Module 8 : Implementing Port Reform
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Module 8 : Implementing Port Reform. Pulling it all together. Implementing Port Reform. Strategic preparation. Redefinition of Authorities and Powers Legal Adaptation Transaction Preparation. Interministerial Working Group (IWG). Mandate :. define the objectives of port reform

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Implementing Port Reform

  • Strategic preparation

  • Redefinition of Authorities and Powers

  • Legal Adaptation

  • Transaction Preparation

Module 8


Interministerial Working Group (IWG)

  • Mandate :

  • define the objectives of port reform

  • have them approved by the Government

  • prepare a Port Sector Policy Paper.

  • Composition :

  • representatives of the various ministerial departments interested in port reform…

  • collectively gathering the required competence and…

  • independent from any interest group

Module 8


Hiring Advisers

  • To do what ?

  • Refine the institutional options to be implemented

  • Prepare the legal and regulatory measures required

  • Draft many complex documents (laws, bidding documents, draft contracts…)

  • Who ?

  • Economic and regulatory consultants

  • Legal consultants

  • Technical consultants

  • Environmental consultants

  • Investment bankers and financial consultants

Module 8


Implementing the reform

  • Time frame :

  • six to twelve months to establish a strategy

  • one to two years to implement the reform

  • Reporting relationship :

-the IWG will logically report to the Head of Government

  • IWG Work plan :

-review of the strategic situation of the port sector (market conditions, competition conditions, domestic legal and regulatory conditions, domestic institutional arrangements, national strategic objectives)

-decide on the best port sector institutional and management model

Module 8


Implementing Port Reform

  • Strategic preparation

  • Legal Adaptation

  • Transaction Preparation

  • Redefinition of Authorities and Powers

Module 8


Redefinition of Authorities and Powers (1/3)

  • Regulatory principles : if an economic regulatory mechanism is needed, the mandate, operating rules and composition of the regulatory body should be established

  • Port Authority : redefinition of its status, mandates, missions and responsibilities, reporting and monitoring relationships.

  • Consultations : establishment of official consultation procedures between the private sector and the local public bodies

Module 8


EU recommendation : Long-Term Marginal Social Cost pricing

Redefinition of Authorities and Powers (2/3)

  • Public infrastructure pricing :

  • Introduction of market principles in infrastructure pricing

  • Operational infrastructure : commercial terms

  • Basic infrastructure : average cost pricing, charging for operating costs only, marginal cost pricing

  • Full cost recovery/competitiveness dilemma

  • Allocation of infrastructure charges between the ship and the cargo : assessing charges only against vessels

Module 8


Redefinition of Authorities and Powers (3/3)

  • Labor redeployment :

  • Early interactions with the unions give reform the best chance to succeed

  • Areas to be discussed : staff redeployment, retraining, procedures and compensation principles

  • Contract management principles and procedures should be widely publicized within the country and opened to interested foreign investors and operators

Module 8


Implementing Port Reform

  • Strategic preparation

  • Transaction Preparation

  • Redefinition of Authorities and Powers

  • Legal Adaptation

Module 8


Legal Adaptation

  • Conduct legal due diligence, identifying required legal changes

  • Conduct legal review of all aspects associated with port labor reform

  • Draft new port sector legislative framework

  • Draft by-laws of reorganized public entities, Port Authorities and regulatory authorities

  • Draft legislation governing contractual arrangements between public authorities and private commercial partners

  • Draft standard bidding documents and standard contractual documents

  • Prepare all necessary briefing documentation to present the new legislative package for Government and parliamentary approval

Module 8


Implementing Port Reform

  • Strategic preparation

  • Redefinition of Authorities and Powers

  • Legal Adaptation

  • Transaction Preparation

Module 8


Transaction Preparation

  • Financial Model :

  • Preparation of project cost estimates

  • establishment of tariff principles, structure and levels

  • estimation of market demand and of corresponding revenues

  • determination of the level of government support

  • assessment of tax, dividend and foreign exchange requirements and their cash flow implications

  • Due diligence

  • Preparation of contractual documents, including all required operational and financial covenants

  • Preparation of bidding documents

Module 8


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