Master-planning and city-port
relationships
Master-planning, and the
revisions thereof, is a long process. From the time the decision to develop a
new MP is taken, until the latter is in place, in Italy the process could well
take 6 years! There would be no less that five ministries involved in an MP
approval, let alone local and regional governments and other stakeholders. The
MP of the port of Brindisi dates back to 1974, when the port, its traffic, and
the type of ships calling, had nothing to do with the business realities of
today.[1]
The MP is a useful
planning instrument and in this regard it has to be flexible and able to
accommodate the changing demands on port services. Often, the opposite is true
and the MP is a statutory straight-jacket, constraining agile port management
and development. Often, this is the result of inflexible berth designations;
i.e. allocation of berths to a specific port traffic.[2]
Two examples from Brindisi could illustrate this point.
1. The port of
Brindisi is served by a single towage company, owning 5 tugs, berthed at the
inner port, which, at the time of writing, was undergoing urban rehabilitation.
As a result, the tugs needed to move to another spot at the middle or outer
port but, in spite of the ample and underutilized infrastructure there, no
other place was available, because this was not provided in a 40-year-old MP!
2. The middle, and
most commercial, part of the port of Brindisi, for years now, is dedicated to
Ro-Ro and passenger traffic. To serve this traffic, the Port Authority had decided
to construct a new passenger terminal; one of the most modern in the Adriatic
Sea. The terminal should have been ready by the summer of 2012 but works have
been suspended as a result of an administrative appeal, claiming that,
according to the 1974 MP, passengers cannot be handled at this part of the
port. Interestingly, the person who has lodged the appear is the owner of the
sole ‘private’ passenger terminal in that part of the port!
Port land (demanio marittimo) is usually well
defined by law. The land is State property, albeit managed by the port
authority. The same applies to the land
of urban areas. In cases where the port and the city interface, conflict may
arise usually as a result of political power games, on the part of the City Administration.
The latter usually sees port areas as areas of alternative use (coastal zones;
residential; fisheries; recreational; etc.). One should not forget that the port is often the favorable subject
of discussion of mayors, many of whom don’t even know what a port really is,
but who believe that by doing so they may score political points, or divert
public attention from other pressing problems of their own Administration. In
Brindisi, as in other Italian ports, the mayor is a member of the port council.
During my term there, I don’t recall a single meeting where the mayor did not
state that the reason he takes part in the Council is not just to control,
supervise and vote, but to actually manage! Certain ‘left’ parties of the City
Administration, in addition, still believe that ports should not be autonomous,
but run by city councils as was the case 50 years ago!
Regional planning, and inter-port
competition
In Italy, port
planning, together with the planning of the rest of the infrastructure, is the
prerogative of the Regions. This is stipulated by the country’s Constitution
(Article 5). Of course, Italy is not unique in this policy of decentralization
but, unfortunately, this has created considerable duplication, ‘cathedrals in
desert’, and a waste of scarce financial resources. With the need for fiscal
harmonization in the European Union, it is obvious that a reversal of trends
needs to take place, transferring decision making power from the periphery to
the center.
Regional transport
plans are often at considerable variance from national transport and logistics
planning, rather than being parts of it. Rarely, if ever, have I seen a serious
scientific transport planning exercise, similar to those we are accustomed to in
northern Europe. Instead, plans are influenced, and relevant funds allocated, according
to the relative influence (at “Rome”) of local politicians. This is one of the
reasons why infrastructure in southern Italy is so underdeveloped, compared to
the north, where political power mostly resides.
Brindisi is another
good example of neglected infrastructure, vis
a vis its adjacent neighbor, Bari, just because the latter port-city is the
Seat of the Regional government, with the large majority of regional
politicians coming from that city. This, in spite of the fact that, in terms of
traffic and available infrastructure and connections, Brindisi is far more
important and more strategically located in the Adriatic and Mediterranean
Sea.
When the European TEN-T
‘core’ and ‘comprehensive’ ports were decided, I made a great effort to also include
Brindisi as a ‘core’ port, together with the other two regional ports of
Taranto and Bari, which were included, but on the basis of only “political” and
not economic arguments. This would create a real ‘port system’ of the Apulian
ports, something that, as it became obvious, the regional administration had paid
only lip service. Unfortunately, my efforts met a brick wall, for the fate of
the port of Brindisi had been already determined by influential Bari
politicians (and nonexistent Brindisi ones). To add insult to injury, the same
politicians who for years had been favoring Bari over Brindisi (often with the
‘convenient’ assistance of local Brindisi port interests) have consistently
been arguing that the predicament of Brindisi was owed to its own bad
management. Let it be noted that, currently, Grimaldi, the world’s largest
Ro-Ro operator has already made Brindisi one of its most important
Mediterranean hubs![3]
TEN-T and national transport and
logistics planning
The Trans-European
Transport Networks (TEN-T) is one of the European Union’s most ambitious and
far- reaching projects, aiming to: a) advance economic and social cohesion; b)
harmonize and rationalize public investments in infrastructure throughout
Europe; and c) improve the competitiveness of European exports. The creation of
a trans-European transport network includes ports, as crucial network nodes,
and, through the equally important program of the Motorways of the Sea, extends
this network to third countries outside the Union. TEN-T divides ports in two
categories: ‘core’ ports, i.e. ports of European interest and ‘comprehensive’
ports, i.e. those of national or regional interest.
