Public ports have staked their current and future success on more than $12 billion in investments in port infrastructure and facilities. Port revenue bonds—rather than taxpayer dollars—primarily funded these investments. Port revenue bonds are retired through revenues, user fees and tariff charges paid principally by PMSA member companies, and are beneficial to the public and private sectors. As a model public-private partnership, these port infrastructure investments have come to symbolize how well-planned and beneficiary-financed transportation infrastructure can benefit both commerce and the public alike.
As a matter of strategic development policy, many ports encourage the co-development of various value-added services through franchising, licensing, and incentive leasing. Today, ports seek to attract enterprises that extend their logistics chains or provide them with specialized ...view middle of the document...
In total volume terms, the bulk shipping of commodities still dominates global trade and it is the role of China that singularly stands out. As its economy expanded rapidly over the last decade, this led to an unprecedented demand for vast amounts of raw materials to feed the country’s industrial growth. Even in 2009 when the rest of the world saw a rapid downturn in trade volumes, huge financial stimulus packages from Beijing kept China’s appetite for energy, iron ore and other steel inputs extremely firm. This in turn supported the commodity trades from southern Africa, Brazil and Australia. Nonetheless, investments have been relatively limited. Bulk shipping tends to be for projects where a terminal is located next to an exporter or miner. This usually attracts less private investment than say a container terminal where most private investment projects tend to be focused. Ports and terminals operation is big business and growing.
Investors in Chinese ports are increasingly looking at alternative opportunities and taking over from other investors. Challenges remain and the research highlights the legal complexity in many of the terminal ventures embarked upon. This includes stringent rules pertaining to foreign investment, not least because some ports are considered as infrastructure or logistics integral to the country’s transport policy. This therefore requires a sensitive approach to the country’s appropriate local and national laws.
Despite the legal difficulties and other challenges facing potential port investors today, the potential of healthy operational returns sustains private interest. in addition, the advantages of having asset-based projects on the books at a time of inflationary uncertainty and currency volatility also means ppi projects have maintained a high business profile. Investors with an appetite for risk are likely to be rewarded with greater returns from focusing on emerging markets.