Performance-Based Port Concession Extensions: A Pragmatic Framework for Renewal in Colombia and Beyond
In the latest installment of his For the Beauty of Logistics series, Dr. Paul E. Kent examines the approaching maturity of first-generation port concessions — and long-standing extensions — and poses a timely policy question:
Should high-performing concessions be automatically re-tendered, or can performance-based extensions better serve the public interest?
Drawing on decades of international concession experience, Dr. Kent analyzes the issue from both economic and institutional perspectives. The article explores:
- The transaction and opportunity costs associated with full re-tendering
- Late-cycle underinvestment linked to the well-known “hold-up” problem
- Transition risks, including operational and workforce disruption
- Comparative evidence from high-performing ports operating under continuity frameworks
Rather than advocating renewal over competition, the paper argues that re-tendering and extension are complementary instruments within the same regulatory toolkit. The appropriate choice, Dr. Kent suggests, should be grounded in case-specific economic analysis — not automatic rules.
Click here to read the full article (haga aquí para leer la versión en español).