The future is at stake

23.12.2003

- Not without satisfaction can we look at the passing year - says Andrzej Kasprzak President of the Board of Directors at the Port of Gdansk Authority SA. This year has proved difficult to us and required tremendous amount of effort in each area of the port's activity, however, the majority of targets set for this year have been successfully achieved.

Which accomplishments have ranked among the most significant over the recent twelve months? The implementation of the budgeting and controlling system can be undoubtedly seen as a success. The least spectacular though it may seem, this is the most important achievement in terms of shaping the foundations for the purpose of the efficient and advanced operation of such a sizable business organism as the port. It was the first time that a coherent system had been applied which enabled the execution of the targeted income schedules, repairs and investment plans for the year 2003, without amendments.

There was no need for amendments as, owing to a properly structured plan, the financial condition of the Port has improved substantially. This was reflected in, among other factors, eliminating at the end of 2003 the costly loans in the current account and in reducing the global credit liabilities (as compared with 2002) by 1.3 million zlotys. Additionally, a considerable growth in assets has been reported in the current account, while the commercial liabilities dropped by 2.9 million zlotys. Importantly, a procedure was implemented at the Port of Gdansk, that aimed at the more efficient management of liabilities. Subsequently, the liabilities can be expected to decrease that will result in the rise of the ready cash in hand. The year 2003 saw a substantial growth in revenue from port charges. It is vital that such results were achieved notwithstanding the unfavourable exchange rate dollar/zloty. It is natural, therefore, that port charges recorded an increased share in the revenue structure of the Port of Gdansk Authority SA (from 35.3% in 2002 to 38.6% in 2003), similarly to the revenue from media (from 18.7% to 20.1%). On the other hand, a slight drop was reported in the revenue from lease (from 36.8% to 34%). The figures recorded in 2003 indicate unambiguously the expansion-oriented character of the financial policy pursued by the Port of Gdansk.

It is of vital importance, also in view of the future of the Port of Gdansk, that investments and refurbishments that had been postponed for a long time, were started in the inner port. This is not merely the performance of the statutory tasks assigned to the Port of Gdansk Authority SA, but also a part of the port development strategy where, so-called, inner port has a specific role to fulfil. The condition, however, for the successful fulfillment of such role is upgrading the inner port to the advanced cargo handling technologies, as well as providing conditions that will attract investors. Thus, it is necessary to start the modernisation work on this part of the Port, successive implementation of refurbishment work. This year such investments covered the upgrades on Westerplatte Quay and WOC II Quay, as well as yard hardening in the Port Free Zone area, provision of transformers and wiring network (Wislane Quay - Oliwskie Quay), supporting electricity supply at the Westerplatte Ferry Terminal, the replacement of water supply system (Gorniczy Basin - Obroncow Westerplatte Quay). The modernisation work has been done to OPP, Bytomskie, Wisloujscie and Rudowe Quays alongside a large number of the current repairs to roads, yards, railtracks and buildings and, additionally, the refurbishment work was started on the head office of the Port of Gdansk Authority SA. The total outlays on the investment, refurbishment and repairs amounted to 28 million zlotys (nearly 21 million zlotys on investments and 7.2 million zlotys on refurbishment and repairs).

The characteristic feature of the investment and modernisation process planning at the Port of Gdansk is assigning the priority rank to undertakings oriented towards cargo handling. The legitimacy of such political approach has been proved by the cargo handling volumes reported for the year 2003. It is the first time, in nearly 10 years, that the Port of Gdansk has exceeded the magic threshold of 20 million tonnes. According to the ship notification outlooks for the closing days of December - in the year 2003, Gdansk stevedores will have handled, at the quays owned by the Port solely, as much as 20.5 million tonnes of a wide range of cargoes. Thereby, the Port of Gdansk is to be numbered among an elite group of the leading Baltic ports that recorded a turnover of over 20 million (in the recent years these were such ports as Ventspils, Tallinn, Lubeck, St. Petersburg and Rostock).

The structure of cargoes in 2003 gives evidence, on the one hand, to the prevailing role of bulk cargo, while, on the other, to the consequence of the targeted universal character of the Port.

In 2003, at the Port of Gdansk, 9.5 million tonnes of liquid fuels were handled. The prevailing share here was taken by the handling of crude oil in transit that this year totaled 8 million tonnes. Also worth emphasizing is the efficient servicing by "Naftoport" of some of the largest tanker ships. "Front Chief" and "Famenne" are the 300-thousand tankers that called at Gdansk with the purpose of collecting, respectively, 168 thou. tonnes and 175 thou. tonnes of fuels (larger amounts are prevented by the depths of the Danish Straits), filling up the holds at the Jutland Peninsula with crude oil also loaded at the Port of Gdansk.

While the growth in the fuels handling volume rates at less than 4 million tonnes, the coal handling rates has maintained the last year's level i.e. ca. 6 million tonnes. It should be stressed, however, that the volume of 2 million tonnes has been exceeded when it comes to the general cargo handling, as this result displays the above-mentioned targeted universal character of the Port of Gdansk. This comes as an effect of not only certain revival of Polish export, but also builds on the efficient work of the marketing teams of both: Port of Gdansk Authority SA and Port of Gdansk Cargo Logistics Ltd. Worth adding is the fact that the consistent policy aimed at the port handling cargoes packed in units brought about the opening of two new services: container and ro-ro.

Such experience combined with, first and foremost, the analysis of the worldwide market proves right the legitimacy of the port development strategy adopted and designed with the purposes such as the expansion of container services. Thus, hardly can we overestimate the agreement with the privately-run British investing company on constructing the deepsea container terminal in the Northern Port. The terminal with the handling capacity of 500 thou. TEU as soon as in the opening stage of its development, and, its construction costs running at ca. USD 175 million. It is of great importance that over the recent days the project has been endorsed by the Minister of State Treasury (a consent to many-years' lease of land) that cleared the way to concluding the talks with the British partners.

The turn of the year not only provides the opportunity for making assessments of the passing year, but also allows for drawing prognosis for the coming one. Owing to the controlling and budgeting system, many aspects of the port's future are pre-designed which to a large extent eliminates the misleading ad hoc action. Therefore, the cargo handling volume for 2004 is expected to run at the level recorded for 2003. Additionally, it is anticipated that the Port's financial condition will undergo further improvement which should enable the intensified implementation of the investment and repairs programme. Year 2004 also entails starting the delivery of four projects being part of the Transport Sector Operation Programme with a total cost of over EUR 31 million. These include the upgrades on the Port Free Zone, extension to Westerplatte Terminal, upgrades on Przemyslowe Quay and the widening of the entrance to the port. The projects are eligible for EU's financial assistance of 75%, while the remaining proportion of costs is to be borne by the Port.

Year 2003 is a source of our satisfaction also due to the fact that, contrary to the incidents nationwide, at the Port of Gdansk we were able to avoid lay-offs and closures of companies. Port Gdansk Cargo Logistics Ltd managed to reverse the adverse trends, and hence, the majority of the business-defining indicators have improved. Certain difficulties (to different degrees), however, have been experienced by the technological companies. Yet, initiatives have been undertaken that may help overcome these limitations, and, also year 2004 will not see the staff employed at these companies face the drama of lay-outs. Moreover, new ventures are being embarked on at the Port, which offer opportunities for all those with enterprise and imagination.

Year 2003 created the bases for making an attempt with the justified optimistic attitude - despite the awareness of a tremendous effort facing the Port in 2004 - to accomplish the challenge since at stake here is the position of the Port for the next decades.