New finance sources revealed for ports
Ports looking to finance critical development need to think out of the box to secure emerging non-traditional investors, according to a consultant.
Commenting exclusively to Port Strategy, WSP’s technical director for maritime, Johan-Paul Verschuure, notes that investors in ports are coming from ever-more-unlikely places, with dredging companies, contractors and foreign port authorities taking on equity stakes in projects.
In his view, the advent of international dredging companies as financial stakeholders in port projects has been particularly exciting. The model here sees dredging companies take part in the port development putting their dredging work in as equity. Approach channel fees are subsequently levied during the operational phase to pay back the dredging costs. In this, the dredging companies are exposed to the market risk of the public port.
“One could wonder when landside contractors, or even equipment suppliers, will follow the example of the dredging contractors,” he said.
Mr Verschuure sees the current diversification of the investor model as positive: “Overall, the risks involved in each development will be better managed, thus increasing the likelihood of successful developments. It is all about finding the right partner with the right skillset. Correct identification of risk and matching with entities with the correct appetite for these risks will get more projects developed more efficiently.”
In a further evolution of the investor model, Mr Verschuure referred to reports that the Port of Hamburg is said to be considering a “Build-Your-Own-Berth” business model, where the quay infrastructure would not be provided by the port but by the new future tenant. They would, in return, receive a long-term concession of 60 years or over – possibly up to 99 years - or even de facto ownership.
“This new business model would potentially result in a faster development of terminals and attracting new tenants to its port,” he said.
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