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EU approves plans to boost competition in port services

LONDON-The European Commission have approved radical plans to inject competition in port services, including cargo handling, distribution, pilotage, mooring and towage.

"It is now time, in the interests of operators, (port) authorities and consumers, to establish clear rules on access to the port services market," said European transport commissioner Loyola de Palacio.

The proposals, covering ports that handle over 3mn tons of cargo a year, also recommend maximum periods for operating concessions and for call for transparent tendering for port contracts.

The commission, the EU's executive agency, also says governments should only be allowed to limit the number of competing port service providers on grounds of maritime safety or capacity constraints. "The aim is to establish clear rules and to set up an open and transparent procedure for access to (port) services," the commission said. It said a key requirement is that there should be at least two service providers for each category of cargo. There is no reason why shipping lines should not carry out services on their own behalf-so-called self-handling-rather than being compelled to buy them from port authorities, the commission said.

The commission called for an outside body to award operating concessions when a port authority which engages in commercial activities is competing against a private firm. "Port authorities cannot be both judge and interested party at the same time. Instead (EU) member states will have to find an impartial judge." The commission said it proposals will help promote changes already underway in the port industry. "Competitive market forces have gained ground and the public sector has been pushed back", leading to improvement in the quality of services and reduced prices.

The proposals will be welcomed by shipowners because they promise to trim costs, especially for cargo handling which account for a significant, and rising, share of overall transport costs.

But they face opposition from labor unions which fear self-handling will take jobs from longshoremen-the International Transport Workers Federation has warned there will be "war on the waterfront" if EU governments approve the measure.

British ports, which are mostly privately owned and provide port services, unlike publicly owned port authorities in continental Europe which act as landlords to private port companies, are also concerned the proposals will deter investment at a time of a growing shortage of capacity, notably in container handling.

Ports accounts for around 70% of the EU's external trade and the commission is trying to boost their share of trade between EU countries by promoting short-sea shipping at the expense of trucking. Journal of Commerce ONLINE