Peter de Langen: +31 (0) 6 11 76 88 77   Jordi Caballé: +34 629 546 150

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Forward plan to manage transitions

COMMENT: In Antwerp, the closure of the GM plant makes a huge site available for re-development, while in Rotterdam, one of the refineries (currently owned by Q8) is up for sale, writes Peter de Langen.
For the latter, one scenario is a buyer will transform the refinery into a terminal for bulk cargoes.
These cases from the two largest European ports show that both industrial and logistics facilities have a life-cycle. Similar closures of large scale sites in ports have occurred in Groningen, Teesside and Wilhemshafen, to name a few. These closures create re-development challenges for ports.
Compared with new greenfield developments, re-development at the end of the life cycle is more complicated. Outdated infrastructure or industrial sites often remain underused and/or derelict for long periods of time.
The creation of value for new types of users – and society at large – is often hampered by legal and institutional complexities. Questions are raised: such as who is responsible for soil pollution; and does the port authority have incentives to initiate re-development for non-port functions.
Port authorities may need to spend some time thinking through their approach to transitions in ports. Many ports host capital intensive industries based on fossil fuels. In some cases, port authorities may simply wait until plants close down, even if this involves a relatively long period of continued operations of fairly outdated plants.
In other cases, a more pro-active approach may be appropriate. Perhaps infrastructure investments are needed to create new development options? These generally have to be planned well in advance – certainly if government entities are expected to financially contribute. In other cases, co-siting may smooth the transition back to the beginning of the life cycle.
There may also be pricing issues involved: the port may have to secure a healthy return from mature activities to be able to create attractive offerings for activities at the beginning of their life-cycle.
For ports in mature economies, acknowledging the inevitability that some activities will close down sooner or later and developing scenarios on how to redevelop large sites currently occupied by mature industries may be worth the effort.