Cinco Dias (translated from Spanish)
As an expert on port management, Mr. MMJ Subramaniam defends the flexibility and agility provided by the private sector against the Administration. Mr. Subramaniam now advises on projects in Yemen and Iran, and visit Madrid Summit as rapporteur Sumaq 2007.
With more than 40 years dedicated to port management, Mr. MMJ. Subramaniam, former vice chairman of the Port of Singapore, began when all the work to be done in the port were manual, and now assists with enthusiasm to which he calls ‘container revolution’.
He visits Madrid to celebrate the last week of the fourth edition of Sumaq Summit, a conference organized by the Instituto de Empresa business school which analyzes emerging trends in the field of infrastructure and logistics.
Do you think governments are really aware of the importance of infrastructure and logistics for the march of the economy?
“A sound public infrastructure, including ports and efficient logistics are two basic needs for economic development in all countries. Moreover, these factors often act as catalysts for the development of society in general. But it is not so important if governments are aware of it or not, but whether or not there is political support. That is the most important. In fact, to acquire the capacity to develop infrastructure, money, technology and skilled labor are almost less important than political support. If it exists, everything can be achieved.”
From your experience in the port sector, what management models are recommended for international ports?
“There are various models of port management. There is a fully public model, in which the government builds and operates the port. In another formula, the executive terminal building, purchase of equipment and machinery, and management are awarded to a private company for a few years. In these cases the government pays the fees and incentives for enterprise management.”
“Thirdly, the executive which are private companies can build part of the port and provide equipment. Under this formula, the contractor usually maintains the award and obtain the benefits of holding for 20 or 30 years. In other cases, the Government only provides the land and the remainder are being provided by private operators. This contract usually lasts more than 50 years. In these last two models, at the end of the concession, the port returns back to government hands.”
What is the best?
“There is no one universal model of management.” It all depends on the circumstances of each country, including their budgets, availability of skilled labor and technology, the power of unions, if the country’s laws allow for the management of ports, or foreign investments, although one can say that private management is more agile.”
What role should private capital investment play in ports?
Private capital, whether domestic or foreign, has a very important role not only as a supplement to state and accelerating investment in infrastructure, but as a generator of added value, experience, technology and skilled labor. In fact, on my last time as Vice President of the Port of Singapore, we did consider having an IPO.”
What do you think of the plan to expand the port of Shanghai?
Shanghai is doing very well to build container terminal infrastructure appropriate to business in the Yangtze. Without these, it would be impossible for this level of imports and exports, because the cost would be much higher. This port acts as a catalyst for economic development, creation of jobs, training for the local population, promotion of foreign investment and bringing of new technologies to China. I recommend this public management model to other countries.