Landlord Model and Anaklia Port

To what extent can the proven “Landlord” model of construction, reformation and further development of the so-called “sea gateway” type ports of Western Europe be generalized and applied to the Anaklia port?

The high cargo turnover rates of Western European ports (Rotterdam – 400 million tons, Antwerp – Bruges – 250 million tons, Hamburg – 100 million tons) are primarily due to the turnover of the European economy and the countries related to it.

To all this, various supply chains associated with European ports and widely spread and developed cargo flow distribution areas in the form of land or river arteries – the hinterland.

In addition to economic trends, such results of cargo turnover in European ports have become possible due to the introduction of the Landlord model for the reform and development of the so-called “sea gateway” type ports.

Most successful ports in Europe operate under the so-called land concession model, when the owner of the land within the port’s water area is the port authority.

Private port operators are engaged in stevedoring activities on the basis of a concession agreement.

The port administration sets the concession tariff based on the area of ​​land occupied by the concessionaire.

For example, in the port of Antwerp, in order to stimulate cargo volumes, the concession value of a land plot located near the quay wall is lower than that located at the back of the quay.

Or the concession value of a yard with concrete slabs or an asphalt surface intended for placing cargo is higher than that of a yard with a ground surface.

The concession value is paid in advance once a quarter. By agreement between the parties, the concession right may be transferred to a third party.

In European ports, stevedoring activities are mostly carried out by private companies; land infrastructure (superstructures) located in ports – warehouses, cranes, terminals, may also be transferred to the concession.

In European ports, local municipalities own shares in the port authority and are members of the port's supervisory board, which allows them to influence the port's development strategy.

In the port of Rotterdam, 70% of the shares in the port authority are owned by the city municipality, and the remaining 30% by the Dutch government.

The entire share package of the Antwerp port authority is owned by the municipality.

The Belgian port of Zeebrugge is 98% owned by the Brussels municipality, and 2% by private individuals who founded the port 100 years ago.

Under the Landlord Model – the participation of local authorities in port management contributes to the consideration of regional interests, as well as the effective use of the port territory within the boundaries of the municipality for development.

The essence of the Landlord Model is as follows:

The port administration, as the owner, has the right to dispose of and ensure control over the port territory and is also responsible for the comprehensive development of the port.

Private operators within the port carry out stevedoring activities on the basis of a concession agreement with the port administration or a lease of land assets.

Investing in the modernization and development of port infrastructure, based on the “public-private partnership” model, the port administration transfers the land plot and the port infrastructure attached to it to the investor, and the investor ensures the operation or development of the terminals during the concession period.

Landlord model – in addition to the effective use of the port territory, it also ensures the harmonization of municipal, private sector and state interests.

This model has been effectively used in the ports of Rotterdam, Antwerp, Singapore, Riga, Konstanz and Gdansk.

To what extent can the proven approaches to the reform and further development of Western European “sea gateway” type ports be generalized and used in the development of the Anaklia port model?

Adapting the experience of European ports to the conditions of the Anaklia port requires taking into account a number of prerequisites.

At the initial stage, it will be necessary to give the newly formed Anaklia port administration the opportunity to exercise corporate governance on the basis of the establishment of a joint-stock company.

When forming the Anaklia port administration, the possibility of transferring part of the shares to the local municipality or regional administration in exchange for the port's adjacent territories should be considered.

At the legislative level, it is necessary to give the port administration the right to dispose of the land area within the port boundaries.

In addition, the port administration should be given the right to attract world-leading companies during the implementation of the project, dredging works. Also, to develop road and railway infrastructure.

In conclusion, by granting the Anaklia Port Administration the function of a full-fledged landlord (land owner), and in the future, the right to dispose of the port fee, as well as by involving local authorities in the management of the port, all prerequisites will be created to attract investors.

With such an approach, it will be possible to implement the Anaklia Port and the Anaklia City project located behind it without a consolidated so-called through a Chinese investor, but also by bringing in various powerful, world-experienced operators on a concession basis.

Info: transcor.ge