3 August 2022: The Ports Authority of Tonga (PAT) has signed a public- private partnership (PPP) contract for stevedoring services at the Port of Nuku’alofa, designed to improve operational efficiencies and reduce turnaround times for port users.
PAT signed the 10-year stevedoring concession contract with Tongan-owned and operated firm Royco Port Services Limited after a competitive tender process involving four bidders.
Royco will assume stevedoring services at the Port of Nuku’alofa from 1 October 2022.
Under the PPP contract, Royco will take on stevedoring services at the port, including marshalling; cargo storage; unpacking and packing of containers; and container washing and repair.
The firm will also be responsible for procurement and operation of all stevedoring equipment and meeting important standards on operational speed and productivity.
“The consolidation of stevedoring services with one provider will increase efficiency and help to build a professional stevedore sector,” PAT chief executive officer ‘Alo ki Hakau Maileseni said. “This PPP will also strengthen the stevedore’s negotiating position with shipping lines, helping to protect port users from escalating fees”.
PAT will cease all cargo handling activities under the PPP and focus on functions including dredging, towage, navigation assistance, and port utility and security provision, joining other regional and international ports in transitioning to a landlord role.
Improving international cargo handling efficiency
The PPP forms part of the Government of Tonga’s efforts to improve international cargo handling efficiency at the Port of Nuku’alofa and ensure port operations meet international standards, aid long- term economic growth, and optimize connectivity and cost effectiveness.
The Government of Tonga’s national development strategy outlines the importance of closer, more effective PPPs with business, consumers, and other Tongan community groups.
The Asian Development Bank’s (ADB) Pacific Private Sector Development Initiative (PSDI) has from 2019 provided technical assistance on the PPP. PSDI previously supported PAT to develop a performance improvement strategy, with an emphasis on mobilizing private sector capital and expertise.
PSDI is an ADB technical assistance program undertaken in partnership with the governments of Australia and New Zealand. PSDI supports ADB's 14 Pacific DMCs to improve the enabling environment for business and to achieve inclusive, private sector-led economic growth.
“PSDI is a regional leader in supporting and advising governments on PPPs,” PSDI State-Owned
Enterprise Reform and PPP Specialist Laure Darcy said. “PSDI is pleased to assist PAT with this important development opportunity and drive improved outcomes at the Port of Nuku’alofa.”