The document summarizes key points from a public hearing on the award of concession contracts for seaports. It notes that there is diversity in the legal regimes governing contracts with port operators and service providers across EU member states. It advocates for transparency in contracting processes proportional to the connection with the internal market. It also argues that contract durations must allow reasonable returns on investment while maintaining risks, and that provisions be possible for quality, performance, competition and sustainability. The document discusses factors around prolonging contracts for incumbent operators and ensuring continued investment. It raises specific issues with the scope and requirements of a proposed EU directive on concession contracts.

1. The Award of Concession Contracts
Application to Seaports
PUBLIC HEARING EUROPEAN PARLIAMENT
Brussels, 21 March 2012
Patrick Verhoeven, Secretary General, ESPO

2. Summary
Diversity of applicable regimes
Transparency where it matters
Matching market access with continuity of investment
Specific issues with EU Directive proposal

3. Diversity of applicable regimes
Port management mostly devolved to a port authority
Port authorities are ‘contracting entities’ with:
 Terminal operators (cargo-handling / passenger services)
 Industry and logistics (warehousing)
 Providers of technical-nautical services
 Other service providers
Many service contracts involve allocation of port land
Legal regimes land-related contracts very different in MS:
 Public law: public service contracts / domain concessions
 Private law: lease agreements
 Mixture or no particular regime

4. Transparency where it matters
Port authorities should be able to set selection criteria
that reflect commercial strategy and development policy
and take into account dynamic nature port sector
Transparency obligations (including use of public
selection procedures) should be proportional:
 sufficient connection with functioning internal market
 exclude contracts single-user facilities (pure land lease)
Durations of contracts must allow reasonable return on
investment but maintain a risk inherent in exploitation
Contract clauses on quality and performance of services,
intra-port competition and sustainability must be possible

5. Current use of public selection procedures to contract port land out
28% Always
32%
Only for plots of land that are
of strategic interest
Subject to other conditions
Never
19%
21%
Source: ESPO ‘Fact-Finding Report’ on Port Governance in Europe (2011)

6. Matching open market access with
continuity of investment
Prolongation of contracts should not be an unconditional
and automatic right of incumbent operators
But if an incumbent operator performs well and commits
to continue investment, there should be scope to prolong
If not, operators would typically cease all investments in
the last years of the agreement
Possible solutions:
 Anticipate prolongation options in original contract and
make conditions specific
 Set objective parameters to make prolongation decision

7. Specific issues with EU Directive proposal
Potential added value for port sector under discussion
Scope:
 Will not apply to all land-related contracts (case-by-case)
 Clearer for technical-nautical service contracts
 Complementary instrument EC ports policy review (?)
Threshold very low for the port sector, alternative
calculcation based on surface would be better
Procedural requirements are quite stringent, which may
conflict with dynamic nature of the port sector
Possibility for prolongation of contracts should be clearer

8. Thank you for your attention!
Patrick Verhoeven – Secretary General
European Sea Ports Organisation (ESPO)
Treurenberg 6 – B-1000 Brussel / Bruxelles
Tel + 32 2 736 34 63 – Fax + 32 2 736 63 25
Email: patrick.verhoeven@espo.be – www.espo.be