Court rules Port of Rotterdam Authority acted fairly over Maasvlakte ll concessions

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Rotterdam’s Rechtbank Court today ruled that the Port of Rotterdam Authority does not need to pay damages to its largest container stevedore ECT.

The stevedore firm had sued the municipal port authority over the award of concession agreements to Rotterdam World Gateway and APM Terminals for new box facilities on the reclaimed Maasvlakte II area.

Hutchison-owned ECT had claimed €1bn in estimated losses, but the court decided that the port authority did not misuse its economic power to facilitate new players in the containers market.

A statement from the district court said:

Following the verdict, the port authority said “The Port of Rotterdam Authority has always acted correctly and treated the various terminal operators equally. We have always regretted that this issue led to legal proceedings.

“Now that this clear ruling has been issued, we hope to be able to bring this matter quickly to a close and, together with ECT and the other stakeholders, to devote our energies to strengthening Rotterdam’s competitive position.”

However ECT indicated it would consider further steps, which include taking the matter to a higher court. It added that it had started legal procedures as a result of “betrayed confidence, promises made, points of view altered and rules in common practice changed”.

It said: “Since 2009, ECT has asked to settle these matters. It only went to court the moment talks did not come to a satisfactory solution.”

ECT claimed the new Maasvlakte II terminals would bring 50% overcapacity in container handling operations to the port, potentially leading to a collapse in handling rates and big economic and social problems on the existing Maasvlakte area.

Many in the port contest that, however, especially given the current congestion that is gripping box operations and has led to a series of container vessel calls being diverted to nearby competitor Antwerp. And the court judged that it was “inevitable that there would be temporary overcapacity”.

A statement from the court said: “With its policy, the port authority served the interests of the more long-term development of the port of Rotterdam. Furthermore, it took measures to limit the negative consequences of this overcapacity.”

ECT operates terminals in the port close to the city centre, on the existing Maasvlakte site and very near to Maasvlakte II, where the ECT Euromax terminal is situated.  The estimated container handling on that terminal will be 2.5m teu in 2015. Rotterdam World Gateway is expected to offer 2.4m teu capacity a year and APM Terminals 2.7m teu, with the latter scheduled to open before the end of the year.

ECT has been the dominant player in Rotterdam’s container market since its inception in the mid-1960s, and relied on considerable support of Rotterdam Municipal Port Authority, as it was previously known.  The authority facilitated the construction of ECT terminals, as well as the Delta/SeaLand Terminal, which was subsequently taken over by APM Terminals following Maersk’s acquisition of the SeaLand, and is today known as the Delta Dedicated North Terminal.

In its court submission, ECT also claimed that it was discriminated against operating the new terminals on the basis that that one of the criteria on which operators were selected was “competitiveness”, and was given just 15 out of the 100 points that bidders were able to score.

“Given the importance of this criterion, it was not encouraging to hear HbR [Port of Rotterdam Authority] express the opinion that the number of points that ECT could expect to earn for competitiveness would be “close to zero”. When asked about the motivation for this expectation, no definitive answers were given, but it appeared that the primary concern of HbR is that the port of Rotterdam’s overall competitiveness cannot be guaranteed unless the winner of the tender for T1 engages in direct intra-port competition with ECT,” the company’s legal team argued.

However, the court found no evidence of this.

Its statement added: “ECT was not denied a fair chance in the tendering procedure. The court found no evidence that the port authority had made any firm commitments to ECT which it failed to honour. The terms and conditions of the agreements which the port authority made with ECT are no less favourable than those made with its rivals.”

However, a small measure of support for ECT’s position came from an unlikely quarter today when the International Transport Workers Federation (ITF) warned that new capacity in the port should not be rushed into operation if it led to job losses, and called for a wider social dialogue.

ITF president and dockers’ section chair Paddy Crumlin explained: “This decision should not be taken as a green light to expansion without dialogue. There is a clear need for discussion around a phased implementation of Maasvlakte 2. That must include a dialogue involving all stakeholders, including the representative workers’ union, FNV Havens, and it must cover areas such as job creation, job stability and sustainability.

“Without that process, the future of one of the world’s busiest and most successful ports – and one with a record of good labour relations – will be put at risk.”