Concession Agreements and Market Entry in the Container Terminal Industry

In this paper, we describe the capabilities and strategies required for obtaining a concession to operate a terminal in a seaport. The extent to which concession procedures create entry barriers and lower the contestability of the market is assessed. Recent studies and policy initiatives have stressed the importance of lowering economic, institutional, and locational entry barriers in seaports. Concession procedures have an effect on market entry. Tenders may lower entry barriers by ensuring transparency, restricting discrimination and exclusivity, and limiting concessions to certain periods. However, tender procedures may also introduce entry barriers in a number of ways, including the requirement of capabilities and track records to win a tender. This paper examines relevant empirical material of recently completed or intended concessions in major European ports to evaluate these issues.

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