Port Authority.

The port authority has the following core functions:

Manage, plan and build publics ports in the country

Maintenance and operation of public ports

Increase revenue base

Promote economic growth

Act as landlord

Control pilotage, stevedores, shipping agents, environment and pollution

Institute comprehensive system of tariff and charges

Contract and assign the provision of port services and the use of facilities

Acquire properties

Initiate new services or discontinue existing

Engage in structure and construction, dredging, reclamation, remove wrecks, etc.

Ensure efficiency, safety, security and environmental protection

Supervise compliance of national and international rules, regulations and laws

Act as financial and administrative authority.

It provides the following services: vessel handling, warehousing, and an oil jetty for petroleum

products, pilotage, towage, fire services (only at the Freeport of Monrovia).

Security is provided by Liberia Seaport Police.

Peru Autoridad Portuaria Nacional de Perú (APN), its main objective is the promotion of the

competitiveness and development of the national port system, promote multimodal

transportation, port modernization and develop logistics chains in the port premises. It is a

decentralized governmental entity, responsible for port system, under the Ministry of Transport

and Communications. It is also responsible for private investment promotion in ports, and to

coordinate public and private participation in port activities. In terms of gender participation,

APN General Manager is Veronica Zambrano, and there is also female participation in APN

Board of Directors.

It has the following core functions

Elaborate and propose the national port development plan

Elaborate and propose public and private port investment plans

Approve and supervise infrastructure and equipment technical specifications to ensure

environmental compliance


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Promote the private sector participation in port services and infrastructure, and procure

contracts, in accordance with the national legislation

Promote commercial and logistics activities within ports premises

Regulate logistics zones in ports premises

Coordinate the integration of private sector terminals and port infrastructure, and promote

its development

Boost port activity and modernization

Dictate technical and operational rules and develop port activities services promoting

transparency and fair competition

Rule port infrastructure technical, operative and administrative access, as well as vessels and

cargo flows in national ports, guaranty commercial navigation permits, towing, security, safety

and all port related services

Promote and facilitate concessions to the private sector in port development areas

Promote port employment, quality and training

Develop rules to improve national port system continuous quality and safety improvement,

promote investment and training to comply with local and international norms and standards

Coordinate with other national authorities’ appropriate action to ensure general security and

the fight against smuggling and illegal trafficking.

Establish alternative dispute settlement systems between operators and users for matters of

free disposal of the parties.

Nigeria The Nigerian Ports Authority was created to improve efficiency in the country’s ports and

adopted a landlord model in all ports. It manages 25 terminal concessions to private terminal

operators with lease agreements. Its functions and statutory responsibilities include:

Develop, own and operate ports and harbors

Provides safe and navigable channels

Offer cargo handling and storage services

Maintain port facilities and equipment

Ensure safety and security

Develop and own property

In the port reform process, the port authority assigned functions and responsibilities as follows:

Nigerian Port Authority

Ownership and administration of land and water within port limits

Planning and development of port operational infrastructure

Leasing and concession of port infrastructure and setting benchmark for tariff structure


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Responsible for nautical / harbor operations and hydrographic survey

Marine incidents and pollution

Maintenance of safety and security at the common user areas

Enacting port regulations and bye-laws as well as monitor and enforce them

Day to day monitoring of operations and enforcement of relevant selections of

respective agreements

Private sector

Cargo handling, stevedoring, warehousing and delivery

Acquisition of cargo handling and operations related equipment

Development and maintenance of ports structure

Maintenance of safety and security within the terminal

Towage, mooring, bunkering, ship chandelling and ship repairs

Federal Ministry of Transport

Policy formulation and planning at national level of basic marine infrastructure

Legislation

International relations

A woman is the Board Secretary and Legal Advisor.

Panama Autoridad Marítima de Panamá (AMP), among all functions under its accountability, is the

national body responsible for national port system. As national port authority, it has to propose

and coordinate national port system development, provides and operate port services, as well as

regulate and supervise them. The objective of the Panamanian government when creating AMP

was creating a national body responsible for all maritime competences, including ports activities.

Core functions Propose, coordinate and execute a National Maritime Strategy

Recommend policies and actions for the compliance of laws and rules in the maritime sector

Oversees the national interest in maritime and inland waters

Operation and management of maritime resources

Ensure compliance with the provisions of the United Nations Convention on the Law of the

Sea, the other treaties, international conventions and instruments ratified by Panama

Evaluate and propose adhesion of panama to treaties and international conventions on

maritime sector development

Representation of the Republic of Panama on maritime sector related issues with international

entities

Coordinate with other entities the national waters legislation compliance

Maintain and update the national navigational aids

Environmental protection compliance in national waters.


