ps the strategist
Picture this – the whole of the traditional terminal investor world, in the shape of international terminal operators, is in the grip of the worlds worst recession and it has become evident that they have scaled back investment plans, and that new projects are now further from their mind than they have been ever before.
This is the bottom line reality that ports now have to confront when seeking to attract such investors – it wasn’t easy before with basically too little money chasing too few projects – but now it is really difficult due to the major investors scaling back new business development activities and having to live with the harsh realities of the credit crunch.
So against this background say you are approaching a port concessioning exercise, what would you do? Would you in the first instance charge a high price to obtain the bid documents for a fairly low level concession opportunity and certainly one not associated with any strong traffic growth characteristics?
Would you make it a virtual condition of obtaining the bid documents that you have to physically travel to the country concerned to obtain them?
Within the structure of the concession offered would you leave it to the incoming investor to rationalise a huge workforce for a relatively small business unit?
Would you make it a condition of the concession that major civil works have to be undertaken on quay development even though this quay is not yet required, and may not even be required in the medium term, to handle traffic flows?
Yes, you guessed it, there is an entity out there doing more or less this – basically deploying a “strategy” that is equivalent to getting an AK 47 out and firing it at both feet in terms of attracting maximum investor interest.
It never fails to amaze how some organisations just don’t get it. It is tough out there and more than tough if you are seeking to secure investor interest let alone finance. You have to work at it and remove obstacles to getting an investor on the hook not put obstacles in his path.
As underlined at the recent Private Capital & Ports Conference, you have to assemble a package that maximises investor interest not kill at the outset.