Port Authority – port related logistics park development highest and best use, financial and market feasibility analyses and development recommendations
Large tract of land adjacent to the port was being awarded to the port authority by the central government for the development of a logistics park. The feasibility of such a project was needed to be established, along with financing alternatives, if any, considering that the island country in question had experienced 16 quarters of economic contraction.
An existing development plan was created meeting the perceived needs of the commercial marketplace rather than the port centric one. Neither the government nor port had funds available for the development of the logistic park and the size of the precluded it from being developed in one phase.
A comprehensive analysis of the local commercial and industrial marketplace was undertaken to gauge demand and absorption for different types of space. An analysis of the maritime segment was also conducted to identify maritime uses and specialist port related facilities. Development phases based on potential demand, development costs and challenges (the area is in an earthquake zone and is reclaimed land, making construction of any facility expensive) were established.
Project was reworked to produce a more port centric logistics park to be built in pods of ten acres. National pension funds were interviewed for their potential interest in investing and financing such a project; the project was received with significant positive interest. A required connector between the port and the park was changed from a tunnel (due to the nature of the subsoil) to a bridge which would be financed through tolls.
THE NET RESULTS:
the potential attainment of an almost double digit return for the port authority on ‘market’ capital values for the land with no money invested by either the port or the central government through a combination of PPP joint ventures between port users, pension funds and the port authority.