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In regards to gender, Panama Maritime Authority responds to government political changes

every 5 years. Since the national port reform, there have been one female administrators and

one deputy administrator in different governments.

REGIONAL PORT AUTHORITIES Regional port authorities manage a cluster of smaller, neighboring ports, private and public and

promote the interests of regional governments.

Costa Rica In Costa Rica, port activity is regulated by a law of 1971 which creates the inland and maritime

works port direction (DOPF) in the Ministry of Publics Works and Transport (MOPT). This

MOPT direction mains functions are planning, development, maintenance and improvement of

cabotage and international (ocean going) ports. MOPT is the link between the Costa Rican

Government Executive Body and the two regional port authorities; one responsible for the

Atlantic coast ports and the other for the Pacific coast ports. The Junta de Administración

Portuaria y de Desarrollo de la Vertiente Atlántica (JAPDEVA) is the body responsible for

management of Costa Rica Caribbean basin ports; and the Instituto de Puertos del Pacifico

(INCOP) is the administrative authority of the Pacific ports.

Both port entities (JAPDEVA and INCOP) are closely related with MOPT as the governing

body. Since 1997, MOPT National Port Council has been reactivated to serve as coordinating

body for port and maritime sector in the country. There are five international ocean ports in

Costa Rica Pacific coast (Puntarenas, Caldera, Quepos, Golfito and Punta Morales) and one port

complex in the Atlantic (Limon-Moin).

The core functions under DOPF at MOPT are:

Navigational channels and aids

International codes and conventions

Harbor master

Coast guard services fee

Cabotage services, routes and tariffs

Approval of port marine infrastructure

Plan, build, improve and maintain ports

JAPDEVA specific functions are aligned with the National Development Plan, National Transport

Plan and Sectorial Strategic Plan:

Development plan of the port infrastructure in Costa Rica Atlantic coast, in accordance with

Costa Rica Executive Body development policy

Build, maintain, improve, operate and management services and port installations

Supervision and control of vessel traffic in the Atlantic coast ports, including sailing

authorization and documents

Cargo handling at Atlantic ports


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Support fiscal, immigration and sanitation authorities in their duties

Safety and security at port premises

Coordinate port and transport activities

Act as logistic platform for Costa Rica international trade

Equipment and infrastructure investment in accordance with the Port Development Master

Plan

Provide port services to vessels calling at Limon-Moin port complex

Guarantee environmental control, safety, security and protection in accordance with

international norms, rules and regulations

Maintain infrastructure and equipment

Procure efficient services and human resources to achieve objectives

INCOP act as the port authority for the Pacific coast of Costa Rica ports among its functions:

Strengthen the country’s economy as port authority

Efficient and quality provision of port cargo and vessel services

Port planning and development of ports in the Pacific coast of the country, in accordance with

the Government Executive Body policy

Build, maintain, improve and manage, previous authorization of Ministry of Public Works and

Transport (MOPT), port infrastructure and services under its jurisdiction

Rule management and operation port services under its control

Procure and manage resources required to achieve objectives

Control and supervise vessel traffic at ports in the Pacific coast of the country

Cargo handling (loading, unloading and storage)

Transport and port activities coordination

Issue internal regulations and other necessary measures required to achieve the objectives of

the "Regulatory Law of Port Activity Pacific Coast".

Public tariff setting and collection, prior approval of the Executive Branch in accordance with

the law

Monitor proper compliance of contracts with third parties providing port services on the

Pacific coast.

Ecuador The Ministry of Transport and Public Works in Ecuador is responsible for transport

infrastructure and service management for all transport modes.

Core functions include:


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Regulate transport services and infrastructure

Propose transport policy to ensure transport sector adequate development

Compliance coordination and control of strategic institutional plans

Transport service and infrastructure management, control and evaluation

Intermodal and multimodal services tariffs rules and policy setting

Represent the country’s multimodal sector in international forums

Supervise the compliance of international rules and regulations

Guarantee national development plans, program and projects

Perform strategic management of national plans and policies to develop intermodal and

multimodal transport

Plan and execute transport infrastructure plans and programs

Transport environmental management policies and compliance

Maintenance, operation and improvement of transport infrastructure

Transport safety and security policy

Promote and regulate inland, maritime and port activities as maritime and port authority

Management, technical, operative supervision of port activities, including construction,

maintenance, improvement and development of port infrastructure

Oversees compliance of national and international maritime and ports rules and regulations

Landlord, promote and supervise private sector participation in port services and related

maritime activities

Lead and regulate inland and maritime transport activities in compliance with national and

international rules and regulations

There are four regional port authorities in Ecuador under the Ministry of Transport and Public

works: Autoridad Portuaria de Bolivar, Autoridad Portuaria de Manta, Autoridad Portuaria de

Guayaquil and Autoridad Portuaria de Esmeraldas, all of them are supposed to follow national

port development policies.

