Port infrastructure: Green Paper

This Green Paper aims to launch a debate on the efficiency of ports and maritime infrastructure, their integration into the multimodal trans-European network and the application of competition rules to this sector.

ACT

Green Paper of 10 December 1997 on seaports and maritime infrastructure [COM(97) 678 final - Not published in the Official Journal]

SUMMARY

Background

The port sector handles more than 90% of the Union's trade with third countries and approximately 30% of intra-EU traffic, as well as over 200 million passengers every year. The sector shows great diversity between regions in terms of structure, operation, organisation and legal framework.

Competition between and within ports is increasing for a number of reasons, highlighting factors that distort trade flows between Member States:

• liberalisation of the internal market;
• technological changes (application of information technology, standardisation of loading units);
• development of the trans-European network, which provides users and operators with greater choice in an intermodal environment.

A Community framework is needed to ensure the principle of free and fair competition.

Ports and the common transport policy

The Green Paper notes that ports have so far not been at the centre of the common transport policy. However, they have a role to play in the trans-European transport network (TEN-T) by:

• increasing the efficiency of the European transport system;
• encouraging growth of intra-EU trade and trade with third countries;
• overcoming congestion of the main land-corridors;
• enhancing maritime links with island and peripheral regions;
• strengthening the multimodal aspect of the TEN-T.

To connect the TEN-T with the networks of Central and Eastern Europe and the Mediterranean, the Commission proposes that standards be promoted in these ports comparable to those found in Community ports. The programmes for cooperation with third countries contribute to achieving this aim.

Intermodal transport is an essential component of the common transport policy for sustainable mobility. In this context, the importance of ports is clear in that they are crucial connecting points, transferring goods and passengers between maritime and land-based modes. Improved port efficiency will contribute to the integration of modes in a single system, on condition that there is interoperability and interconnection between systems (common information system, reduction of administrative procedures, standardisation of loading units).

Despite the increasing turnover in European ports, intra-European maritime traffic has not yet increased its market share vis � vis that of the road transport sector. The promotion and integration of short sea shipping into environmentally-friendly multimodal transport networks has become an objective of the Union's transport policy. Priority is therefore given to short sea shipping projects in the TEN-T and measures will be supported under the PACT programme (the new Marco Polo programme). A cost-recovery pricing policy in road transport that would better internalise external costs would be instrumental in boosting short sea shipping.

The Green Paper stresses the importance of maritime safety. Primarily focused on ships, this nevertheless also has a direct impact on ports, as it requires port authorities to co-operate in the implementation or enforcement of the legislation and to ensure a high level of port services such as pilotage, mooring and towage that are intrinsically linked to the safety of ships. The Commission also makes suggestions for improving the integration of environmental considerations in the planning of port development.

Finally, in the context of R&D programmes, the Commission supports maritime and port projects, including cargo tracking and tracing and electronic chart display and information systems.

Financing and charging for ports and maritime infrastructure

The financing of ports and maritime infrastructure and policies on charging their users vary from one country to another, reflecting the considerable differences in the approach taken towards their ownership and organisation. Ports may be owned by the State, regional or local governments or by private enterprises. In the past, ports tended to be seen mainly as suppliers of services of general economic interest provided by the public sector and financed by the taxpayer, whereas now the trend has moved towards considering ports as commercial entities which ought to recover their costs from port users who benefit from them directly. The port industry can therefore be seen as an industry in transition.

The Green Paper assesses the EU's current position, in particular with regard to State aid to the maritime transport sector. It highlights the lack of transparency of port accounts, transparency being an essential condition for the effective and fair application of State aid provisions, and suggests that stock be taken of public aid granted to the major ports handling international traffic and of current port charging practices. It shows the need for a new direction in EU policy and proposes a Community framework for port charging.

A step-by-step approach is required, accompanied by a general approach to the pricing and financing of infrastructure for all modes of transport. Other factors should be taken into account when establishing this framework, in particular the fact that a certain number of European ports are located in less developed and peripheral areas or on islands. The framework should therefore be flexible enough to meet their needs.

In the port area, the Commission advocates a general framework requiring charges to be linked to costs. The most frequent port charges are:

• charges for the provision of services and facilities to enable a ship to enter safely and use the port;
• charges for specific services or supplies rendered;
• rents or charges for the use of land or equipment owned by the port.

Depending on the individual port, these charges reflect to varying degrees the use of services and facilities, both of which should be addressed in a future charging framework.

Different approaches are possible with regard to infrastructure costs:

• average cost pricing;
• charging for operating costs only;
• marginal cost pricing.

According to the Green Paper, the long-term objective of an infrastructure pricing policy should be to charge for marginal social costs (capital, operating, environmental and congestion costs) of infrastructure use. This would ensure that investments are demand-driven and would also ensure fair competition in the port sector in the longer term.

Outside the port area, the Commission advocates a user-pays policy for all modes of transport, which would make for fair competition and affect the distribution of cargo flows among European ports.

The Commission is particularly interested in:

• maritime access to ports: it suggests applying with caution the polluter-pays principle to ports which, owing to their location, are subject to silting and hence to substantial dredging expenses;
• navigational aids (lighthouses, buoys, radio-navigation systems, maritime traffic organisation systems, etc.).

Port services: organisation and market access

Ports provide a range of services and facilities: pilotage, towage, mooring, cargo-handling, storage, etc. They also offer ancillary services, such as fire-fighting, bunkering, water supply and waste-reception facilities. Depending on the port, these services are provided either as a comprehensive package or separately, either on request or automatically.

As to cargo-related services, cargo-handling has been one of the activities most profoundly affected by technological development and inter-port competition. The market trend is towards capital concentration, specialisation and vertical integration. The provision of these services is gradually being transferred from the public to the private sector in order to increase efficiency and reduce public expenditure on port labour costs.

With regard to services related to the ship, the Green Paper distinguishes between:

• pilotage, a characteristic example of a mandatory technical-nautical service organised on a monopoly basis in most European ports;
• towing and mooring services, provided by either the public or private sector on a voluntary or mandatory basis, exclusively or in competition with other operators.

According to the Green Paper, these port services are to be seen as an integral part of the maritime transport system. Treaty rules, notably in the field of competition, should therefore be applied more systematically. This is consistent with the European Union's policy to encourage modernisation and efficiency of the sector, taking into account structural developments in world-wide competition.

In conclusion, a regulatory framework should be developed at Community level aiming at a more systematic liberalisation of the port services market in the main ports with international traffic. The aim of this framework would be to establish a level playing field between and within Community ports while ensuring compliance with port and maritime safety standards.

RELATED ACTS

Directive 2005/65/EC of the European Parliament and of the Council of 25 October 2005 on enhancing port security (Text with EEA relevance) [Official Journal L 310 of 25.11.2005].

Communication from the Commission to the European Parliament and the Council - Reinforcing Quality Service in Sea Ports: A Key for European Transport [COM(2001) 35 final - Not published in the Official Journal].

Last updated: 24.01.2008