The document discusses challenges facing port project funding after the economic crisis. It notes that while trade volumes have rebounded, financing is less abundant and more expensive. Several regions are experiencing port capacity issues and congestion due to increased ship and cargo volumes. Attracting private financing for new port development projects will require clear regulations, mitigation of investment risks, and facilitating projects that attract investors and operators.

1. 1
Port projects funding
after the crisis
- TOC Americas 2010 –
Rio de Janeiro 9-11 November
Michel Donner
Port & Maritime Transport Consultant

2. Michel Donner, Port & Maritime Transport Consultant
2
Contents
 Role of the port industry
 Trade rebound
 Congestion knocking at the door ?
 Financing : less abundant, more expensive
 Private capital flows to developing countries
 Endangered concessions
 Attracting finance for port projects

3. Michel Donner, Port & Maritime Transport Consultant
3
Role of the port industry
 To serve the international trade of the Country,
incarnated by:
• The Citizen (local and national)
• The Consumer
• The Economy
• The Exporter
• The Importer
 Providing them with port services and capacity in time
and in terms of quantity, quality, efficiency and cost
 Enabling the national products to compete on the
exterior markets on a “level playing field” or better.

4. Michel Donner, Port & Maritime Transport Consultant 4
Trade rebound
Merchandise exports, percent change
Source : Global Economic Prospects
10 Jun 2010 – World Bank

5. Michel Donner, Port & Maritime Transport Consultant
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Volumes are back to 2008 level
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
deepseafullTEUJan-Jul
source Datamar
Brazil deepsea full TEU volumes Jan-Jul
2008
2009
2010

6. Michel Donner, Port & Maritime Transport Consultant 6
And so are the ships… and congestion
Source: Datamar AIS
3 Aug.2010

7. Michel Donner, Port & Maritime Transport Consultant 7
And so are the ships… and congestion
(2)
Source: Datamar AIS
3 Aug.2010

8. Michel Donner, Port & Maritime Transport Consultant 8
Berthing delays
13 13
11
7
58
12
18
6
0
10
20
30
40
50
60
70
Santos Santos (2) Paranagua Rio Grande
Averagewaitinghours
Berthing delays - Brazil
2008-2010 (containerships)
2008 2010

9. Michel Donner, Port & Maritime Transport Consultant 9
Berthing delays
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
daysonroads
1 - 21 Oct average 2.4 days
Santos berthing delays
72 vessel calls

10. Michel Donner, Port & Maritime Transport Consultant 10
Berthing delays
0,0
0,5
1,0
1,5
2,0
2,5
Berthingtime(days)
1 - 21 Oct avg 18hrs
Paranagua berthing delays
41 vessels

11. Michel Donner, Port & Maritime Transport Consultant 11
Berthing delays
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
Timeforberthing(hrs)
1 - 21 Oct average 6 hrs/call
RGR berthing delays
52 calls

12. Not enough ? … too late ?
Michel Donner, Port & Maritime Transport Consultant 12
Upcoming additional capacity
Santos Libra 300m quay 2011
Santos BTP I 1,1 mio teu/y 2013
Santos Embraport I 0,4 mio teu/y 2012
Itapoa (SC) TSC I 0,3 mio teu/y 2010

13. Portos, em busca de soluções 13
Regiões com problemas de capacidade
2008
Source : Drewry

14. Michel Donner, Port & Maritime Transport Consultant 14
Regions with port capacity problems
2010
Source :Drewry and own research

15. Michel Donner, Port & Maritime Transport Consultant
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Less financial capital available, more
expensive
 increased debt of high-income countries
 public sector financing needs in high-income countries
 competition for funds is increasing the cost of
borrowing
 banks need to rebuild their balance sheets
 increased risk aversion on the part of investors

16. Michel Donner, Port & Maritime Transport Consultant 16
Foreign direct investment flows (FDI)
0
100
200
300
400
500
600
700
2004 5 6 7 8 9 10 11 2012
$bn
Source : World Bank June 2010
Foreign Direct Investments flows to Developing
Countries
FDI flows, $ b

17. Michel Donner, Port & Maritime Transport Consultant 17
Net private capital inflows to Developing
Countries will stage a modest recovery
Source : Global Economic Prospects
10 Jun 2010 – World Bank

18. Michel Donner, Port & Maritime Transport Consultant 18
Map of Endangered concessions
2 concessionnaires
breaking camp
Tender prequalification
conditions unclear, now under
Congress/Government review
Endangered
terminal
concessions
Resistance by
existing
concessionnaires
$ 105 mio. terminal
without concessionnaire
since 2 years
Only one
bidder nationalisation
Port congestion;
Uneven playing field; complex
environmental approval
procedures
No bidder; incumbent
concessionnaire
threatening lawsuit

19. Michel Donner, Port & Maritime Transport Consultant 19
Attracting financing for port
development projects
 Non-traditional investors (ex. Pension funds, hedge
funds) as well as commercial lenders have, mostly,
left the scene, time-being. There are signs that some
might start showing renewed interest, though.
 It is still necessary to look for private investors
because public funding is also under pressure.
 Public-Private Partnerships (PPP) and the Landlord
model remain the most adequate vehicle.
 Operators remain the same, but, due much tighter
financing availability, as well as for their own
protection, they are much more cautious.

20. Michel Donner, Port & Maritime Transport Consultant 20
Attracting financing for port
development projects (ctd)
 Over-ambitious or ill-timed public tenders run the risk
to find few candidates
 Difficulties encountered by ongoing concession
projects in the region scare investors away
 Port projects can take from 5 to 10 years to be
commissioned
 Risk aversion can be mitigated and overcome by:
 Clear rules
 regulation through contract
 Alignment of respective goals & strategies
 Level playing field.

21. Michel Donner, Port & Maritime Transport Consultant 21
Conclusion
 Trade volumes recovery outpacing financing
availability
 Congestion is back in the same places as
before the crisis
 To fully play the role assigned to a country’s
port system in terms of timely capacity
development, Authorities need today to go
out of their way to propose and facilitate the
right projects that will attract the right private
investors and operators.

22. Michel Donner, Port & Maritime Transport Consultant
22
Thank you very much for your attention
Illustration : Thierry Cap de Coume

23. Michel Donner, Port & Maritime Transport Consultant
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Post Scriptum
I would like to make a final statement :
One may agree or disagree with the policies
implemented by SEP, but the singlemost decisive
achievement made under the tenure of Minister Brito
is the completion of the program of dredging and
deepening of the Brasilian ports.
This remarkable advance will change the landscape
of the South Atlantic commercial navigation, and
should go down in history as a decisive
accomplishment.
The coming generations of the Brasilian port, trade
and maritime communities will remain thankful.