Western Australia There are five port authorities in Western Australia, all under the Department of Transport. In

Western Australia, port authorities are autonomous bodies, operating commercial enterprises.

The Ports Legislation Amendment Act of 2014 amalgamated seven of the eight port authorities

into four regional authorities. The reform objective is to strengthen port planning, enabling port

authorities to manage and plan for more than one port, and extend their strategic planning in

regional port access corridor.

Port authorities


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Aare landlords and strategic managers of the ports under their control

Ensure efficient operational management

Plan port developments

Promote competence

Facilitate and encourage trade and commerce through the use of port and related facilities

Provide cost effective services and facilities

Long term infrastructure, services and facilities planning

Ensure sustainable approach to port management and development

Ports marketing to promote trade and development

Work with other government agencies and industry to fulfil trade facilitation role

Promote private sector investment in port infrastructure and services

Provide fair and equitable access to port services and facilities

Manage their activities as part of the port supply chain, to ensure efficiency and effectiveness

Work with port supply chain stakeholders to plan and provide for existing and future trade

growth

Improve port governance

Provide port policy framework, develop State ports strategy

Manage ports and port operations safe, secure and environmentally responsible

United States of America in the United States, state, county, municipal, and regional authorities are in charge of the more

than 300 ports in the country. Ports authorities’ power, supervision, management and

operations vary widely but the common purpose of all of them is serving the public interest. U.S.

port authorities are typically empowered to:

Conduct studies and develop plans

Act as landlord

Port planning and development

Set port and service tariffs

Environment, safety and security enforcement

Exercise regulatory powers

The office of Port Infrastructure Development and Congestion Mitigation with the United States

Maritime Administration assists in port, terminal, waterway and transportation network

development. Core functions includes:

Port infrastructure projects coordination and management with different authorities


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Promote the use of waterways and ports to reduce highway congestion

Coordinate studies of ports and intermodal facilities, recommend improvements for efficient

and productive transportation system

Spain Spanish port systems consists of 46 ports owned by the state, under the responsibility of

Puertos del Estado, and managed by 28 port authorities. Puertos del Estado, under the

Ministerio de Fomento, is responsible for government port policy. Main functions include:

Implement government port policy and coordinate and control of efficiency of state-owned

port system

General coordination with the different government bodies which establish controls in port

areas

Training, promotion of research and technological development in matters related to

economics, management, logistics and port engineering and other related activity performed in

ports

Planning, coordination and control of Spanish maritime signaling system, and promoting

education, research and technological development in these areas. Coordination on maritime

signaling takes place through the Lighthouse Commission, whose structure and operation

responsibility is determined by the Ministry of Public Works.

Port authorities operate as landlords, providing land and port infrastructure, and regulate

operations and commercial aspects of ports. The main objectives of port authorities are:

Provision of general port services and the authorization and control of basic port services

Management of the service area of the port and port uses.

Planning, design, construction, maintenance and operation of works and port services and

maritime signals.

Public port management and maritime signals.

economic management of assets and resources of the port.

Promotion of industrial and commercial activities related to shipping or port traffic.

Coordination of operations of the various modes of transport in the port area.

SUCCESSES AND FAILURES IN PORT REFORM AROUND THE

WORLD The main objective of port reform, in theory, is the achievement of port efficiency, cost

reduction, reduction of government investment in port sector and attraction of private sector.

Most of the port reform experiences worldwide have fulfilled these objectives, some other not.

In this chapter we will provide a brief compilation of success and failure examples of port

reform implementation.


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Successes Panama port reform generated the establishment of four global terminal operators, managing

five state of the art terminals in the Atlantic and Pacific coasts. Efficiency, productivity,

throughput increase, development of shipping networks and skilled labor are some of the results

of the port reform.

Colombia and Mexico are examples of good execution of port reform. In the early 1990s with

an excessive number of employees, a collective agreement that limited efficiency and

productivity, high operating costs for port services and improper use and space. The

modernization of ports improved the efficiency of Colombian porta radically.

In Mexico, since the Ports Act of 1993, when port reform was implemented and the

participation of the private sector began in the port sector, and with the creation of

Administraciones Portuarias inegrales, (API), the industry began to receive large capital

investments in port development, improving infrastructure, cargo handling, job creation, the

efficiency of operations, and the use of technology and equipment.

Both Colombia and Mexico have attracted the interest of global terminal operators in the

development of national transport infrastructure.

