The effect of container terminal concessions on port performance

Ports are being privatized in the belief that enterprise-based ports can react faster to global changes and are therefore more efficient than public ports. In the past years many concessions have been granted in order to privatize port facilities. However, if the public authorities and governments want to obtain more benefits from these concessions, more insights into concession characteristics are needed to develop more innovative contractual arrangements. This thesis provides insights into the container terminal concessions by first investigating whether the concessions lead to a better port performance and then focussing on two important characteristics of container terminal concessions, namely the duration of the concessions and the private entities participating in the concession. The port performance is measured in port throughput and in order to get an unambiguous measurement the thesis focuses on one specific terminal. The focus is on container terminals because containerized trade flows have increased rapidly in the last three decades, implying that it is in an interesting market to observe. By utilizing a dynamic panel model, we try to capture the short- and long-term effects of container terminal concessions on the port performance. The dynamic panel model we used is the Bårdsen Error Correction Model. We estimate the Bårdsen ECM with the Newey and West standard errors in order to correct for serial correlation and with the Driscoll and Kraay standard errors in order to correct for serial correlation and cross-sectional correlation. Only the use of Driscoll and Kraay estimators has shown a positive influence of concessions on port throughput.