14 May 2014
Picture this if you will: you have no experience record in the container handling business but assisted by the fact that you have a strategic partner, who does know the business, you win a small but interesting container terminal concession.
You also have the benefit of being awarded extra points in the concession process by way of handing back to the port authority a shipyard area. You fall out with your strategic partner who finds it impossible to maintain a presence in the business and reluctantly withdraws. This is not the first partner to withdraw.
You are left in a business which is crying out for the application of sector expertise without such an asset on tap. You hire in, on a limited basis, operational expertise but then the consultants are gone and not much has changed in real terms. There is a plan but will theory go into practice without the right guiding hand?
In the meantime, the clock is ticking, cargo is building – double digit growth was registered in 2013 – and deadline dates are approaching when under the terms of the concession certain things need to be done; new equipment and so on.
You want to change the terms of the concession but will the port authority wear it? Numerous stop–start attempts are made to procure equipment. Specifications and pricing are requested but rarely does it go beyond this. There appears to be an underlying aversion to spending serious money.
But maybe this assumption is wrong? Months into the concession suddenly another mobile harbour crane is acquired and delivered to the terminal. Are things now on the right track? Categorically not!
The terminal – the Durres Container Terminal – acquired by the Kurum Group of Turkey as a 35 year concession in early 2013 – has made a very basic and expensive mistake. It acquired a heavy duty mobile which cannot operate on the terminal’s quay – the quay structure is not strong enough to support it.
Another heavy duty mobile is now on order which apparently will be able to work on the quay but the bottom line reality is that there remains very little in the way of progress to see with the operation date.
Have a plan
A world class terminal operator would have developed an investment plan for the terminal prior to the formal handover of the concession and implementation would have begun from day one. This would also not just encompass handling equipment acquisition but a modern terminal operating system as well as comprehensive upgrades to safety and security arrangements with the principal areas of investment complemented by extensive personnel training. The results of this would now progressively be coming to fruition.
Taking the latter into account, the Durres Container Terminal can today be regarded as a missed opportunity. Clearly, Kurum also has its doubts as it is well known in industry circles that it has touted the terminal around to potential buyers but it seems the asking price is too rich to get anyone’s serious attention.
The situation of the Durres Container Terminal, as this publication has recorded previously, is most unfortunate. This facility is the only one of its kind in the country and as such it exerts a strong influence over import and export activity both for Albania and other countries such as Macedonia and Serbia. It has the potential to grow and is growing but it is true to say that this growth is constrained by lack of the right investment at the right time and ultimately by the absence of a professional operator.
There are a number of lessons in this experience, namely: don’t offer any party an advantage in a concession process; ensure that the required professional input is maintained as per terms of the concession; and ensure the designated investment requirements are met according to agreed schedule.
The new Government now in residence in Albania has proven its willingness to re-examine port deals in conjunction with the concession process for the ferry terminal. It is perhaps time to also police the Durres Container Terminal concession in line with the national interest.
