25.04.2017 //
Kari Martiala
Timo Porthan

Ports Will Be Adjusted for the Internal Market

The European Parliament Adopted the Port Services Regulation in December 2016.

The integration of European ports into the European Single Market has been in preparation for the past 15 years. The European Parliament rejected the first two proposals, but adopted the third in December 2016. Unlike the directives, The Port Services Regulation will be implemented as such, with no national implementation. The regulation will come into effect in about two years, through all of the services specified in the regulation, as well as the underlying contracts, will have long transition periods. 

“The new regulation does not concern the handling of goods or passenger services. This means that there will be no major changes to other port services, such as mooring services, for a long time, says Annaleena Mäkilä, Managing Director of the Finnish Port Association.

What type of changes are Finnish ports facing?

“With regard to Finland and the Port of Helsinki, the conversion of ports into limited liability companies was a more significant change than the regulation. It provided ports with the tools for business operations and development. 

“The regulation covers three areas: it provides a framework for port companies to organise their harbour operations, enables them to provide services of their own and requires their financial management to be transparent. 

“The transparency requirement has already been met in Finland with the implementation of the Limited Liability Companies Act. It is beneficial for us that the requirement now also concerns those European ports that are not administered as companies. The purpose of the regulation is to identify any streams of public funding targeted at ineffective harbour operations that distort competition. The regulation promotes healthy competition by excluding investments from the sphere of national, regional or municipal public funding.” 

Does the regulation concern all ports?

“It only concerns ports included in the Trans-European Transport Networks – that is, 16 harbours in Finland. Apart from Russia, the regulation covers the Baltic Sea basin area and all of the member states of the European Union. A great deal of public funds have been invested in harbour infrastructure in southern Europe, regardless of whether or not the harbours have clients or traffic. The framework of the Port Services Regulation will eliminate situations of this type.” 

What are the European Commission’s goals for the regulation?

“The ultimate goal is to make the port services’ market more open and efficient. The major ports in Central Europe have a monopolistic position and must be forced to open the services market. 

“There is good reason to ask whether the Finnish ports have this type of market at all. Do we have the kind of market buzz that would attract large numbers of new service providers? The Finnish ports are all very different from one another. The Port of Helsinki is a major, full-service port. The other ports are of various sizes; some of them typically have one major client, and we also have a large number of harbours operated by industrial companies that automatically fall outside the scope of the regulation. 

“With regard to port services, the regulation covers towing, mooring, refuelling and waste management. It does not include the handling of goods or passenger services. They will probably be incorporated later.” 

Will the new regulation limit harbour operations?

“Finland no longer has effective laws on ports, so the Port Service Regulation will lay the framework for harbour operations. The regulation is flexible and will provide harbour operators with practical tools for providing services in their respective areas. 

“A harbour operator may set minimum requirements for service providers with regard to professional qualifications, financial standing or around-the-clock operations, for example. The port company may also limit the number of service providers. There are ports that may only be able to accommodate one service provider in terms of space or market size.