Port Privatisation: Objectives, Extent, Process, and the UK Experience

Abstract

The role of the private sector has expanded significantly in many important economic sectors over recent decades. Ports have not been immune from this advance, and many ports around the world have benefited from private sector intervention. This paper considers objectives commonly associated with the privatisation of seaport functions. A framework is presented (Port Privatisation Matrix) that can be used to help establish the extent of private sector intervention in any given port. This is followed by a discussion of the main methods used to bring about private sector intervention in ports, with examples as appropriate. Finally, the paper considers the rather unique form of port privatisation (i.e. transfer of property rights etc.) adopted in the United Kingdom. The evidence suggests that the state does not need to transfer seaport property rights in order to benefit from private sector expertise. Indeed, due to the specific nature of port investment, and bearing in mind the key objective of ports to facilitate trade, this may be counter-productive.