Understanding the role of Foreign Direct Investment in port development
Private sector investment and involvement in developing ports emerged as a significant requirement in the 1980s. By this time, many ports had become bottlenecks to the efficient distribution chains of which they are an essential component. Government investments into port development was categorized as ‘White Elephant Syndrome’ due to the following three main problems, illustrated by port congestion and consequent chronic service failures, contributed to the gradual deterioration of service quality during this period.
The first reason for a lack of port service quality was the inability or unwillingness of many governments to invest in expensive port infrastructure or the ‘misinvestment’ in infrastructure (providing facilities that were badly matched with the needs of foreign trade and shipping). During this period, a number of beautifully constructed port complexes became ‘white elephants’