Labor Toolkit

Implementing Port Reform


There are myriad details that must be attended to as port reform initiatives move into their final stages. Dozens of documents and analyses must be prepared and made available to the public, prospective investors, and port operators. The key documents are described below.

Financial Model

Establishing the viability of any given reform package will involve testing its overall financial sustainability, as well as its sensitivity to a few critical variables. Financial modeling should help the public authorities identify the transactions that will prove attractive to private sector partners, while providing them with the revenue streams they need to meet their own financial obligations. The project financial model included in Module 5, with a number of adjustable parameters, should help those responsible for port reform develop a financial picture reflecting the particular conditions of the transactions under consideration, thereby further helping decision makers select feasible packages to offer for bidding by private investors and developers.

The project financial model will be fed with data resulting from the following tasks:

Assessment of staff restructuring costs from the review of labor practices and requirements must be built into the overall cost estimate of the reform program at this stage. Any redeployment of labor necessitated by port reform should preferably be carried out under the auspices of public authorities. Similarly, the attendant cost associated with any such redeployment should be borne by public authorities as well, before the formal launch of the reform process. However, if all or part of these staff restructuring costs are left to the private sector, they should be factored into the financial model used to assess the feasibility of the reforms.

Due Diligence

Public authorities, possibly with help from specialized financial advisors, will have to prepare the required due diligence reports to certify the financial status of the assets and activities to be tendered.

Contractual Document Preparation

Public authorities should draft the contractual documents defining the operational and financial relationships between and among the contracting authority, the regulatory authority, and the private operators. These should especially include all required operational and financial covenants that may be deemed necessary. The details of concession contracts are provided in Module 4.

Bidding Documents’ Preparation

In addition to the proposed draft contract, the tendering documentation should include all documents pertaining to the organization and rules governing the bidding process, with enough information provided to guarantee its transparency and fairness, thereby ensuring the widest participation by potential interested investors or operators possible. All documents and information relevant to the proposed transaction will then have to be displayed for review by potential bidders in a dedicated data room. For more detailed advice on how to structure and manage the bidding process (for more information, see Kerf et al. 1998).

Boxes 2 and 2a depict in detail a typical sequence of actions associated with port reform, with rough time frames associated with each action. This information should be useful in guiding reform decision makers through the entire process—from conceptualization through implementation.


How To Use The Toolkit


Framework for Port Reform

The Evolution of Ports in a Competitive World

Alternative Port Management Structures and Ownership Models

Legal Tools for Port Reform

Financial Implications of Port Reform

Port Regulation:
Overseeing the Economic Public Interest in Ports

Labor Reform and Related Social Issues

Implementing Port Reform

Strategic Preparation: The Interministerial Working Group

Redefinition of Authorities and Powers

Legal Adaptation

Transaction Preparation


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Additional Materials

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