Port operations in Venezuela

Port operations

What government approvals are required in your jurisdiction for a port operator to commence operations following construction? How long does it typically take to obtain approvals?

According to article 31 of the LPPICR, the concessionaire is obliged to conclude the works and put them into service on the dates and terms indicated in the general conditions of the tender and the contract. The same provision states that the regulations (not enacted so far) or the general conditions should prescribe the procedure for commencement of operations. If no authorisation is received, the grantor must justify it, indicating any objections that exist regarding the projected work and the executed work. A timeframe will also be set for the concessionaire to correct the deficiencies, without prejudice to the sanctions for the delay not imputable to the grantor. Again, in the absence of GLP regulations there is no express procedure as to the approvals needed, and for this reason commencement of operations is an aspect that should be clearly stated in the concession contract if possible.

In any case, the GLP requires port operators to perform services within the public ports under the control of Bolipuertos, SA. They should be registered there as per internal regulations.

What services does a port operator and what services does the port authority typically provide in your jurisdiction? Do the port authorities typically charge the port operator for any services?

Owing to the variety of ports, it is difficult to easily describe the services vested with the port authority and the port operator, as such services vary in accordance with the category of the specific port. To properly answer this question, a review of some concepts is required.

Under domestic legislation the ‘port operator’ is defined as the public or private company performing services to the merchandise (article 78 GLP). It follows that by strict interpretation of law the port operator is that which is rendering stevedoring, storage and warehousing services. However, article 79 of the GLP defines the ‘terminal operator’ as the port operator that has direct control over an open area or specialised installation within the port area, by means of a contract entered into with the port administrator.

Nevertheless, it is fair to say that in colloquial language any company rendering services within the port area is named port operator. Besides, it has been already mentioned that in Venezuela the only port authority is the INEA, acting as a regulatory and not an operational entity, leaving aside the pilotage, towage and launch services provided by the former, although as aquatic rather than port services. In any case, the INEA does not charge the port operator for any services.

On the contrary, under domestic legislation the port administrator controls the management and operations of the port or terminal, although in practice some of them do not perform services, leaving them to port operators who may then pay some charges to the port administrator. Having said this, article 74 of the GLP contains a list of port services, among them:

• berthing;
• mooring;
• stevedoring;
• cargo handling within port area, including storage and warehousing;
• stuffing and stripping of containers;
• renting of cargo handling equipment;
• scale; and
• services of a similar nature.

Does the government or relevant port authority typically give any commitments in relation to access to the hinterland? To what extent does it require the operator to finance development of access routes or interconnections?

Access to the hinterland should be discussed as a result of a proposal submitted to the relevant body, or the general conditions governing the tender procedure. Consequently, the operator might be required to finance the development of access routes or interconnections if these are needed.

How do port authorities in your jurisdiction oversee terminal operations and in what circumstances may a port authority require the operator to suspend them?

As per article 24(10) of the GLP, the INEA has the power to supervise the activities of the concessionaire, which in most cases will include the terminal operations. This can be done through the Port Management unit of the INEA, or the port captaincy of the jurisdiction where the port or terminal is located. The GLP does not contain specific sanctions for port operators, but it might be expected that such sanctions, including a suspension, should be prescribed by the concession contract.

In what circumstances may the port authorities in your jurisdiction access the port area or take over port operations?

As per article 36 of the LPPICR, certain obligations are imposed upon the concessionaire, in particular those related to the rendering of uninterrupted services under the conditions prescribed by the contract. Unless exceptional situations of force majeure occur, the port activity is regarded as a public service. In line with the former, the INEA has the powers to access the port; whereas the grantor has the right to supervise and if necessary intervene in the concession and take over port operations, pursuant to article 51 of the LPPICR.

What remedies are available to the port authority or government against a port operator that fails to operate and maintain the port as agreed?

According to article 51 of the LPPICR, if the concessionaire abandons the works, interrupts the services or is involved in conduct regarded as a gross breach of its obligations under the contract or that is unlawful, then the grantor will appoint a controller in order to avoid the paralysis of the works or services.

In doing so, the grantor will open a procedure to notify the concessionaire, to determine the alleged breaches and to take the necessary measures or decisions. The controller will remain in office until the concessionaire resumes its functions or the concession is granted again according to the law. In any event, if the concessionaire does not resume its functions after 90 days following the appointment of the controller, there will be a gross breach of the contract, giving rise to its extinction pursuant to article 50.

What assets must port operators transfer to the relevant port authority on termination of a concession? Must port authorities pay any compensation for transferred assets?

According to article 38 of the GLP, all the assets affected by the concession will revert to the republic without compensation on termination of the contract. This provision must be expressly included in the contract. Nevertheless, article 48 of the LPPICR states that the contract will establish the term or duration of the concession, the investment to be made and the assets that, being affected by the contract, will revert to the grantor, if they are not amortised during the term. The contract should also identify the works or installations to be effected by the concessionaire that are not subject to reversion, which, if considered to be of public interest, may revert to the grantor, subject to compensation.