Port eyes expansion even in slowing traffic

Port eyes expansion even in slowing traffic
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First Published: Sun, Nov 09 2008. 11 27 PM IST

Going strong : Antwerp port CEO Eddy Bruyninckx says that in the future, India will play an even more important role in globalization
Going strong : Antwerp port CEO Eddy Bruyninckx says that in the future, India will play an even more important role in globalization
Bangalore: Antwerp port, Europe’s second biggest, handled 183 million tonnes (mt) of cargo in 2007, exceeding one-third of the cargo handled at India’s 12 government-owned ports in fiscal year to March. Antwerp’s hungry for more. The port’s chief executive Eddy Bruyninckx said the port needs to expand to continue growing regardless of slowing traffic growth and the financial crisis. Bruyninckx, who is part of the entourage of Belgium’s King Albert II, who is on a state visit to India, said Antwerp port plans to expand facilities, including a new dock to handle container cargo with 1,070ha of space for maritime, industrial and logistics activities. The port is also asking for expressions of interest from Indian firms in the new Saeftinghe development zone expansion. Edited excerpts:
Are you finding it difficult to raise funds for expansion, given the turmoil in the global financial system?
Going strong : Antwerp port CEO Eddy Bruyninckx says that in the future, India will play an even more important role in globalization
The impact of the financial crisis so far has had no immediate effect on the port of Antwerp. We have been aware of the impact it had on the economy though. The most evident consequence for our port, if traffic goes down, would be receiving less port dues.
Will the credit squeeze and the economic slowdown lower cargo growth at the port this year compared with 2007? How much cargo do you think Antwerp will handle this year?
Statistics have shown that until August, the cargo volumes have kept on growing. From September, we have indeed seen a slowdown in cargo. We feel that due to the excellent first eight months of the year and the expectations that the last three months of 2008 will show a status quo, the overall outcome will still be positive for 2008.
Antwerp port handled 183mt of cargo in 2007. How does the port manage this, considering that it is located along the Scheldt river and not on the coast?
Antwerp is indeed a river port, but offers access to the largest container vessels. Thanks to the location along the river, the port of Antwerp is located much closer to the origin and destination of maritime cargo, which lowers the cost for inland transportation, such as road transport. This is one of the key success factors of Antwerp.
How important is India in your plans?
We strongly believe India is already a very important business partner for our private companies. Its current cargo flows are important to Europe and we certainly feel that in the future, India will play an even more important role in globalization.
Will your subsidiary Antwerp Port Consultancy (APC) take stakes in India’s new private ports or firms developing such ports?
This could be a possibility, but only if it involves a direct cargo flow between India and Antwerp. APC would like to be the interface between the Indian terminal operator and the Antwerp player.
What can be done to increase use of waterways in India? Half of the cargo handled at Antwerp is taken on barges to the hinterland through waterways?
Internal waterways is a very important issue in European policy, although they are not quite as good in all countries. Physical conditions such as depth are very important. As Antwerp has centuries of tradition in internal waterways, we would very much like to share our know-how on this.
How do you select private operators for cargo handling? What is the port’s revenue from this? Is it indexed to inflation?
We look at several criteria such as the performance record of the operator, expected volumes, state-of-the-art equipment and so on. So, quantitive and qualitative criteria are taken into account.
Aside from price effects, we attach far more importance to macro-merits such as employment and value-added services. Our revenues come from concession fees and port dues. The rates are being revised on a yearly basis and kept only at 70-75% of the inflation index.
How do you safeguard the port’s interest in case a private firm is not able to meet the performance criteria mentioned in the concession agreements? What has been your experience with privatization of cargo terminals?
There are penalties included in the contracts: financial penalties; reducing the length of the concession contract (when projected investments are not fulfilled); (and) in case of manifest underperformance, cancellation of the concession. In case of underperformance, a very thorough investigation will have to exclude external causes as bad economic circumstances. The port of Antwerp is a landlord port, so rather than real privatization experience, we have a kind of private partnership model. We only own land which is given to private port companies in concession.
Containers account for 52% of Antwerp port’s cargo. It has the capacity to handle 14 million TEU a year of containers but handles only 8.2 million TEU (or 20-foot equivalent unit, the standard size of a container and a measure of capacity in the container business).
Still, are you planning the next stage of container development at the new Saeftinghe Development Zone? How do you plan such massive capacity additions years in advance?
Indeed the comparison between the present cargo volumes and actual capacity seems a bit contradictory, but in the last 10-12 years we have had a massive, double-digit growth rate, and moreover, various studies have shown the following growth simulation for the years to come: until 2010, 8%; between 2010 and 2015, 5%; and after 2015, 2.5%.
Taking into account that the necessary procedures and permits take a substantial amount of time, we have to keep moving on forward.
What will be the capacity of the new container terminals at Saeftinghe dock?
By 2015, the capacity will be about 9 million TEU.
There are four-five ports within a striking distance of Antwerp port. How do you compete and retain your No. 2 position among European ports?
The port of Antwerp is known for its high productivity, price friendly rates, reliability and flexibility. It is open to all commodities, which makes it a multi-cargo port.
The strength of the port has grown because of the interweaving of industry and logistics, the fact that we have over 5.3 million cu. m of covered warehouses available, marshalling the classic goods flow.
Are tariffs at Antwerp regulated?
Private companies are free to set their own tariffs. Only the concession fee and port dues are regulated.
What is the management structure of Antwerp port? What kind of financial and operational autonomy does the port enjoy?
The port of Antwerp has become an autonomous entity since 1997, but the city of Antwerp remains (a) 100% shareholder. The port has a complete financial and operational autonomy, led by the board of directors and the management committee.
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First Published: Sun, Nov 09 2008. 11 27 PM IST