Case Studies: Port of Antwerp Deurganckdock Lock
|
200px Figure 1: Graphical representation of the new Deurganckdock lock | |
| Deurganckdock Lock, Antwerp, Belgium | |
|---|---|
| Project Type: | Both |
| Contract duration: | 20 Years (including Design & Construction) |
| Budget: | EUR 382.3M (The budget (nominal prices) includes Design & Construction, Financing Costs and Construction period operation expenses.) |
| Project Time Line | |
| Approval of construction and environmental permits: | 1Q 2010; |
| Creation of NV Vlaamse Havens: | 25 February 2011; |
| Creation of NV Deurganckdoksluis: | 4 July 2011; |
| Start of construction: | 24 November 2011 |
The development of the Left Bank of the Port of Antwerp dates back to the 1970s and started from the Waasland channel with the construction of the north and south docks. In the original plans, development of Waasland Port towards the Scheldt on the sea side was scheduled via the Baalhoek channel and the related Baalhoek lock. The Kallo Lock would thereby function only as a transit lock. The sea side access was never achieved and the Kallo Lock, operational since 1983, provides the only access to Waasland port. In 1998-1999, when the choice was made to develop the Deurganckdok, it was decided to erase the reservation area for the Baalhoek Channel from the regional development plan.
The Kallo Lock is heavily occupied: 8,800 movements (123m tonnes) per year. Waiting times amount to 3.5 hours. The Kallo Lock is 50% busier than the Berendrecht Lock, one of the most important locks in the Port of Antwerp. This is due to increasing sea traffic and an increased use of the lock by inland navigation. Dimension-wise (360m x 50m x 12,58m), the lock was never meant to function as access lock from the sea side. Regular maintenance increases as the lock gets older, and structural maintenance is also needed. Moreover, there is always the chance of a collision at the lock blocking the entire Waasland Port. In addition, the city centre of Kallo is near the lock, whereas an alternative access would be further away from residential areas.
With the new Deurganckdock lock, the Flemish government and Antwerp Municipal Port Authority wants to ensure better access to the docks. A lock allows ships to sail from the Scheldt with the tide into the port docks, where the water level is always high. The new lock is the second one in Waasland port. The new lock will be bigger than the current Kallo Lock and hence will allow Waasland Port’s potential to be used to the maximum. The new lock will not only be longer than Kallo Lock, but also deeper.
Because of growth in the activities of Waasland Port – including frequently used RoRo terminals as well as a new tank terminal – Kallo Lock is hitting capacity constraints. Shipping companies and shipping agents have been warning for several years that current waiting times have reached the limits of what is acceptable. A second lock on the Scheldt Left Bank offers the Port of Antwerp operational reliability when Kallo Lock is not accessible for shipping. During maintenance or repair works, ships can sail in and out of Waasland Port using the second lock.
Contents
The Contracting Authority (Public Party)
The construction of the Deurganckdok lock is one of the key projects of the Flemish government and one of the goals of Pact 2020. On 5 June 2009 the “Royal Decree of 8 May 2009” was published in the Belgian Law Gazette. This approved the creation of the new private law independent agency NV Vlaamse Havens and modified the decree of 2 March 1999 concerning seaports policy and management. NV Vlaamse Havens is responsible for co-ordinating and implementing the extension of maritime access routes to the port areas of Antwerp, Bruges-Zeebrugge and Ghent. It has subsidiary companies in each port entrusted with the construction and financing of new sea locks, which are subsequently handed over to the port authorities.
NV Vlaamse Havens has as one of its subsidiary companies NV Deurganckdoksluis. Antwerp Municipal Port Authority holds the majority stake in NV Deurganckdoksluis (74%), and NV Vlaamse Havens the remaining 26%.
The Concessionaire (Private Party)
NV Deurganckdoksluis will build and finance the second lock in the Waasland Port and grant it via a concession agreement for 20 years to the Antwerp Port Authority. The latter will be responsible for exploiting and maintaining the new sea lock. The contract for construction of the lock was awarded to the temporary commercial entity Waasland Lock, consisting of Jan De Nul nv, CEI De Meyer NV, Betonac NV, Herbosch-Kiere NV, Antwerpse Bouwwerken NV. On 14 September 2011, loans were agreed with EIB (EUR 160.5 M) and KBC (EUR 81.16 M). The remaining capital is to be provided by Antwerp Municipal Port Authority and the Flemish Government.
Users
The direct lock users are shipping companies and goods handlers in the docks behind the lock.
Other stakeholders/indirect users are: consumers; employees; local residents; Antwerp Municipal Port Authority (supplementary port dues income); Port authorities of other Flemish seaports (losses); Flemish government; and Federal government (via the income taxes on employees).
