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Recouping the benefits of government aid for seaports


Publication number: 2015-09
Authors: C. Koopmans, T. Smits, B. Ubbels & J. van der Voort
Commissioned by: Ministry of Infrastructure and the Environment, Director of Maritime Affairs
Published by: SEO Amsterdam Economics
ISBN:
978-90-6733-794-6

Government aid for seaports in the Netherlands leads to lower port charges and higher port revenues. This has positive spill-over effects to other sectors. Within the first five years, thirty to fifty percent of the aid flows back to the state through increased tax revenues and a drop in benefit payments.

Four scenarios were calculated, with the aid ranging from €50 million a year to €300 million a year. It was assumed that the rates of port authorities and port service providers will decrease in proportion to the aid. Lower rates will lead to higher transport volumes and to additional demand for goods from other sectors (suppliers).

The additional jobs that are thus created will not only result in less unemployment, but also in a shift of workers from other jobs, causing a decline in production in those areas. For aid totalling €100 million, the net employment effect is 347 to 714 jobs. The added value (GDP) of the Dutch economy increases overall by €31 million to €64 million.

In addition to increased activity at ports and suppliers, there can also be effects on customers of transport via the ports. In general, the share of port dues in the total production costs of these customers is expected to be small in the case of containers. It should not be assumed that the production at these customers will increase in proportion to the port's turnover. Consequently, the impact on customers will probably be considerably smaller than the effects on suppliers.


Category: 2015, Carl Koopmans, Tom Smits