Don’t go it alone

An infrastructure fund or other private development entity might be able to see profit in port development but unless the right approach is followed it is not always easy to realise it. And it becomes doubly difficult because the right approach is invariably not a standard approach.

While port development does have common denominators it is ultimately always a bespoke business. Every physical site has different conditions and each location has different challenges in terms of regulatory, environmental, technical, commercial and competitive factors.

To be frank, while there is always help at hand, for a price, this is not always the right help at the right price. There are plenty of ‘white elephants’ that have been promoted by market analysts and there are many that have even been built that stand empty today.

One particular project springs to mind, when a few years back in Europe a private individual had it in mind to create a container transhipment port. It needed a huge breakwater and the project was clearly a non-starter at first glance. Fortunately he did get the right advice and the last I heard he was looking to use the site in conjunction with a gas pipeline project, a much more sensible idea albeit not one likely to provide a sufficient return on the original investment in the site.

A novice entity has to be get someone on side who knows the business, someone who comes strongly recommended and is ‘a safe pair of hands’. And someone who has a broad-based knowledge and contacts within a given sector – for example container handling. Such a person will be worth his weight in gold right through the physical building process up to and including the start-up phase of operations.

If you can’t find one person then find two or more covering both aspects – without them you will see costs rise and revenue only build at a slower rate. The first job, finding the right person/people, as is invariably the case, is the most important one.