Port operations

Approval

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?

Given that port authorities have constructed most of the infrastructure in Croatian ports, it is difficult to make any general statements from the operators’ perspective. The principal prerequisite for commencing any operations in a newly built facility, regardless of who has constructed it, is the operation permit that is issued by the Ministry of Construction and Physical Planning. If the construction works are executed properly, the operation permit could be obtained within two months following the completion of the construction works.

Typical services

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?

In principle, Croatian port authorities, as landlord port authorities, cannot perform port activities themselves. They can engage directly only when a certain public service needs to be provided or there is no market interest for the appropriate concession.

The port operators therefore provide port services based on concession contracts executed with the port authorities. According to the legal definition, port activities include:

  • loading, unloading, operation, transhipment, transport and storage of goods and other materials;
  • berthing and de-berthing of ships, yachts, fishing and sport vessels, and floating objects;
  • operations of reception of vehicles, loading and unloading of vehicles from port surfaces;
  • loading and unloading of passengers; and
  • various commercial activities incidental to the aforementioned port activities (supply of ships, services to passengers, piloting, towing, agency, custom services, quality control, etc).
Access to hinterland

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?

The development of access routes and interconnections has so far been within the competence of the government, and operators have not been required to invest in hinterland connections. However, there are no legal obstacles to the consideration of that sort of arrangement.

Suspension

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

Port authorities monitor compliance by a concessionaire with the terms and conditions of the concession and Port Order Regulations. Additionally, terminal operations fall into the competence of other authorities, such as the harbourmaster’s office and state inspections (safety at work, environment). Those inspection authorities are entitled to order the immediate suspension of a dangerous or improper activity.

Port access and control

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

Generally, the port authorities may access the port area at any (reasonable) time, taking care not to disturb the port operator’s business operations unduly. The port authorities may take over only a minor segment of port operations, and only in exceptional cases. The port authorities are neither intended nor equipped to take over the operations of a certain terminal or entire port.

Failure to operate and maintain

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

The answer to this question depends on the contents of the concession agreement. Available remedies include contractual penalties, compensation for damages and, as an ultimate consequence, termination of the concession.

According to the Concessions Act (2017), prior to the conclusion or the entry into force of the concession contract, the concession grantor has a duty to collect, from the most advantageous tenderer or the applicant for the concession, the necessary guarantees or security of payment instruments for the concession fee and compensation of potential damages incurred owing to the non-fulfilment of obligations under the concession contract (debentures, bank guarantees, personal guarantees, bills of exchange, escrow account, etc), in accordance with the estimated concession value. Such guarantees need to be collected not only from new concessionaires, but also from existing ones.

Transferrable assets

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?

A distinction must be made between immovable and movable assets.

According to the current Maritime Demesne and Seaports Act, if a concessionaire has constructed any part of a port infrastructure or superstructure, that property would become (once the concession is terminated) an integral part of the maritime demesne. The concessionaire is free to remove and take away only those objects that are easily detachable or that can be removed without destroying or inflicting damage to the maritime demesne.

The rights and duties of the parties with regard to movable assets that the operator brought to the site (eg, the operator’s equipment) depend on how they regulated this issue in the concession agreement. As far as the legislative framework is concerned, there is no generally prescribed obligation of a port operator to transfer any of its movable assets to the port authority once the concession is terminated. A reasonable concession grantor would, however, make sure that the concession agreement properly addresses this issue, providing appropriate legal tools to allow the continuity of the port’s or terminal’s operation to industry best practices upon the expiry or termination of any current concession agreement.

The law does not provide for compensation for any immovable assets that were constructed by the operator and transferred to the port authority upon termination of the concession. An exception is the situation where the concession agreement is prematurely terminated in the national interest, determined by the Croatian parliament. Even in such a case, the amount of compensation could not exceed the value of the constructed object at the time of transfer, decreased for the depreciation.

Potential investors in port infrastructure see these provisions as rather restrictive. In practice, the problem is resolved by allowing long-term concessions, enabling full depreciation of the newly built objects. Notwithstanding this, a more flexible legal framework could attract more interest in new port projects, especially those involving the construction of new port infrastructure.