A robust architecture that continues to deliver

In recent years variations have appeared such as whole port privatisation and the Quasi-Landlord Port, as employed in China, which often involves a two-layer profit distribution method. Yet none of these alternatives has had the take-up of the basic forms of landlord port model which include: the Equip-Operate-Transfer; Build-Operate-Transfer and Build-Own-Operate-Transfer models.

The Landlord Port Model stands strong. This is confirmed in our coverage of outlying terminassal development and operation in the Philippines (Delivering value) and of the forthcoming TECON 10 container terminal concession in Santos, Brazil (All eyes on Tecon 10, Santos). Note also the recent statement by Sarabanada Sonowal, Union Ports and Shipping Minister, that all of India’s major ports will shift completely to the landlord port model by 20247.

Our port and terminal news also highlights plenty of concession activity including re-sales and concession extensions. The resale market is lively and interestingly could, in the near future, throw up some big number deals. One such deal that has already closed is the USD8.3 billion takeover of Qube Holdings by a consortium led by Macquarie Asset Management. Qube owns 50% of Patrick Terminals which has container terminals in Sydney, Melbourne, Brisbane and Fremantle as well as diverse other multi-purpose facilities, and 100% of Australian Amalgamated Terminals with automotive and breakbulk facilities in Brisbane, Port Kembla and Melbourne.

Similarly, the sale of a majority holding in Associated British Ports, covering 23 port facilities is reportedly being examined which could deliver a sale price of up to US$13 billion.

The sale of the Hutchison ports portfolio, covering 43 ports globally, is another big price project with the figure of US$23 billion referenced. The sale to MSC in partnership with Blackrock has, however, run into a quagmire of geo-political factors, not the least of which is tensions between the USA and China. Our coverage of the port dispute between Hutchison and the Republic of Panama amplifies this point – see Panama dispute intensifies.

Another notable projected sale figure, this time for Maher Terminals the largest container terminal in the Port of New York and New Jersey, is US$3 billion with industry players as well as financial institutions said to be potential buyers.

The architecture of the Landlord Port Model continues to deliver robust streams of investment. Not to say, however, that it is entirely immune from upgrade. There is an evolution of the model underway which is seeing the advancement of the public private partnership to accommodate smart technology and the transition to clean energy.