The various activities performed in the port context are linked to the activities in the activity structure of the port authority. Two examples to be discussed in this section are those of ‘maintenance and charging’ and
‘handling and renting’.
7.1.1 Charging and maintenance
Charging, or the fees the port authority incurs from all users for access to the port and the use of public resources, is a mandatory administration activity for a port authority. The charges are typically incurred for the use of fairways, on berthing and services at public quays and on cargo moved across public quays. Such charges are not to be considered taxation.
Instead, they should reflect the cost of use, i.e. a return for investments made and a contribution to ongoing maintenance costs. A port is allowed to set charges so that a limited dividend to investments is possible. The revenues of Aalesund, Karmsund and Grenland port authorities consist for a large part of charges. All the ports charge for the provision of services such as waste disposal. Although such services are not mandatory, they are considered as a basic part of charges levied on users.
Furthermore, many users (vessels) of Norwegian ports have no other exchanges with the port authority apart from paying charges. Port authorities may thus primarily be seen as administrative bodies carrying out their mandatory duties. The collection of charges does not imply substantive interaction with users, however. Norwegian port authorities’ involvement in performing activities upon cargoes is limited. Therefore in practice charging reflects interaction across actors, but the port authority is only a party in the interaction to the extent that chargeable investment and maintenance activities enable or constrain multi-actor exchange. The role of the port
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authority that derives from maintenance and charging is in other words dependent on what is subject to charges; most often investments that aid access for larger vessels.
The basis for calculating charges reflects the principles for port finance. As a result port revenues correspond to the related activities and affect further development. The variation in revenue and activity profiles for port authorities arises from features such as the frequency with which vessels call, size of vessels, etc. For example, activities generated within the Global Fish – Tsujino relationship underpin a certain revenue and activity profile for Aalesund Port Authority. Fees from incoming vessels are frequent but seasonal, generated from small and medium-sized fishing vessels that demand little from seaway entrances or quay facilities. As these vessels berths and land their catch at private quays, fees are incurred on use of fairways. This is fairly representative for the unloading of fish in general.
In the main season, the Global Fish – Tsujino relationship involves weekly calls by larger container vessels berthing at a public quay (the container terminal). Cargo to the container terminal arrives by land from Global Fish.
The terminal is operated by a private company, a tenant to Aalesund Port Authority. Revenues are generated from the use of fairways and rentals from the public quay. The port authority is able to redeploy revenue back to all or even specific users of the public quay.
Moreover, the flows of goods that are moved across quays in Karmsund Port District generate a revenue and activity profile that largely corresponds to that of the unloading of fish in Aalesund. Here, the port authority charges for the use of seaways as the quays are private. The important difference between Aalesund and Karmsund relates to the large volumes and the downstream industrial use of products that generate fairly frequent calls with large vessels in Karmsund.
Seaways and safety measures applying to the large vessels deployed for these flows are complex and costly. They require regular maintenance, routines and specific skills, let alone physical terminal and quay facilities adapted to the vessels and the associated flows. The vessels for Statoil Kårstø also require services such as tugboats, fire-fighting equipment and the capacity to handle large-scale accidents. The revenue generated from this kind of traffic gives the port authority good reason to engage in activities at a level and with demands for skills not required for other activities in the port district. For example, the port authority may engage with local college education and training in marine safety as a part of their activities.
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Hydro Aluminium’s use of Fjordline’s Newcastle service out of Karmsund ferry terminal in order to ship extrusions underpins a revenue and activity profile for the port authority similar to that of the Aalesund Port container terminal. The flow of extrusions goods represents a significant share of the cargo for the UK service. As Fjordline (with its two services) is the only user of the ferry terminal, threats to demand for extrusions represents a threat to the existence of the terminal. This is because approximately half of the activity of the tenant and operator of the ferry terminal would be affected.
The revenue and activity profile derived from Hydro extrusion activities is therefore interdependent with public quay and other transport facilities.
Furthermore, the revenue and activity profile of Karmsund Port District is similar to that of Aalesund, at least in terms of charging for the use of fairways. The connection to flows of a particular kind of input is less clear and uniform, however. Any attempt to classify flows in terms of industries such as gas or fish does not necessarily correspond to what revenue profile is generated and what activity profile can be underpinned. Karmsund Port Authority may thus engage in activities more loosely connected to the immediate use of fairways and quays. This allows for investing in equipment, skills and routines that may benefit users on a more general basis.
Grenland Port receives regular calls from many large vessels at private quays that generate a similar revenue and activity profile to some of the big flows in Karmsund Port. There is less of the variation caused by the many private quays in Aalesund and Karmsund. A pipeline for gas would directly affect revenue in terms of the frequency with which large vessels made calls. This is likely to impact on the port authority’s redeployment of funds and activities for further developing and maintaining seaways in parts of the port district. Some companies, such as Borealis and Hydro Polymers, generate a revenue and activity profile for the port authority through using Kystlink as a feeder that collects cargo for the DFDS operated public Brevik terminal.
7.1.2 Handling and renting
Handling refers to activities related to the loading and unloading of vessels.
Norwegian port authorities’ engagements with activities of this kind are limited. As a result, the activity links related to port operations are limited.
The three port authorities mostly relate indirectly to handling activities by renting out public quays to private companies and operators. This applies in particular to Aalesund and Karmsund ports. Only Grenland Port has a recent history of charging for handling in its capacity as a terminal operator.
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Indeed, only the latter is a port user, due to its capacity as an owner of vessels that berth at quays in the port district.
The main tenants and operators in Aalesund are Norcargo and Tyrholm and Farstad, and in Karmsund Norcargo and HSD. The companies operating from public quays in Karmsund Fishery Port are also long-term tenants.
DFDS is the main tenant of Grenland Port Authority as the operator of the Brevik terminal. The port authorities perform administrative and mandatory activities in relation to operators. This is in terms of monitoring that operators comply with the conditions for being awarded ‘operator responsibility’ status.
Until recently, Grenland Port Authority provided services upon cargoes to port users, in particular to Norske Skog Union as operator of the Voldsfjorden terminal. The revenue and activity profile generated from handling is challenging for the port authority. This is because it needs to be kept separate from other revenue and activity profiles, both to comply with principles for port finances and to avoid conflict with other operators of public and private quays. It is now necessary for Grenland Port to replace the volumes previously generated by Norske Skog Union in order to continue to provide services that cover the operating costs at Voldsfjorden.
In reality, this can only be achieved by attracting cargo operators from other public quays, i.e. tenants of Grenland Port. Hence, the activities and the related revenues of Grenland Port at Voldsfjorden are inter-connected with tenants’ activities and revenues. The issue is that a port authority may engage in performing activities, but it may not take advantage of its public status amongst (public or private competitors). Grenland Port Authority therefore in reality has to find another operator of the terminal and ensure that the activities do not conflict with the existing privately-operated terminals.
As part owner in Kystlink, Grenland port authority is both a provider and a user of its own services. The revenue and activity profile derived from this arrangement is potentially awkward, in particular as Kystlink has not been a financial success. This technically implies that losses incurred on Kystlink have to be covered by revenue generated from other flows. As with the situation at Voldsfjorden, the port authority cannot redeploy revenue generated from activities that may be in competition with Kystlink.
In the next section, the discussion moves to consider the resources that shape the three port authorities in question.
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