Ports in the Storm - Lisbon Harbour - Essay Example

There is a great opportunity that can open up Portugal and its neighboring countries.

European markets will be the first beneficiaries of an improved Lisbon port. First, this is a great investment where European companies can drive their investments. After a certain duration, Lisbon Harbour will call companies to tender for services like offloading containers, uploading containers, and ship repairs. This will provide business to big and small companies improving the European economy. Secondly, besides providing business to companies, employment opportunities will increase, as individuals will operate cranes and other machines.

Thirdly, Improvements to Lisbon harbor will allow the bulkiest of the vessels to dock in it. According to the Economist magazine, “The bulkiest vessels can carry 14,000 twenty-foot containers that would require a train 85 km if transported by rail” (The Economist Newspaper, 2012). Big vessels enhance economies of scale since there is a considerable fall in the cost per container. The cost of industrial raw materials falls as the cost of transportation falls, this eventually causes the low cost of products. Fourthly, big ships do not stop in many destinations in Europe. This means that Lisbon harbour will open up a faster means of transportation of bulk materials fastening up the process of production. In addition, consumers and businesses will receive complete products in good time. This will attract prime shippers looking for value, speed, and reliability.

The first beneficiary of an improved Lisbon port is Portugal. This is because as the port expands, Portuguese industries will get cheap raw materials for their production. Heavy metal industries and those that depend on bulky materials that come from Asia will benefit greatly. In addition, the Southern part of Spain will grow because of this port. The growth will come about as goods from Lisbon port are transported via good roads that will carry containers from the southern part to other areas of Spain.

Lisbon harbor strategy is not sound. Since 1984, Portugal has adopted an intermediate public-private model, where the government owns water and land as private developers finance cranes, tugboats, and warehouses. This strategy works well in other countries. However, this is not the case for Portugal since the contracts given to private developers are not on competitive bases and thus have no big budget. After the expiry of the contract period, existing contractors look for an excuse to stay and they are allowed by the government. Increasing competition in the port contracts, encouraging more service providers, and considering selling the land lordship of the harbor are improvement strategies suggested for this port.