Privatization can be contentious and prolonged unless properly planned. Plans must allay concerns about monopolistic practices, take into account unique competitive environments, provide for successful transactions through sound financial models, and deter unnecessary regulation.
Ecuador’s National Modernization Commission retained Nathan Associates to develop a concession program for the Port of Manta, one of the world’s largest tuna ports and a potential competitor of Guayaquil, Ecuador’s main gateway port.
Our port specialists:
- Assessed the port’s competitive environment,
- Developed a concession strategy,
- Defined the role and organizational structure of the future port authority,
- Developed solicitation documents and a model concession agreement that provided for a fixed and variable payment scheme from the concessionaire to the port authority and a maximum tariff scheme set for certain durations in accordance with perceived monopolistic risks for certain cargo types,
- Determined that the port should be concessioned to a single operator and that any concessionaire would face fierce competition from other ports in Ecuador,
- Developed a financial analysis model for assessing the impact of changes in cargo projections and concession payments and for testing concessionaires’ assertions of financial risk during negotiations, and
- Assessed the potential competitiveness of cargo niches to ensure the program structure lets the market discourage anticompetitive behavior so the government does not resort to unnecessary regulation.