Transport Terminal Governance: Main Benefits and Problems
The governance of transport terminals concerns their ownership and their operations. Depending on the situation, there is a variety of stakes in terms of the respective public and private roles. While terminal ownership still remain dominantly public (managed through port authorities), the private sector is mainly responsible for the operations, a role mainly secured through concession agreements. Such as relationship between ownership and operation is a form a public-private partnership. However, both the public and private sectors must account for a set of benefits and problems:
  • Benefits. The public sector in concessions agreement tends to provide a leveled playing field with compliance to a variety of safety, security and environmental regulations. This implies that the private sector can generally be assured of a constant and predictable regulatory framework to plan its operations. A notable advantage of private terminal operators is their high productivity level as they respond to competitive pressures, being able to manage effectively their assets, and invest in new infrastructure.
  • Problems. Since trade flows must pass through a limited number of terminals, the public sector is prone to have a rent seeking behavior and tax freight activities to fund its budget. On the other hand, private actors are prone to generate externalities, which are costs they generate, such as congestion, that are generally assumed by the collectivity.