Go green early in concession negotiations

Port concession agreements are full of guarantees on performance and throughput volumes – but generally contain very little, if any, environmental commitments.

Port Strategy: "What is striking is that there are hardly any lease or concession agreements that incorporate green issues," Theo Notteboom, Institute of Transport and Maritime Management Antwerp

That should change, says Theo Notteboom, president of the Institute of Transport and Maritime Management Antwerp (ITMMA), who wants to see more green leases or concessions.

“Terminal operators have to give a number of guarantees to the port authority in order to be able to use the land. But what is striking is that there are hardly any lease or concession agreements that incorporate green issues,” he says.

“You will often find a very simple clause saying the terminal operator has to comply with local environmental law. But that is quite obvious – it is the law, so they have to comply with it, so it is almost useless to include it.”

Prof Notteboom says that environmental clauses could be introduced on issues such as modal shift – setting a target for rail and barge transport; the use of sustainable energy sources; or the provision of cold ironing facilities. However, where such clauses have been suggested, terminal operators have protested they could not comply because they could not force their customers to use rail instead of truck, or to make use of onshore power supplies, for example.

So he suggests that such environmental clauses should be included much earlier, in the concession bidding process. “Most port authorities organise a competitive tendering programme – and if you include such requirements in the bidding and selection stage, then it is much easier to do something about this afterwards.”

This will require a change of approach, he admits. Port authorities always question potential operators closely on their financial performance and their experience in running terminals elsewhere – but questions are not generally asked about the bidder’s environmental track record in port operations, or what they have done in terms of “green” research and development.

Such issues could be expanded to include the use of environmentally friendly yard equipment and working with the surrounding environment, protecting wildlife and so on, he adds.

“The port authority could ask the terminal operator to have an environmental reporting system in place where they measure such things as impact on water and air quality. It seems to me that over the past five years we have been talking a lot about emissions from ships, low-sulphur fuel, etc., but far less about the port and terminal side, and I think there is some real scope for improving environmental awareness in this area.”

Sanctions could be imposed on terminal operators that fail to make the “green” grade, but Prof Notteboom suggests that a “reward system” might work more successfully.

“Concession fees are generally a flat fee per square metre per year. You could introduce discounts based on the efforts in terms of environmental measures, whether it’s the provision of cold ironing or a very good modal shift.”