The current business climate is a difficult one as has been evidenced in the terminal operating sector recently by Hutchison’s decision to walk away from the award of the Thessaloniki container terminal concession.<\/p>\n
The bush telegraph beats that the official reason given to the port authority for this decision was the high price of the finance to take-up and develop the concession. Undoubtedly this is a factor but so too may have been the high price bid by Hutchison for the concession – \u00a23.1bn ($4.1bn) over the 30-year concession compared with a second placed bid by Cosco Pacific of \u00a2881m ($1.2m) – and concerns over the recent unrest in Greece and political consequences of this.<\/p>\n
Hutchison has also been in the news in Ecuador where it has allegedly failed to move on promised investments in Manta Port and a special investigation commission has been convened to look into this and generally assess whether the agreement made with Hutchison is advantageous for Ecuador or not.<\/p>\n
If you were a betting man (or woman) while Hutchison publicly proclaims it has done no wrong, the more astute course of action may be to assume that it will not be long before Hutchison exits Ecuador, the central issue being the cost of its withdrawal.<\/p>\n
The Market for Manta is heavily dependent on transhipment and this market has yet, putting it mildly, to mature. Similarly, the Manta project was also predicated on the further integration of Ecuador and Brazil through road and rail links to the Amazon capital of Manaus and these plans remain some way off from realisation.<\/p>\n
DP World has come out publicly and said that the current business climate is one that requires a cost-cutting approach and one that necessitates a review of all expansion plans. The expansion review is now in progress and the results are expected soon but there is a serious expectation that the London Gateway project and Rotterdam Maasvlakte II projects will have the brake applied to them until a market recovery is in prospect.<\/p>\n
The bottom line reality is that in a reduced earnings environment and with a less liquid banking system sensible steps have to be taken by all terminal operators to preserve margins. The follow-on from this is that a much more selective and detailed approach will be adhered to in making new port investments. The first priority is to meet scheduled investments and the second one is to take a much more rigorous approach to committing to new projects especially those with large capital requirements.<\/p>\n
Indeed, there is already evidence of this not just in the actions of terminal operators but also on the part of port authorities wishing to attract investors. In certain cases, there has been a significant lowering of the cost of entry to projects as the port authorities concerned struggle to secure investor interest.<\/p>\n
There is, though, also an upside in this difficult environment for select terminal operators. There are those who expect diverse port assets to become available for sale as a result of the current economic downturn. Further, they expect such assets to have to be sold at reasonable or even bargain basement prices as the vendors concerned aim to preserve their respective businesses.<\/p>\n
In particular, it is foreseen that port assets may be disposed of where they are not part of the owner’s core business, as is now the case with the disposal of the Dragados port portfolio which is being sold as part of its entire logistics business. Equally, the sale of terminal assets by shipping lines has been a trend in past recessions and this may reasonably be assumed to come into play again in the current climate.<\/p>\n
While, then, there is a significant amount of pain in the current business climate for international terminal operators, there are some who are positioning themselves to make strategic gains through astute investments in these difficult times.<\/p>\n
There are also infrastructure funds that have cash and are viewing the international port market with interest, and they too stand ready to invest given the ‘right’ circumstances. Indeed, their very presence may act as a catalyst to what promises to be a growing resale market.<\/p>\n","protected":false},"excerpt":{"rendered":"
There is undoubtedly a certain amount of battening down thehatches going on in the international terminal operating sector but behind thispublic action, in certain cases at least, an eye for a bargain is beingmaintained.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[54],"tags":[],"sponsor":[],"class_list":["post-1378","post","type-post","status-publish","format-standard","hentry","category-viewpoint"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=1378"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1378\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=1378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=1378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=1378"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=1378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}