The offshore port should operate as a unique system into connection with other Adriatic ports
PWC (PricewaterhouseCoopers) is the world’s second largest professional services network, and is one of the advisors for the Offshore port. We asked some questions to Riccardo Maria Togni, Associate Partner of PwC and the project leader. He said that “the project is not conceived to operate on a «stand-alone» basis but would be put into connection with other Adriatic ports, in order to attract a «critical mass» of traffic and operate as a unique system”, this is one of the main opportunities of the offshore system; discover his opinion reading the interview.
Could you briefly explain, following your recent studies, which is the situation of European ports and logistic chains?
Nowadays the international shipping and logistics operators requires to ports and terminal operators to provide adequate port infrastructures (e.g. yards, berths, draught, etc), maritime and land accessibility, integration among transport operators (e.g. sea – rail), terminal equipment and port services (e.g. nautical services). These requirements are essential to be competitive with respect to other ports, maintain the market share and attract more traffic.
As concerns containerized goods, the shipping industry has exploited economies of scale, mainly to react to the increasing cost of bunker, and has been characterized by the increasing in fleet size and alliances among operators (like P3 and G6). These trends have increased the pressure on ports and maritime terminal operators to provide adequate levels of service for the container market, in term of:
- draught to accommodate large containerships, as well as areas for the storage of containers which often require long dwell time;
- road and rail accessibility with primary land infrastructures to move containers from/to destination under prompt and safety standards;
- integration between different transport modes to provide an all-in service (e.g. intermodal sea-rail services);
- proper IT platforms, in order to manage documentation related to load/unload handling.
Ports able to achieve the above requirements are experiencing increasing traffic (e.g. ports located in the Northern range), while ports with infrastructural and operating gaps are losing market shares because are not able to compete at international level.
Within this context, the Venice Offshore Onshore Terminal aims at turning into an opportunity the current infrastructural gaps of Venice related with limited draught of the lagoon. The Project has full nautical accessibility (8 miles off the coast, with a natural sea bed of at least 20 meters); wide onshore availability of handling and storage capacity (2.000 ha former industry-site of Marghera); efficient links to the rail/road at national and international level.
What are you studying and improving for the offshore port?
As financial advisors, we are in charge of studying how to realize the project under a public-private partnership (“PPP”) scheme. In particular, we are carrying out financial and economic analysis in order to evaluate the project feasibility, under different financial scenarios and PPP models.
We are using technical data and information provided by the project engineering consultancy as inputs for our financial models, in order to appraise the project bankability and profitability, for both private investors and the public administration.
Which is the goal you want to reach?
According to the above, our goal is to support the Venice Port Authority in identifying the most suitable project financing schemes. This is not just represented by the appraisal of the project bankability and profitability under different scenarios, but by the simultaneous evaluation of feasible actual options, available at current market conditions.
At the same time, since this project aims to be a public-private partnership, our goal is to properly advise the Venice Port Authority in order to attract private investors, being aware of the conditions at which they invest, but defending, at the same time, the public interest. In summary, we aim at finding a proper balance between public and private objectives.
In your opinion, which is the main strength of the offshore project?
In our view, the first strength is represented by the opportunity to give an alternative and shorter route to traffic from Asia to Europe via Suez, thanks to fewer navigation days diverting to Venice. The new infrastructure would be able to accommodate large containerships (up to 22,000 TEUs-ships), while none of the Nord Adriatic ports is currently equipped to accommodate large containerships and able to compete in the international market.
The second strength consists in the full exploitation of the current rail capacity and in the remediation of onshore brownfield areas. The availability of these elements, unused rail capacity and land, gives to the project considerable advantages. Finally, the project is not conceived to operate on a “stand-alone” basis but would be put into connection with other Adriatic ports, in order to attract a “critical mass” of traffic and operate as a unique system.
Do you think that the offshore system could be capitalized and transferable in other countries (in Italy or abroad)?
In our understanding, the offshore system may overcome problems related to limited draught of the existing ports and thus could be usefully applied to overcome other ports’ weaknesses worldwide.
In our opinion, however, Venice benefits from two main advantages which make the project more likely successful in that specific context.
On the one hand, the availability of an onshore area (about 90 hectares) is essential in order to serve the offshore system. Containers can lay there before being dispatched via rail or road, having the opportunity to be eventually stocked and refrigerated.
On the other hand, Venice benefits from unused rail capacity which could be thus fully exploited.
As a consequence, the offshore system cannot be considered as always applicable in order to solve limited draught problems in other national and international contexts. A number of conditions would need to be satisfied. Among them, the availability of proper onshore spaces and the existence of efficient rail/road connections with final markets.
Which is the role of “PPP” supporting the realization of infrastructures in Italy and worldwide?
Deliver project infrastructures and efficient public services is the aim of all governments, in order to promote the internal growth and meet demands and needs from a growing population.
In this respect, the PPP role for the public sector is double. On the one hand, it may provide financial resources, which are even more precious considering the impacts of the financial crisis and the current budget constraints.
On the other hand, governments could harness the expertise, know-how and efficiencies of the private sector.
If properly structured, PPP improves quality design, offers faster project completion and reduced delays, fulfills expected budget and ensures high quality standards through the entire length of the concession. If risks are properly allocated between actors involved, the public sector retains strategic control over the project and performance risks are transferred to the private sector.