1. Module 4
Legal Tools
for Port Reform

2. Legal Tools for Port Reform
Introduction and Overview
Port Authority and Terminal Operations
Full Concession Agreements
Port Regulation
Module 4

3. Objectives of a Ports Law
Create an institutional framework and a business framework to develop and manage seaports, through the establishment of port-related management and regulatory bodies
Set operational conditions for private operators
Regulate organizational and financial relationships between public institutions and the maritime administration
Module 4

4. conflict of interests rules
Drafting a Ports Law
Establishment of Port Authorities : public or corporate entities ?
Creation of a solid basis to delineate port functions and responsibilities, through a core set of provisions :
preface : objectives of the reform ? transfers of rights ? organizational, financial and fiscal relations between related public institutions ?
definitions of critical functions, features of port administration bodies : from service ports to landlord ports
objectives and functions of the port authority
land management
conflict of interests rules
Module 4

5. - Transfer of government-owned assets
Corporatised Ports – Special considerations
Share issuance : How will the government exercise influence on the Ports Authority ? How will the shares be distributed ?
- Public Majority
- Golden share
Capitalization : How will it be effected ?
- Transfer of government-owned assets
- Land transfer
- Equity injection
Module 4

6. Legal Tools for Port Reform
Introduction and Overview
Port Authority and Terminal Operations
Full Concession Agreements
Port Regulation
Module 4

7. Important issues (1/3)
Separation between public oversight and commercial operations : a Port Authority should not be directly involved in terminal operations.
It may exercise licensing and regulatory functions with respect to marine and port services and facilities through… Public license ? Concession ? Leasehold contract ?
Marine Management :
- National maritime administration
- Port Authority (when NOT corporatised)
Module 4

8. Important issues (2/3) Regulation of other functions :
- Navigation aids
- Infrastructure and assets maintenance
- Police powers, etc
How will the Port Authority’s financial powers be regulated ?
Guarantee of financial autonomy : balanced budget, free tariff determination
Module 4

9. Important issues (3/3)
To what extent will the Port Authority’s liability for the effects of default, negligence or any other wrongful act be limited ?
Role of National Port Commission :
- Strategic planning
- Sector regulatory framework
Module 4

10. Implementation problems
Effects of port reform on the existing work force
Valuation of assets and the Capitalization of a new Port Authority
Need to replace/retrain top management
Creation of a clear definition of the port area
Module 4

11. Legal Tools for Port Reform
Introduction and Overview
Port Authority and Terminal Operations
Full Concession Agreements
Port Regulation
Module 4

12. Definition of a Concession
“Series of contracts that define the relationship between the Government and the private sector regarding the right to exploit port land and facilities as well as the obligation to construct port infrastructure and superstructure.”
Module 4

13. Full concession and BOT schemes
Why choose a full concession scheme, rather than a leasehold or a land rent scheme ?
Which arrangement to select ? BOT ? BOOT ? BTO ? WBOT ?
Module 4

14. Full concession, lease and rent contracts (1/3)
Module 4

15. Full concession, lease and rent contracts (2/3)
Module 4

16. Full concession, lease and rent contracts (2/3)
Module 4

17. Contents of a typical Concession Agreement (1/6)
Definitions
Appointment of the Operator
Term of the Agreement
General Rights and Obligations of the Operator
General Rights and Obligations of the Port Authority
Transfer of Rights, Obligations and Assets
Performance Parameters
Transfer of Employees
Module 4

18. Contents of a typical Concession Agreement (2/6)
Force Majeure
Liability for Loss and Damage of Goods
Lease of Facilities
Activities Permitted by the Authority
Liability for Damage
Regulations by the Authority
Access to the Site
Miscellaneous Conditions
Module 4

19. Contents of a typical Concession Agreement (3/6)
Construction and maintenance
BOT Arrangements
Investments under a BOOT Arrangement
Functional and Technical Design
Design and Construction Flaws
Building Conditions
Construction under a BOT Arrangement
Zero Date
Module 4

20. Contents of a typical Concession Agreement (4/6)
Drop Dead Date
Extension Events
Completions Tests and Take-over
Handback and Transfer of Facilities
Lender’s Security
Change in Law
Freedom to Set Tariffs
Concession Fee
Module 4

21. Contents of a typical Concession Agreement (5/6)
Security and Safety
Access
Unclaimed Cargoes and Containers
Taxes
Information and Communication
Insurance and Indemnity
Termination and Prolongation
Module 4

22. Contents of a typical Concession Agreement (6/6)
Option to Continue
Termination due to non-compliance
Bankruptcy
Expiry of Concession
Arbitration
Costs
Governing Law
Module 4

23. Legal Tools for Port Reform
Introduction and Overview
Port Authority and Terminal Operations
Full Concession Agreements
Port Regulation
Module 4

24. General elements of Port Regulation
Vessel Traffic Management
Pilotage
Order and Safety in the Port
Reporting and communication
Transport and handling of dangerous cargoes
Miscellaneous other subjects : inquiries in case of damage, cleanliness of basins, passenger traffic facilities, waste reception facilities…
Module 4