THE CONTINUING ROLE OF THE PUBLIC SECTOR

IX. THE CONTINUING ROLE OF THE PUBLIC SECTOR

The role of the public port will decline as the role of the private sector increases, but there are certain functions that cannot be easily transferred to the private sector. The most important are the obligation to act as an advocate of the public interest. While many public ports have failed to do this, the obligation remains. The responsibilities associated with this obligation are shown in Table 10.

The first government responsibility is ownership of public land for common-user ports. This is primarily the foreshore and immediate backup areas. Although the land used for port activities has relatively low monetary value, it has considerable value to the economy. It is important to retain the ownership of this land in the public sector.

Table 10: The Continuing Role of Public Ports

• Own and preserve foreshore and areas for port expansion • Enforce government regulations affecting port activities

• Provide basic infrastructure

- Pon-wide strategic planning - New port development - Planning and engineering design - Access to long-term public finance - Provide guarantees

• Provide basic public services at reasonable prices • Advocate trade and transport facilitation • Promote competition in the provision of port services • Interface with political stakeholders • Prepare and tender leases and concessions • Coordinate with Government on the provision of access

and public services

The second government responsibility is to ensure health, public safety, and environmental protection as well as to guard the borders and enforce its legal codes, both criminal and civil. A number of government agencies are involved in enforcing these regulations, but many countries rely on their national port authorities or agencies to coordinate the enforcement of these regulations. Some countries have also revived the concept of the Port Captain to better regulate marine

activities. 49 The unique characteristics of the port and shipping environment suggest that a separate agency is needed to ensure that the concerns of the port and shipping industry are considered when developing new regulations. 50

The third responsibility of government is to finance the development and maintenance of basic port infrastructure. The infrastructure includes navigational channels, breakwaters, wharves, and road and rail access to the port. These assets require a long period for cost recovery and it is often difficult to charge effectively for the use of this infrastructure. Furthermore, there are significant secondary benefits provided to the economy. There are a variety of government agencies that can develop this infrastructure, most notably public works departments.

49 The traditional role of Port Captain provides considerable power over port activities including the allocation of the berths and the oversight of private services within the port. In the modern time, this would create problems of conflicting authority and have a 50 negative impact on efficiency. An informative example of the potential conflict between governmental regulations and the needs of the port sector occurred in the US during the 1980s and 1990s. The regulations of the Environmental Protection Agency regarding dredging and disposal of

dredging materials became so cumbersome, that ports were unable to dredge their approach channels alongside their berths. As the shipping industry moved towards deeper draft vessels, the US ports became shallower. This has limited the ability of the US to benefit from the increase in size of vessels.

The fourth responsibility of government is to guarantee access to basic port services, to ensure continuity in the provision of these services, whether they are provided by the public or private sector, and to prevent discriminatory practices. This requires government (increasingly local government) to continue to invest in facilities for tertiary public ports and for marginal maritime

activities, e.g., fishing ports, at major ports. 51 It may also require the government to regulate pricing and commercial activity in ports that lack sufficient competition.

The fifth responsibility is to develop policies that will facilitate trade, intermodal movements of cargo, and the interchange of trade and cargo data. These policies should stimulate competition in the transport of import and export cargo and improve the efficiency of logistics. Most of the constraints on trade are a result of either government policies and regulations or lack of coordination between the public and private sector. It is important to have a public organization that represents the port’s stakeholders and advocates changes in these policies and regulations. Among the policy issues recently addressed are the development of EDI systems and the introduction of simplified, standard documentation for cargo shipments.

The final responsibility is to maintain a general port planning capability. This is needed to encourage efficient capital investment. The planning would include expansion of existing ports as well as the development of new ports. This is most important for countries where the port network is not yet mature. Public sector involvement in planning is also important for urban ports because of their impact on the social and economic activity of the community. In particular, the public sector should retain responsibility for land use planning. Because there are numerous stakeholders concerned with port activity and these have conflicting objectives, it is important to use the political process to sort out their conflicting claims.

Considering the wide range of responsibilities that should remain in the public sector, it is necessary to determine whether these can best be undertaken by a national authority or a number of local authorities. The US has relied on state and municipal port authorities to undertake these responsibilities. Europe has relied primarily on municipal governments. In Asia, there has been a preference for national port agencies, but individual port authorities are becoming more important with national authorities limited to system planning and advocating changes in government policy.