Port operations in Portugal

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?

No specific approvals are required, as the right to operate a terminal is given by the concession contract. The concession contract allows the port operator to commence operations immediately following construction and normally allows up to two years for the construction, although the time limit will depend on the volume of construction.

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?

The port authority may provide to port operators the use of equipment, workers and facilities, and electricity and water supplies. It may also supply pilots, towage and moorage. According to law, the port authority has the obligation to supply waste services. These services are charged according to the regulations approved by each port authority. Some of these services may be supplied by private operators licensed by the port authority, and in this case the tariffs are established by the private operators.

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 relevant port authority does not give any commitments in relation to access to the hinterland (rail, road, etc). Those are obligations of the government. All the ports in Portugal have good access by road and rail, and a new rail link is under construction to link the ports of Lisbon, Setúbal and Sines more directly to the Spanish hinterland of Extremadura. Logistics terminals (dry ports) are also ready to serve all the ports, managed by either private operators or a government-owned company.

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

The port authorities oversee terminal operations through their inspection powers given by law and by the concession contracts. The port authority is responsible for the whole port management, even if it is operated by private operators.

In a major emergency, a port authority can suspend the activities of a private operator. However, Portuguese jurisdiction only allows for a public entity to suspend or terminate a contract or a licence, if cessation of activity is imminent or if a serious disturbance in the management of the terminal occurs that adversely affects the regularity of the operation.

A legal procedure must take place that allows the private operator to be heard and to present its case. The port authority can only maintain a suspension for a year, after which it has to resume the contract or licence, or terminate it.

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

The port authorities may access the port for inspection and the operator cannot deny or hamper this access under any circumstances. The port authority should liaise with the private operator in order to avoid any disturbance in the management of the terminal that could involve the responsibility of the authority.

The takeover of port operations can happen in two possible cases: default of the private operator or reasons of public interest. In the event of default, the authority can seize the concession (sequestro). The authority may take control over operations if a serious disturbance occurs. In this case the operator must pay the authority operating expenses if the value is higher than the operation revenues.

In the public interest situation, there are two possible scenarios: concession redemption (resgate) - in which case, the authority must communicate its intention one year in advance and can only take place if half of the contract period has passed - and termination (resolução), in which the authority may terminate the concession for specific reasons. In these cases, the operator has the right to fair compensation.

Finally, in the event of a major emergency the authority may take control of port operations. If this happens, the contract is suspended.

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

It is normal to establish a penalty system in the contract depending on the seriousness of various criteria.

Another available remedy is the concession seizure, referred to in question 34.

The port authorities can also terminate the contract in the event of non-fulfilment of the main obligations. In this case, the terminal will revert to the authority without any compensation and the authority can take over the terminal without needing the consent of the operator.

Finally, the operator is in any case subject to the general rules of civil liability and is responsible for all damages incurred.

In the case of a licensee, the authority can revoke the licence and apply a fine prohibiting the operator from working in the port for some years.

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?

After the concession terminates, the operator must transfer all the assets necessary to operate and maintain the terminal to the port authority, including those that it received at the beginning of the contract and those bought or built by the concessionaire. These assets shall revert free of charge and in good working condition, without any right to claim compensation or retention by the operator unless otherwise stated in the contract and apart from those whose acquisition was approved by the authority in the final years of the contract, that can revert only if agreed upon and paid.

Investments in replacement equipment or technological updates made by the operator during the last 10 years of the contract that the authority has expressly approved and agreed to reimburse are excluded from the above rule, normally being reverted with the right for just compensation. The price to be paid is established taking into consideration the value of the non-redeemed asset.

The concession contract can foresee the terms under which the reversion and transfer of assets will take place, as the law is only a subsidiary and the parties to the contract can overturn the general rule.