Africa - A Port Development Strategy

About The Authors

• Kees Boodt is a consultant with broad experience in privatisation projects, commercialisation, sales and establishing joint ventures. He was involved for several years in dredging developments in the port of Rotterdam and today runs Boodt Management Deelneming BV - reach him via email: boodt@boodt.com   

• Jan Willem Koeman is a former deputy director of strategic planning & research at Rotterdam Port Authority and before that a senior project engineer in the navigation branch of Delft Hydraulics Laboratory. Today he's MD of independent port consultancy firm Pharos - reach him via email: jwk-pharosbv.nl

Introduction

With CEDA's Moroccan congress, Dredging Without Boundaries, firmly in mind, Kees Boodt and Jan Willem Koeman offer a strategy for African ports to consider...

A successful strategy has limited, clearly defined goals and, from the outset, must be thoroughly organised if it's to work. In this article, we'll discuss the three vital components of such a strategy, which are:

1. Conditions port authorities must recognise and meet

2. The strategy itself

3. How to organise and maintain the final product.

1. Conditions   It's important to realise that nothing stands still, especially in port development, and equally important to anticipate probable changes - which should be monitored. Other key conditions are: Competition   Vital for healthy development: it's pointless to subsidise national port interests as such investments are never used optimally.
Teamwork	Figure 1: Africa has tremendous potential

The strategy will only work if government authorities, companies, financiers and all other interested parties work together.       

It's essential, too, that the right people,            

with both expertise and experience,

are brought together in a flexible and energetic organisation.

• Management

Top managers, political leaders included, must facilitate collaboration between ports, cities and even countries.

• Money

Long-term credit is essential and the team must realise that only with a proven performance record are such credit facilities likely to become available.

2. Strategy

We've laid out the basis of a good development strategy in figure 2.

Figure 2: A typical port development process

Let's put some flesh on the skeleton...

Data Collection To begin with, and though it would appear to be self-evident, everyone needs to be completely clear about their role in the organisation and must have sufficient expertise to carry out that role if the initial data is to be well-founded and accurate.
	Figure 3: Noise, dust and potential danger - scrap handling has all of that
Business Analyses The major differences that port users pose in their working environments must be taken into account. Some firms' practices mean they'll generate noxious fumes, for example, and you need a clear policy that takes into account local laws and regulations to deal with that. Noise, dust and potential dangers are other obvious factors, along with such inevitable costs as maintenance dredging.
	Figure 4: Preliminary designs must be prepared for major infrastructure works - this is the Maasvlakte concept in Rotterdam

• Port Characteristics   

Hinterland connections included, are not only important in making comparisons with competitors, but also for calculating exploitation costs. The geometry of ports' entry channels

(in combination with certain weather conditions) can also have a considerable influence on these costs.

• Port SWOT Analysis

A logical consequence of studying port characteristics. You need to assess both technical issues - port layout, depths, hinterland connections, capacities etc - as well as managerial, financial, economic and institutional aspects of the port. And compare them with your competitors.

The SWOT analysis' ultimate outcome must be to highlight market opportunities in terms of cargo types (and which sectors are likely to attract potential investors) along with a phased and detailed port development strategy. On the latter point, if the way forward is a completely automated terminal, but to begin with funds allow only something much more basic (though the strategy will still aim to develop a sophisticated terminal in time), then it follows that important points of consideration will include the availability of skilled workers, training facilities to bring on new staff etc.

• Traffic Forecast

Coming up with port development scenarios is not only vital in assuring long-term profitability, but also in predicting traffic growth. If, for example, you plump for a bulk cargo terminal that quickly proves more popular than you imagined, this may mean entry channel / quayside congestion which in turn will mean more dredging with its attendant impact on costs.

• FRS

For each of your port development scenarios, you'll need to prepare a Functional Requirement Specification covering the type and volume of predicted cargo and the type and number of vessels to be accommodated. The FRS will provide the basis for the port's physical planning and spatial requirements (both land and water areas) and must also take port maintenance into account.

• Preliminary Designs

Must be prepared for major infrastructure works – e.g.: breakwater layout, dredging areas and depths, plans and cross-sections of quays, the yard area and pavement.

The designs must be sufficiently detailed that main material volumes can be determined - which will serve as a basis for...

• Construction Cost Estimates

That will take into account the various scenarios, possible phased development and the prioritisation and phasing of investments.

• Financial Analysis

The results of the market and SWOT analyses will be used to determine the commercial strategy. The major question to be answered is: 'What will the tariffs be for the different services provided by the port?'

• Implementation

A privatisation scheme with a transparent market approach is preferred. It should cover dates, actions, scorecards and the expected results, all based on the aforementioned steps.

• Partnerships

The forecasts should show if the port can attract private investment. If not, funds (for the infrastructure at the very least) will need to come from the public purse...

The ownership model has to be clearly stated, whether it's full privatisation, a master concession or landlord options. Any consequent changes in the port's (or country's) contractual and regulatory structure have to be allowed for.

By this stage too, a reference plan - a functional diagram of the port and its business units - should be drawn up, detailing the envisaged occupants / operators, markets, activities, profit & loss statements and contractual / organisational factors. Which leads us to...

• Exploitation

Which must be properly monitored so that future development is soundly based.

3.      Organisation

Our major point is that you've got to create a firmly led organisation and let it evolve. You can only do that if you've the right people with the right knowledge and experience - plus, perhaps, a dash of pioneering spirit. Our tips include:

• Co-ordination

Don't let your people's expertise and experience go to waste or operate in a vacuum: bring them into project discussions early.

• Construction & Maintenance

To get the port project off the ground and maintain its quality, your organisation needs the following disciplines:

• Marketing: continuous benchmarking, searching for customers and fulfilling their needs

• Port Development: working with customers on new designs / facilities

• Exploitation: customer relations, cargo handling management, port safety etc.

• Maintenance: contract management, road, pavement and quay maintenance.

Hydrografisch Points to cover include determining water movements, understanding the behaviour of the hydraulic system, determining seabed topography and its behaviour.     Dredging

Determining where, when, with what, how and by whom any area will be dredged, plus where the spoil is going to be stored or  disposed. The division in charge (it may come under general port maintenance) will be responsible for pre-qualification parameters, tenders and selection of private dredging companies. Our tip is that it usually pays to begin with short-term dredging contracts and look to long-term contracts later.

Figure 5: You'll always need to dredge -      this is Volvex Atalanta at work

Conclusion

It' a tough world and nobody pretends that setting up successful port operations is easy. But with determination, backed by the right strategy, expertise, experience and good management, it can be achieved - and must be if Africa's true trade potential is to be realised.