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Symphony Moderna in Port of Tokyo by ykanazawa1999, on Flickr


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Tokyo port finds its hands are still tied
9 July 2009
Lloyd's List

PORT of Tokyo was under the direct control of the municipal government up to April this year. This led to an inability to react to market conditions. Terminal leasing prices were determined by law with no negotiation entertained.

Construction, renovation and general maintenance could be undertaken only by permission of the local government. As such, Japan’s busiest container port was naturally at a severe disadvantage compared to the more nimble competition in South Korea and China.

After April 2008 the port was awarded what can only be described as a semi-private status with the establishment of the Tokyo Port Terminal Corp. Still owned by the government, it has been given the freedom to make competitive decisions such as pricing of terminal leases and expansion or modification of its premises. But there was a catch.

Yoshikatsu Ooishi, director of the Tokyo metropolitan government’s port promotion section, explained: “Under the new regime the holding company is now responsible for 50% of the port’s tax burden.”

An additional challenge has been fundraising. “In the past the Tokyo government acted as guarantor and we were able to access funds at preferential rates,” said Mr Ooishi. “Now raising funds is considerably more difficult. It has created a bottleneck in our plans for the future of the port.”

Having discarded the dead hand of government on a daily basis and paying the price through tax or more difficulty in raising much-needed funds, the port finds its hands are still tied when it comes to its bravest ambitions.

Such is the massive population of Tokyo, at 40 million, that the hinterland has long since merged into one. Yet Tokyo port finds itself still competing with Yokohama just 20 km down the coast. More absurdly Kawasaki port sits in between its two larger neighbours. Although Kawasaki is better known for its handling of general cargo, effectively the three ports are fighting over more than 7m teu annually.

Mr Ooishi laments the fact that Tokyo port has dropped out of the top 20 container ports of the world. “If we could combine our strength with the port of Yokohama we would have a combined throughput of more than 7.5m teu and register number 15 in the world’s busiest ports,” he said.

Sadly all parties agree that a merger would be the most sensible thing to do commercially but this would be difficult at the working level as municipal laws in Tokyo and Yokohama would have to be revised.

But small steps have been achieved in raising the two ports’ competitiveness. Since November 2008, barge traffic between the ports has been free. And since February 2009, ships that call at Yokohama port can also call at Tokyo port at no extra charge.
 
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