Port reform in Taiwan: new government opportunities or port competitiveness?

Transcription

1 2010 IFSPA Conference Port reform in Taiwan: new government opportunities or port competitiveness? Rong-Her CHIU, PhD Assistant Professor, Department of Shipping and Transportation Management National Taiwan Ocean University (Keelung, Taiwan) ( October

2 Outline Background information Port reform measures Port reform in Taiwan Conclusions 2

3 Background information (Seaports in Taiwan) Shanghai Xiamen Fuzhou Taichung Mailiao Taipei Keelung Suao Hoping Hualien Kaohsiung TAIWAN 3

4 Shipping industries in Taiwan Well developed shipping industries and port business. Three biggest container carriers: Evergreen Marine Corporation, YangMing Line, and Wan Hai Line. There are also many bulk carriers providing tramp services. In 2009, the total ships controlled by the Taiwanese was more than 29.8 million deadweight tons (DWT), which accounted for 2.7 percent of the total world ship s tonnage. Taiwan ranked as the country with 11th largest controlled fleet in the world although over 86.35% was the so-called flag-of-convenience (FOC) ships (UNCTAD, 2009, p. 53) Domestically, many companies provide services (90 ocean carriers, 580 maritime freight forwarders, 380 shipping agents, 38 container depot operators). 4

5 Driving forces of port reform Influenced by the UK government s port privatization program in the late 1980s (Tull and Reveley, 2008). It could be one or more several reasons (Brooks and Cullinane, 2007). : globalization of trade; new public management philosophy; technological innovation (such as vessel, cargo tracking, or management information systems); and new government opportunities (processes and strategies) 5

6 Ways to conduct port reform Devolution of port authority through: control, consultation, partnership and privatization programs. (Brooks and Cullinane, 2007). Three main types of port reform are: commercialization, corporatization and privatization (Tull and Reveley, 2008) Many methods can be used to conduct port privatization, such as: commercialization, liberalization, sale of assets, corporatization, concessions (BOT or leases), joint ventures, and management (or technical) contract (Cass, 1998) 6

7 Why launch port privatization Cass (1998) mentioned about the purposes to privatize ports could be:(1) to obtain open market finance on favorable terms, and (2) to promote efficiency and competition. Reveley (2008) presents some main arguments to justify privatization, including: (a) expansive and inefficient ports constrain trade, (b) the efficiency and know-how of the private sector should be introduced into ports, (c) reducing demands on the public budget, (d) reducing expenditure on port labor by removing the state from port operations, and (e) other objectives; especially in the UK, it also included raising revenue and encouraging share ownership amongst the general public.. 7

8 Port reform process in Taiwan It can be roughly divided into two stages. The first stage, between 1989 and 1999, was concentrating on privatization and liberalization; Beginning from 2000 is the second stage, focusing on organization restructure (i.e. port authority re-organization). 8

9 Important events of port reform in Taiwan_1st stage Year Important event Effect 1989 Taiwan central government (Executive Yuan) announced launching state-owned enterprises privatization policy to increase operational efficiency and flexibility of state-run enterprises Taiwan government filed application with GATT (later WTO) to rejoin the Organization, which launching liberalization policy on all its industries. January 1998 January 1999 Stevedore services in Keelung port was privatized. Dock worker problem solved in Keelung port. Stevedore services in Kaohsiung port was privatized. Dock worker problem solved in Kaohsiung port. On maritime transport sector, as of 2010, two companies were privatized: Yang Ming Line (on 15 Feb. 1996) and Taiwan Navigation Corporation (on 20 June 1998). On 1 Jan. 2002, Taiwan became the 144 th WTO member (Chinese Taipei). Port labor is no longer employed by the Harbor Bureau. Dock workers are employed by the private stevedore companies. The number of stevedore companies is no longer restricted; those that meet the conditions can be set up freely to provide cargo-handling services. Terminal operators and consignees with more choices of stevedore service. The same effect as happened in Keelung port. 9

10 Important events of port reform in Taiwan_2nd stage August 2000 New ruling DPP party took office and decided to change Port Bureau as a business entity. Considering to invite local govern government to organize Port Council to administer port planning and operations MOTC proposed the so-called four acts for maritime and port reform to Executive Yuan (Parliament) for promoting reform of maritime administration and port operation. Parliament did not pass those Acts in February 2005 MOTC again submitted the Proposed Act of Harbor Bureau Establishment and Supervision to Parliament. Parliament did not pass the proposed Act MOTC submitted port reform acts (including Organization Act of Maritime and Port Administration and Act of the Establishment of Taiwan Port Corporation Limited) to Parliament. If the proposed Acts approved by Parliament, Maritime and Port Administration will be set up in 2012; port businesses will be operated by the staterun Taiwan Port Corporation. No action due to no consensus between central and local government. Central government was also under re-organization to be completed in Jan No action. No action. To be decided. There is no strong opposition on the reform from the port labor union. 10

11 Stage 1 results: Liberalization of port services as of January 2010 Category Service item Kaohsiung Taichung Keelung Taipei Hualien Towage Partial Partial X V X Port Fueling V V V None V Watering V V V V X Service Emergency repairing V V V V V Pilotage X X X X X Wharf Terminal operation V Partial Partial V X and Mooring & unmooring services V V V V X transit Stevedore services V V V V V shed Warehousing Partial V Partial V Partial services Tally service V V V V V Note: X: not liberalized, V: fully liberalized, Partial: partially liberalized, None: no service. 11

12 Stage 2 plan: Proposed Changes of Port Governance in Taiwan Ministry of Transportation and Construction Department of Navigation & Aviation of MOTC Regulatory Function Maritime and Port Bureau Supervision Harbor Bureaus (Keelung, Taichung, Kaohsiung, Hualien) PRE-CORPORATIZATION Port planner and manager of cargo operations & marine services (State-owned) Taiwan Harbor Corporation (4 branches: Keelung, Taichung, Kaohsiung, Hualien) POST-CORPORATIZATION Fig. 3. Proposed Structural Changes to the Governance of the Ports in Taiwan Sources: Internal documents, MOTC (2010) 12

13 Why needs the 2nd stage port reform?_1 Unsatisfied results of the first stage reform. Some serious problems hampering the further development of port businesses, such as: (1) central government is lack of a comprehensive plan of port function, which causing unnecessary interport competition; (2) it is lack of integration and horizontal cooperation between governmental agencies, which weakening the generation of more port businesses from free trade zone project; (3) government is lack of a clear positioning plan of its ports in the Asian market, which delaying the approval of constructing a mega container terminal in Kaohsiung port and possibly causing the loss of competitiveness; 13

14 Why needs the 2nd stage port reform?_2 Some serious problems hampering the further development of port businesses, such as: (5) port authorities were anchored to bureaucratic structures and slow decision-making procedures; (6) aged port employees with civil servant status were lack of motives to work hard, which diminishing the port productivity and competitiveness, etc. (4) delay of expanding direct cross-strait shipping links between Taiwan and China causes Taiwan s ports losing opportunity to acquire transshipment traffic from massive Chinese mainland market. 14

15 Conclusions Many port have conducted port reform programmes. There are various measures can be used for port reform, such as: commercialization, corporatization and privatization. New opportunities for government in Taiwan to gain from the 2nd stage port reform, such as: The improvement of operational efficiency. The enhancement of competitiveness. The decrease of costs or charges to port users. The boost of port revenues. 15

16 Thank you Welcome to visit National Taiwan Ocean University Keelung, Taiwan ( 16