Tag: financing

AUGUST 2016 FOR THE DEVELOPEMENT OF SHIPBUILDING INDUSTRY

A WINNING MARITIME STRATEGY

Can governments contribute to the development of the shipbuilding industry without resorting to public procurement? In a North American context, can we gain market share on Asia, the dominant player in this field?

A report released by researchers at the National Defense University (Eisenhower school) in the spring of 2015 partially addresses these issues. [1] It concludes that they are competitiveness problems in the  U.S. industry against Asia. China, Japan and South Korea now occupy more than 80% of the market share of shipbuilding on the commercial segment contracts.

Analysis of the strengths, weaknesses, opportunities and threats (SWOT), [2], highlights the importance of the national defense budget to compensate for the weaknesses of U.S. industry in the commercial segment.

Currently, this industry survives almost exclusively  on public procurement, notably with the military sector. It represented 38.1 billion $ in 2014, and is expected to grow annually by 3.9% per year until 2019, or 46 billion $. Barely 15% of revenues of the U.S. industry are related to the export.

One of the flagships of the report recommendations is that,  in order to ensure predictability of revenues of the industry, a strategy of public long-term purchases is necessary, as what presumably has been done in Canada. [3] However, an approach which uses public procurement for economic development purposes may have some shortcomings: it makes governments abdicate the implementation of structural measures for commercial market development; it distorts the objectives of a public policy of national defense in favor of strictly economic ones and, ultimately, undermines the efforts of the industry to increase its productivity, which would make it more competitive commercial international markets.

We must recognize that government contracts are important to ensure and maintain shipbuilding industry’s development. But dependence on collateral in the long term, as … Lire la suite

MAY 2016 PPP TO THE RESCUE OF THE FINANCING OF PORT INFRASTRUCTURE

For several years public-private partnerships (PPP) have been used as an alternative to public financing of major infrastructure projects. They have been applied to several areas, notably health, transportation, technology, information and the environment. PPP are still very popular throughout the world, particularly in  developing countries.

PPP in the maritime sector are not as well documented as those in other sectors. However, several major port infrastructure projects were funded according to this embodiment. Their popularity can be explained in several ways. It is largely related to  movements of privatization and liberalization around the world. These movements began in the 1970s, until the 1990s and early 2000s. Parallel to this situation, the opening of the port authorities have given opportunities for private companies.

The level competition between port sites and large international carriers has created a need for more capacity of transport (Gigantism) and treatment of their goods. To satisfy these requirements, port authorities must increase their capacity so that  infrastructure projects in the maritime sector are more and more  intensive in capital.

However, this adaptation to new standards has become a critical source of competitiveness and this can be translated into economic gains, income and added value. The increase of investment needed to remain competitive.  There is therefore need to better  funding, while governments are not necessary willing to offer such funding.

So far, the private sector has shown itself able to assume these new mandates and generate the required financing. It has demonstrated that it could  meet the needs of the industry and is a valid solution to the problems of the public sector. The challenge remains to know if participation of private sector has become a necessity to ensure the competitiveness of the port sites.

What is a PPP?

A PPP is a contractual arrangement between public bodies … Lire la suite