Port ownership and governance models in Finland: Development needs & future challenges

Jussi Rönty, Marko Nokkala, Kaisa Finnilä

Research output: Book/ReportReport

Abstract

Ports are an important part of municipalities' infrastructure networks. Their ownership and governance models in Finland range from traditional municipal departments to enterprise and company structures and to private-sector owned ports. There are external pressures to move ports to company model from other municipality ownership models in the coming years. At the same time potential to more elaborated landlord model could be explored as municipalities need steady revenues from ports without necessary being involved in any operative work. Financial analysis reveal that ports are at present a good revenue source for municipalities, and that specialized ports are in general producing better results than those with several types of cargo and/or passenger transport. Ports tend to finance a bulk of their investment from cash flow, in some cases without compromising the owners need to receive a fixed amount of return in any given year. The ownership and governance model does not seem to contribute decisively to financial performance, which makes it more challenging for municipalities to change their current business model. The physical number of ports should be determined by the market. However, for many municipalities the port and its economic impacts are significant and it is unlikely that a municipality would close its port even in the current economic downturn. For the competitiveness of a port the supporting basic infrastructure is the key to ensure that it will be able to compete with other ports and even alternative modes of transport.
Original languageEnglish
Place of PublicationEspoo
PublisherVTT Technical Research Centre of Finland
Number of pages105
ISBN (Electronic)978-951-38-7506-0
Publication statusPublished - 2011
MoE publication typeNot Eligible

Publication series

SeriesVTT Working Papers
Number164

Keywords

  • ports
  • municipal technical networks
  • financial analysis
  • ownership and governance models

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    Rönty, J., Nokkala, M., & Finnilä, K. (2011). Port ownership and governance models in Finland: Development needs & future challenges. VTT Technical Research Centre of Finland. VTT Working Papers, No. 164 http://www.vtt.fi/inf/pdf/workingpapers/2011/W164.pdf