Thursday 8 January 09 - 17:28
 

Insight & Opinion

Learning Curve

It is interesting to note that an officer of Kenya Ports Authority has suggested that congestion problems in Dar es Salaam are worse than those prevalent in Mombasa, and that as a result privatisation may not be the right road for the Port of Mombasa to go down. He suggests vessels can wait up to 10 days to get into the Port of Dar es Salaam which was the first port to achieve a fully-fledged container terminal privatisation on the African continent. Well this is the age of “spin” and maybe the real translation of this situation is that if Dar es Salaam has problems now it is quite likely to be as a result of its own success. 

The container terminal in particular is known to be working close to capacity and as result the port needs to take the next step to consolidate and expand its container activities as well as proceed with the planned privatisation of general cargo facilities which can also play a part in relieving the pressure on the container front.

Mombasa, of course, has a plan laid out for its next major phase expansion – the development of a second container terminal with Japanese funding.History tells us though that such Japanese funded projects can eventually have quite high cost characteristics not least through the requirement to “buy Japanese”.

Whether this approach eventually delivers to the cargo exporter and importer the cost and service efficiency levels they require remains to be seen – perhaps a more traditional approach to terminal development backed by privatisation would have been more appropriate. It is no accident that 80% of the world’s container handling capacity is now in private hands.

And the principles of privatisation have again recently been vindicated in Mombasa’s own back yard, in Toamasina, Madagascar, where in just over a year International Container Terminal Services Inc (ICTSI) has created a highly efficient container terminal operation from what were previously very crude container handling arrangements.

Last month, ICTSI achieved an average handling rate of 35 moves per hour over the quay – a record – and not with ship-to-shore gantries but with mobile cranes including one brand new, high capacity, unit with a twin-lift facility.

The Toamasina experience clearly demonstrates how privatisation, properly implemented, can provide the catalyst to achieve new superior levels of efficiency while at the same time taking the burden of new investment away from government.

Across Africa as a whole the privatisation bandwagon has gained momentum in recent years. Many new port facility privatisations have been achieved both along the east and west coasts as well as in North Africa. It has not all been plain sailing of course, for example the container terminal privatisation award process in Luanda can be seen to have been a flawed one and generally it is possible to question the monopoly position Maersk/APM Terminals has been allowed to achieve along the west coast of Africa.

Also, now there is the erratic container terminal bidding process underway in Dakar,Senegal where in a strange new twist those parties that have submitted an Expression of Interest cannot get feedback from the government as to confirmation of receipt of their EOIs and the next steps in the process.

There was also the “interesting” requirement that in order for parties to qualify to participate in the process they had to have experience of handling more than 5m teu annually. Clearly, this has no relevance to Dakar’s situation and indeed more than one party has suggested this seems like a “fix”to attempt to disqualify some eminently qualified bidders from the process.

Privatisation in emerging markets requires particularly careful handling, but if given that the process governing the movement of port business units from the public sector to the private is properly conducted experience shows it can deliver some big benefits.

Carly Fields

Motorship