Key Purpose for PPP Model Selection
Construction and financing by NV Vlaamse Havens and its subsidiary NV Deurganckdoksluis has brought following advantages and opportunities in relation to traditional funding by the Flemish Government:
- extended payments, untaxed on value added;
- avoidance of having to consolidate investment costs in the Flemish Region accounts;
- limitation of risks (demand risk, construction risk, availability risk, including supplementary expenses linked to lock construction).
Moreover, through the creation of NV Deurganckdoksluis, all expenses and revenues related to the lock construction are separated out. This legal entity is responsible in a transparent way for optimising the extension of maritime access to the port areas, which offers the best guarantees for the coordination of the project and its quick execution. At the request of Antwerp Municipal Port Authority, the scenario of lock construction and financing by the port authority itself was also investigated.
The current model and the alternative of delegated construction management were compared, and trade-offs identified between their advantages and disadvantages. In both scenarios the port company bears all the risks. However construction and financing via NV Vlaamse Havens and its subsidiary NV Deurganckdoksluis delivered following advantages compared with execution by the port authority:
- alignment with the philosophy of the Port Decree by placing important aspects of the port policy such as building infrastructure at the level of the Flemish Region
- better guarantees of equal operational conditions for Flemish ports
- more transparency in terms of the financing of port infrastructure.
Project Timing
Notwithstanding the negative impact of the economic crisis, NV Vlaamse Havens was created by Royal Decree on 8 May 2009.
Project Locality and Market Geography
The lock is located in Waasland port on the Left Bank of the Port of Antwerp, in the Municipality of Beveren. The closest housing is at Kieldrecht, about 2,000m distance from the building site. To the southwest is located the living area of Verrebroek and to the southeast is located the living area of Kallo, at respective distances of 4,000 and 3,000m.
Procurement & Contractual Structure
Tendering
Various tender calls for construction work appeared in the Belgian Procurement Bulletin between 6 September 2010 and 13 March 2012. Six applications for the main works were submitted on 2 February 2011,with the contract awarded to THV Waaslandsluis.
Financing was negotiated separately with EIB and KBC.
Contract Structure
The annual concession fee to be paid to NV Deurganckdoksluis by Antwerp Municipal Port Authority will only be determined after construction has been completed, and will be based on the effective building and financing cost. The construction cost risk is therefore borne by the port authority.
A subsidy agreement has been drafted between Antwerp Municipal Port Authority and the Flemish Region, whereby the latter will allot an annual subsidy to the Port Authority during the 20 year concession period. Bank funding will be guaranteed for 51% by the Port Authority and 49% by the Flemish Region.
Investigation of the Antwerp Municipal Port Authority’s annual accounts for recent years shows that at least half of the cost will covered by revenues from sales (the so-called 50% criterion). As a consequence, the Port Authority is considered to be a market entity, and is classified in the sector of non-financial enterprises in the hands of the government.
Risk Allocation
Risks linked to the construction, maintenance and exploitation of the lock are allocated as depicted in the figure 2 below. Funders (EIB and KBC) get a guarantee for the outstanding amount of their loans. The port authority will take care of the exploitation and maintenance of the new sea lock and bears the risks.
Performance
The Flemish Region gives the Antwerp Municipal Port Authority a subsidy of EUR 18 M based on the use of the lock, linked to conditions related to the availability of the lock and the handling time.
The subsidy is conditional on two performance indicators:
- Availability of the lock for at least 95% of the time on an annual basis and 96.5% on a five-year basis;
- A handling time of no more than 8 minutes longer than the reference handling time
Figure 2: Risk allocation
References
- Flemish Knowledge Centre PPP, interview with Prof. Steven Van Garsse
- Verslag van de Vlaamse Regering van Alternatieve financiering van Vlaamse overheidsinvesteringen van 9 november 2012, Parl.St. Vl.Parl. 2012-13, nr. 1.
- Procurement Bulletin nr. 172 6 September 2010, Publication nr. 16957
- Procurement Bulletin nr. 227 26 November 2010, Publication nr. 24476
- Procurement Bulletin nr 261 7 October 2011, Publication nr. 522340
- Procurement Bulletin nr 298 15 November 2011, Publication nr. 526173
- Procurement Bulletin nr 64 13 March 2012, Publication nr. 505213
- www.bda-online.be
- www.delloyd.be
- www.deurganckdoksluis.be
- www.flanderslogistics.be
- www.lne.be
- www.maritiemetoegang.be
- www.ministerhildecrevits.be
- www.portofantwerp.com
