Awarding of Port PPP contracts: the added value of a competitive dialogue procedure

Abstract

Nowadays, port development and operations are typically structured as a Port Public–Private Partnership (‘Port PPP’) between a public port authority and a private terminal operator. Port PPPs contribute maximum value to an economy when they are optimally scoped and structured in terms of allocation of investment, operational and financing responsibilities and risks amongst the parties. In order to unlock this value potential of Port PPPs, a port authority should award the contract efficiently and effectively to the most suitable terminal operator for the project specifics. In the practice of awarding Port PPPs, however, it is also observed that many initiatives are not successfully implemented. The authors’ experience in the maritime industry has identified that early private sector involvement in the design and awarding of the Port PPP contract significantly contributes to the success of a Port PPP. This article is aimed to inform policy and decision makers, port authorities and terminal operators on the added value of a competitive dialogue procedure in the awarding of Port PPP contracts. The conceptual framework presented in this paper demonstrates that especially for particularly complex projects early dialogue with candidates contributes to improved overall project value by decreasing expected transaction costs and increasing expected contract value.