Our ports are key for Spanish exports—one of the main drivers for the economic recovery—they are of vital importance in their role of contributing to the socioeconomic development of Spain. The Spanish port system faces important challenges, although if all the agents involved were to join forces, the current weaknesses could actually become strengths, and the threats from the competitive environment could become opportunities.
In Spain, there are 28 port authorities that manage 46 ports, handling approximately 480 million tonnes per year, contributing 20% to the transport sector’s GDP and 1.1% of the total GDP and creating more than 150,000 direct and indirect jobs. The overcapacity existing in the Spanish port system—a result of the excess in European funding and the structure of government of the port authorities—is responsible, among others, for the deterioration in competitiveness of the Spanish port system. The level of use given to Spanish port infrastructure is less than 36% of the available infrastructure, when the optimal range of use of infrastructure is approximately 80%. It seems reasonable then that before concentrating efforts on new infrastructure which hinder competitiveness, the focus should be on optimising the ones available.
The profile of the major investors and operators in the Spanish ports, grouped under the Plataforma de Inversores en Puertos Españoles (PIPE), is very interesting and attractive for the owner of the assets—in this case Spain—represented by the Public Administration. They are investors who look to the long term by their very nature—families with several generations’ history in the sector, pension funds, infrastructure funds, etc.—with a profile much more attractive than that of others whose investment horizon and expected returns on investment are not in line with the interests of the public port domain’s owner. The State should be conscious of the importance of creating a regulatory framework which makes it possible to attract the investor profile best suited to the interests of all the Spaniards.
The investors and port operators in Spain have been the ones who have coped with the effects of the severe crisis in the port sector. From 2008 until today, the level of losses in terms of traffic with respect to the forecasts is equivalent to traffic for an entire year; whereas the public revenues of the port authorities have continued to increase in this period, mainly due to the land value—which in many ports have remained at pre-crisis values—and due to the establishment of a minimum traffic for which the concessionaire pays the Administration regardless of actual traffic. It is precisely the cost of land, together with the labour costs of the freight handling system, which is one of the factors that most undermine the Spanish ports’ competitiveness, and therefore, from the Spanish economy itself.
Overcapacity could actually become an opportunity to attract certain traffic from other countries, which would lead to the generation of gross added value and the creation of jobs for Spain. To do this, and to solve the problems that were previously described, it is essential to compete under the same conditions as other European ports and in our competitive environment. One of the most evident and key aspects is being able to amortise investments within the same term as our competitors; in Spain, the maximum term of a port concession lasts 35 years, whereas in the rest of Europe, it can reach 70. The effort made by the Government with the approval of Law 18/2014, approving Urgent Measures for Growth, Competitiveness, and Efficiency, allowing the extension of concession periods to 50 years, is worth mentioning here. Nevertheless, its success will be determined by the application of the aforementioned law.
In this sense, it does not seem reasonable to demand new investments in light of the current situation of overcapacity, which would diminish the ports’ competitiveness with a double effect: it would lessen the competitiveness of Spanish exports and imports and transshipment traffic would continue to be lost, which would be detrimental to the countries in our competitive environment. The reasonable thing would be, as provided for by law, to link the extensions of concessions to the recognition of overinvestments made in the past, making it possible for the concessionaire to apply improvements in competitiveness that would affect the end customer.
Spain has always been an international benchmark in the port sector, and by retaining the profile of the current investors and operators in the Spanish port system with the appropriate legal framework and flexible conditions in its application, the established objectives can be achieved. The common mission should be the strengthening of the Spanish economy, enhancing the competitiveness of Spanish companies that export through the ports, generating gross added value and creating sustainable employment. By boosting the ports’ competitiveness, overcapacity can stop being a weakness to become a strength instead. Spain has an extraordinary opportunity to consolidate its recovery and come out even stronger after the crisis, and the Spanish ports should play a central role in this common objective. Ortega y Gasset said that ‘it is only possible to progress when you think big and it is only possible to advance when you look afar’. This is the time to be ambitious, to look afar, and to think big for the Spanish ports.
José Luis Almazán is eexecutive vice president of the Platform for Investors in Spanish Ports, PIPE