Comparison of Public–Private Partnerships in Airports and Seaports in Low- and Middle-Income Countries

Abstract

The paper examines similarities and differences in public–private partnership (PPP) structures between airports and seaports in low- and middle-income countries using data from the World Bank's Private Participation in Infrastructure (PPIAF) database, and puts forward some hypotheses about the reasons for the differences. Qualification of the results is also made with available literature on airport and seaport PPPs. It uses eight granules — the eight “Ws” — as the basis for the analysis, comparing PPPs in terms of “What”, “When”, “Where”, “Why”, “Whole”, “Who”, “Whom”, and “Which way”. Although the similarities between port and airport PPPs generally outweigh their differences, there are several areas in which they diverge. These are the characteristics of the private-sector partner, the PPP models used, the use made of competitive tendering, and the bundling of facilities. Airport investors tend to attract a wider array of investor types than seaports, where the focus is more on specialised operators in build–operate–transfer (BOT) agreements. These differences have their roots in four main structural variations between the two industries: the level of integration of infrastructure and services, economies of scale, public service obligations, and the differing roles of competition and regulation.

Keywords:

• PPPs
• partnership
• seaport
• airport
• terminal

ORCID

Sheila Farrell http://orcid.org/0000-0002-9233-3667

Notes

1. All ports aspire to reach the throughput levels at which intra-port competition becomes commercially viable. This point can be reached at lower throughput levels in many low- and middle-income countries (particularly in Africa and Latin America) than in most developed countries because of the high tariffs that can be charged as a result of the lack of inter-port competition. In addition, regulatory structures are very weak in most low- and middle-income countries; consequently, bringing in intra-port competition at relatively low throughputs is often the only tool available to control the private monopolies created by port PPPs.