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is, public or private, landlord only, full or part-service provider, including terminal facilities within
ports
Various conditions will determine and even complicate the form of ownership of port facilities and
the kind of services that will be provided. Leasing the land upon which the port is located will be
the best option compared to owning it. Some country will not allow full ownership and will require
a local partner to own majority of the land as well as the improvements (usually 60%). How the
arrangement will end up will determine the total investment required for the port terminal as well
as how it will be operated. For those who have local partners already engaged in some aspects of
the operations, one might provide auxiliary or support services that will reduce one's level of
investment.
5. Appreciating the use of Free Port/Free Trade Zones as an economics tool
Countries have gained the benefits of opening up Free Ports and Free Trade Zones to allow
foreign investors to establish operations in regions where labor and raw materials are cheap and
readily available. This has allowed port operators to take advantage of such ports and zones
while enjoying the tax relief afforded them as well as their manufacturing partners. Commonly,
these zones, however, have a short or limited life expectancy as many companies that use up
their tax-holiday contract period move to other regions or eventually pay required customs, thus,
losing their advantage over their competitors. A long-term view of entering into such an
arrangement is needed to assure that port facilities will have a long duration of operation and
continuing profitability.
Ever since Gulftainer Company Limited started its port facilities in Sharjah, UAE, in 1976, with
Ramesh Shivakumaran, Group Director Business Services - it has grown into a well-oiled and
strong company that can deliver services according to the specifications of its clients. With 8
terminals now in Saudi Arabia, it prides itself of its accomplishments which it has achieved
through applying these and other primary principles in port management.