Strategic Review

A. Strategic Review

The goal of the strategic review is to develop an effective private-public partnership that allows both parties to work together to achieve their common objectives and that promote a competitive selection process. This process requires some degree of outside assistance to ensure both objectivity and an understanding of experiences elsewhere.

The design of effective contractual relationships requires an understanding of the future demand for port services and the resources required to provide these services. These resources include human resources as well as equipment and facilities. Technical advisors can assist public port managements in determining this information. They can assist the management in defining the ports objectives related to increasing PSP. These objectives need

61 While there are important reasons for proposing transparent competitive bidding, it is important to recognize that this process has failed in a number of situations where the winning bidder has made an offer considerably above the others in order to

secure a potential monopoly or to exclude potential competitors. Since individual bidders will have their own objectives and these may not be consistent with the objectives of the government, it is important for the government to be able to make subjective evaluations of bidders and their proposals to meet these objectives. The business plan submitted with the bid can provide an indication of these objectives.

to be placed in the context of the markets that the port serves, their potential for growth, and sensitivity to improvements in the quality of service and the pricing of these services. They can evaluate the services currently provided to the port user and develop alternative scenarios for the allocation of these services between the public and private sectors. They can evaluate the potential for improving port services and for developing competition under the different scenarios.

This market assessment is translated into a forecast of the future demand for port services. The current productivity of port assets and services and future improvements are used to determine what assets will be required to meet future demand. This includes new assets that need to be procured by the private sector and the public sector to provide an efficient service. The complementary services to be provided by the public sector are also determined. These include both general port services and landside access to the port. These estimates are then translated into a stream of revenues and expenditures from which it is possible to determine the value of the business being offered.

Technical advisors can also assist in determining how to create a competitive environment through division of the port facilities among competing service providers. It there will be a single service provider, then they can develop competitive bidding procedures together with performance requirements to ensure the quality and efficiency of the services provided. They can also assist in the tendering process beginning with an inventory of the available equipment and facilities, their specifications and their condition and a survey of private sector companies with possible interest in bidding. This would be followed by assistance in the technical aspects of the pre-qualification and bid evaluation.