The Government of Haiti’s privatization and modernization program targets some of Haiti’s principal public enterprises: power, telecommunications, flour milling, cement production, and airport and port facilities. Located in Port-au-Prince, the national port handles 70 percent of the country’s general cargo and is close to the Windward Passage-one of the busiest shipping lanes in the world. It provides Haiti with good access to the principal markets of Europe, Asia, and North, Central, and South America. With judicious capital investment and reorganized port operations, the port can generate more trade. And with some form of private sector involvement, the port’s operating efficiency, competitiveness, and economic and financial viability would improve. Serving as financial advisers, Nathan Associates economists and financial analysts helped plan this privatization for the Conseil de Modernisation des Entreprises Publiques (CMEP).
Phase I Strategy
In developing the preferred privatization strategy, we analyzed the physical infrastructure and management of port operations, the commercial trends and potential of the port, the development options and investment requirements, and port finances. We then evaluated alternative privatization approaches and identified a two-phase strategy. Phase I called for contracting out most operations at Port-au-Prince for a 3- to 5-year period. During this time a regulatory framework was to be prepared for the privatized port sector.
Phase II Strategy
In Phase II a long-term concession agreement was to be awarded to a private investor/operator with a mandate to expand and develop the port commercially. Phase II took into account the difficult legal and labor issues affecting port privatization, and set forth a program of termination benefits for labor likely to be made redundant by modernization. We also projected the financial returns to the port under privatization. These analyses and data figured prominently in an investment memorandum and other bidding documents directed to management contractors.