After many years of
deliberations, in 2014 the Italian government decided to draw a National Port
and Logistics Plan, PNPL, so as to: harmonize the country’s port system to that
proposed by TEN-T; select as ports of national interest those included as
‘core’ ports in TEN-T; strengthen the link between ports and logistics service
providers; improve the competitiveness of Italian exports; strengthen the
competitiveness of Italian ports vis a
vis those of northern Europe; and last but not least save–or so it thought-
on the financial resources going into other public port administrations, i.e.
those port authorities intended to be abolished and integrated under those of
‘core’ ports.
In spite of its stated objectives, from the beginning I
was against this idea, believing that a national
ports plan cannot exist without a national transportation plan; otherwise
it would look like we were putting the cart before the horse. Without a
transportation plan, one could not possibly argue which port authorities should
remain and which should be taken over; any such arguments would be bound to be
political rather than economic. Moreover, the aggregation of ports has been
motivated by competition among north Italian container ports, while a number of
other ports, to be integrated, were handling important bulk cargo and
passengers.
The drafting of PNPL
was commissioned to an international consultant, under the supervision of a
so-called Scientific Commission,
appointed by the Minister, the composition and competences of which I never
understood. The Report was nothing
more that what it was expected to be at the outset: A ‘consultancy report’ full
of tables and figures, as well as normative
wish-lists and unsubstantiated views, without any scientific or methodological rigor
or relevance. As a result, the proposed list and composition of ‘port clusters’
has been changing by the day, according to the ‘political influence’ of port
presidents in the ruling Democratic Party (PD), and the intensive horse trading
among themselves and the minister.
It thus became clear
to all something that, to me, was evident from the very beginning: The
objective of ‘port aggregations’ was never to create stronger and
internationally more competitive ‘port clusters’ but to centralize decision
making in order to eliminate competition among ports. Such ideas however belong
to the past and, at any rate, go against the orientations of the European
Commission and European Parliament who would like to see ports as ‘enterprises’
with operational; administrative; and financial autonomy.[4]
Infrastructure financing through
‘project financing’ (PPP)
Thus, the Italian
government has made the usual textbook mistake of most economic reforms:
Instead of improving on efficiency; cutting down bureaucracy; and encouraging
private sector participation, it opted for just reducing the mere number of
port authorities, without any economic rationale.
Public sector bureaucracy is Italy’s biggest
challenge and if the problem is not addressed timely I fear the country could
soon face the fate of Greece. A miscellany of international reports and
statistics demonstrate Italy, together with Greece, as the worst European
countries in terms of attracting Foreign Direct Investment (FDI). A few years
back, my colleague, the president of the Port of Taranto, invited the Port of
Rotterdam to have a look at the Apulian ports (Bari, Brindisi, Taranto) and
assess whether opportunities existed for cooperation and joint ventures. The
Rotterdam team, following intensive visits and interviews, produced its report,
with a very clear bottom line: “the entrepreneurial climate in southern Italy
is at great variance to north European business practices and this reality was
not conducive to taking the issue further”.
In terms of financing,
it should be noted that Italian ports do not cost anything, to say the least,
to the country’s public burses. They are instead self-financed through VAT
receipts from Italian imports passing through seaports. The system entails a
degree of unfairness and considerable lack of transparency, particularly as
regards the criteria of redistribution of these receipts amongst all ports by
the Italian government. For instance, Brindisi is a major VAT contributor,
being an importer of considerable quantities of coal, but what comes back to it
as a result is very limited. Said differently, the city and the port face all
the environmental problems connected to the handling of coal, while other,
‘luckier’ ports enjoy the benefits of Brindisi’s VAT receipts.
I have always argued
that this type of public financing is wrong and it ought to change with
emphasis on private investment and finance. This is also the orientation of the
European Commission who would like to see more port autonomy in terms of
investments, financing and the pricing of port services. To my view, public
financing should be reserved only to major infrastructure works, such as
motorways, railways, and basic port infrastructure of general interest such as
breakwaters and access channels. Everything else should be the domain of the
private sector who should also assume investment risk through concessions and
PPPs. In this way, it would be ‘demand’ that would dictate infrastructure
development and not supply, which tends to create excess capacity and
‘cathedrals in desert’.
HE Haralambides
[1] At the time of
writing, one of the objectives of the Renzi Administration was to considerably
shorten these times, as well as scrap Port Councils; and quite rightly so: The latter, in the past 20 years, have done
nothing else than hold back the growth and development of ports, by promoting
personal or special interests, often in tacit agreement with the port
management they were expected to control and supervise.
[2] In Brindisi, I had
ferociously resisted such a policy, promoted by various interest groups (ship
agents) who wanted “their own” berths, at the cost of better port utilization.
[3] At the time of
writing, Grimaldi had asked for a 20 year concession of one of our terminals,
as it had done in many other parts of the world. The majority of port operators
(ship agents and not only), many quite friendly disposed to Bari, and with
businesses there, were against this project on the basis of irrelevant
‘monopoly’ arguments, when it was crystal clear, from their publications in the
local press, that the real issue was
that the concession would ‘disturb’ the regional, Bari-centric, planning. In
other words, the concession would make Brindisi more important than it should
be….
[4] I have colleagues,
port presidents, who vehemently argue that “competition kills competitiveness”.
Others, with strong “left” political inclinations, argue that ports should not
compete at all. Instead, if, say, a global liner operator would like to call or
invest in the country, he should not talk to individual ports but to the
minister himself; the latter would himself tell them in which port they should
go!