In the Philippines, the Ports Authority’s Gender and Development has succeeded in bringing

improvements to the lives of both the agency’s employees and the port community, delivering

livelihood programs and other support systems. This program also conducts projects on a

regional scale. These programs not only benefit women but also enable them to participate in

decision-making processes. Seminars and other training have been given to women and men in

the port, on occupational health and safety, stress management, first aid, diet, and physical

fitness, as well as reading, writing and math, and entrepreneurial and livelihood skills. The

Philippine Ports Authority Gender and Development team also provides gender sensitivity

training to raise awareness about gender issues in the port and on topics such as responsible

parenthood, human trafficking, and sexual harassment.6

Failures In Greece, the first major concession to a private operator (the COSCO subsidiary SEP), failed

to improve port operations mainly because of a lack of labor reforms.

In Ecuador, the concession granted to Hutchinson in Manta port did not meet expectations and

the terminal operator because of poor communication between the government and the

terminal operator.

In Liberia port reform has not finished due to a failure in organizational development port

regulation process and manuals, including human resource manuals to help transition. Port

operations, outdated port regulations, lack of investment in navigational channels, lack of vessel

6 Philippine Ports Authority: Gender and Development. CY 2009. Website


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control and tracking system, limited berth windows, and, lack of skills personnel are some of the

challenges Liberia face.

Recently in Puerto Quetzal, Guatemala, a port modernization effort scandal failed to achieve

goals because of corruption. This is an example of malpractice in port reform. The government

of Guatemala is still evaluating the situation, where the company that was awarded the

concession was bought by one of the five global container terminal operators.

Partial Success In Nigeria, port reform achieved gains in cargo handling, throughput, number of vessels, berth

occupancy and ship turn-around time, but failed to improve the status of high port charges,

delay in cargo clearance, multiple taxation and lack of development of intermodal transport.

In Benin, the Millennium Challenge Corporate (MCC) invested in a new container berth which

led to a concession granted to Bollore and investments in port infrastructure. Port operational

efficiency has increased, but overall efficiency is still hampered by piloting delays and poor

road/rail links in the logistics chain. Labor reforms have been yet to be made, with employment

increasing at the port authority, despite the concession of some container operations to a

private operator. Further reforms are needed to move the port authority to become a landlord

port authority.

7. CONCLUSIONS AND

RECOMMENDATIONS

Port reform administration models vary widely and the adoption of a specific model depends on

context. There are no two identical processes or PPP agreements, because there are no

identical port conditions, or legal, regulatory and political factors. The most popular port model,

however, is the landlord model—a mix of public and private participation in which the port

authority retains the regulator and promotor roles and the private sector invests in, maintains

and operates the port.

Port reform will have important effects on CHP and the concession process for the

international container terminal. Landlord statutory functions at CHP should include port

investment, planning and marketing, tariff policy, promotion of participation by the private

sector, maintenance of port access, port security and safety, service provision, and

environmental policy. It is important that the public sector retain governance of the port as a

public utility.

Port reform requires that the public sector retain institutional control of the port sector. The

government should establish mechanisms to guarantee action in the public interest. The port

authority should retain control of port activities as landlord. A decision must be made on

whether to establish a national or a regional port authority. If a regional port authority is

stablished at CHP, its functions and objectives have to be aligned with the national port

development strategy.

The CHP PPP agreement must define its objectives, risks, and metrics, as well as the services to

be provided, commercial aspects and responsibilities, compensation, mechanisms for resolution

of conflicts, and start date and length of the contract, and the investment commitments and

phases.

Labor is one of the most important issues to consider in port sector reform, including the

promotion of women’s participation in port activities at all levels.

Trade liberalization can have direct and indirect impacts, negative and positive, including on

gender relations. For example, it often includes agricultural policies that promote cash crops for

export over the production of food staples. Because cash crops tend to be farmed by men, men

benefit from such policy shifts more than women.


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Women who previously had no paid employment may now have greater opportunities for

employment in new business. Women may benefit from lower prices for imported goods; while

being negatively affected if they are small-scale producers. And with less money coming in from

tariffs, there may be less money available for government spending on social services, which

tends to affect women more negatively than men.7

The following steps should be taken to avoid creating negative gender effects in the Haiti port

reform process:

Integrate a gender perspective into the analysis of port tariffs to determine any gender-based

discrimination and propose modifications in tariffs to benefit women and men equally.

Promote hiring and personnel policies that encourage female hires so that APN works

towards compliance with the Constitutional requirement that 30 percent of the staff are

female.

Develop strategies (1) to mitigate any negative impact of regulatory strengthening and (2) to

promote positive impacts on a gender-differentiated basis of improved management and

personnel policies in the CHP.

Conduct a survey of training needs in the APN in Cap Haitien using the Philippine Port

Authority (PPA) and the IMO as models.

7 Gender & Trade – Gender & Development IN BRIEF – BRIDGE – Issue #17 – January 2006

Documents

CAP-HAÏTIEN PORT REGULATORY STRENGTHENING PROJECT