Determinants of Port Infrastructure Pricing* - Ajsl.info

<strong>Determinants</strong> <strong>of</strong> <strong>Port</strong> <strong>Infrastructure</strong> Pricingspecifications are used as proxies for port costs. Thus, the underlyingassumption is that port infrastructure building and maintenance costs arestrongly correlated with port physical specifications such as the depth, lengthand width <strong>of</strong> the access channel and berths. 19) Other variables are also coveredin the data analysis including port service demand.The analysis also takes into account the effect <strong>of</strong> various governancemodels, namely the service port, tool port, landlord port and privatized portmodels that are widely believed to govern the ways ports are managed. Thisis partly because the governance model reflects the level <strong>of</strong> port reformand especially the involvement <strong>of</strong> the private sector in port ownership andmanagement. The study also considers the effect <strong>of</strong> the legal structuresused by ports. The legal structure <strong>of</strong> a port reflects its specific view on andpreference on its corporate responsibility as a legal entity. 20) Four legalstructures adopted by seaports are covered in the analysis, including a publicport authority, a port corporation, limited company, and local government.Majority <strong>of</strong> ports are overseen by a public port authority and takes a form<strong>of</strong> landlord ports. In the absence <strong>of</strong> a port regulatory mechanism, the soleauthority over port investment, planning and financing and formulating andregulation <strong>of</strong> tariff regime is on a public port authority. 21) Yet, many portsconformed to the landlord or service model have the legal structure as publicport corporations or limited companies. Thus, given the similarity existingin port governance, the level <strong>of</strong> corporatization <strong>of</strong> port business can varydepending on the legal structure. In addition, the study also considers theeffect <strong>of</strong> the geographical location <strong>of</strong> the port. This is because, all else beingthe same, ports located in the same region tend to share similar businesspractices, culture and level <strong>of</strong> economic activities, which may affect thepricing regime.The following regression equation system is used in econometric analysis :lnTRF ci = α 0 +β 2 lnCHL i +β 3 lnCHW i +β 1 lnCHD i +β 4 lnPTP i +β 5 lnTF i+∑β 6k DPM ki +∑β 7j DPG ji +∑β 8l DPR li +β 9 lnTRF bi +ε ci (1)lnTRF bi = ϕ 0 +θ 2 lnBL i +θ 1 lnBD i +θ 3 lnPTP i +θ 4 lnTF i +∑θ 5k DPM ki +∑θ 6j DPG ji +∑θ 7l DPR li +θ 8 lnTRF ci +ε bi (2)19) Kent & Ashar(2001).20) Morris et al.(2005).21) Trujillo & Nombela(1999).193