1. The practical challenges behind a change of an organisational model -Manfred Reuter- Workshop in Piraeus 1 October 2012

2. Old Structure of Port Management -before 2005- The port was administrated by 3 departments of the administration of the City of Hamburg Landlord system, no port-operation business Around 450 tenants (operating port companies) Port is a district of the city, ca 10% of the city area In this area exists a public road system besides the port infrastructure

3. Old structure: Organisation….(1) Ministry of Economic Affairs Department „HW“: To deal with port issues of an economic or political nature/ Collect port fees and pilot consultion fees/ Habour Master Department „HT“ Planning, construction and maintenance of infrastructure and technical installations/ Sovereign duties in relation to the above

4. Old structure: Organisation….(2) Ministry of Finance, Department Real Estate Management Authority: Leasing of land and property/ Setting the rental charges (with input of the Ministry of Economic Affairs)

5. Old structure: Financing Governmental accounting All receipts (e.g. land- lease rents, harbour dues etc) flew in the budget of the city All expenditures for the running business (e.g. salaries of the employes) came out of the budget of the city All expenditures for the investments in the port area (port investments and investments for the public infrastructure as for motorways came from the budget of the city)

6. New construction (since 1.10.2005) No change: Landlord- system Company under Public Law (enterprise) = PA Shareholder 100 % FHH Double entry book keeping system 1.700 employes/ civil servants left the direct state organisation and became the staff of the company The company became the owner of more than 4.000 ha land- areas and more than 3.000 ha water-areas PA took over (by law) some Sovereign Tasks (e.g.Harbour Master)

7. Influence of the City (1) Management of the company is in charge for the running business City takes influence regularly be a Supervisory Board Supervisory board has to agree with the „Big Points“ as e.g.the annual budget, changes of rents structure, personnel affaires of core staff 9 members: City decides about 6 members (3 of them were business-experts, but no clients of the PA), employes elect 3 members /no members of the parlament

8. Influence of the City (2) City has the right of direct information City has direct influence to the management (by transparent, documented orders ) Legal control of the City about the sovereign acting of the company City decides about the Port Development Plan every 5 years, draft comes from the PA

9. Overview on the targets of the change (1) Application of commercial principles „working in the market“ From Governmental Bookkeeping System to Double Entry Bookkeeping System Cost- Benefit- Calculation The concentration of recources will mean that revenues and associated investments will be brought together The business plan can be altered during the year in response to changing market demands Central Buying Department

10. Overview on the targets of the change (2) Greater organisational efficiencies Controlled responsibility for business management High quality staff (experts) Customer- orientated bundeling of all port related tasks Control by company law (e.g. supervisory board)

11. Overview on the targets of the change (3) More Flexibility Fast demand- driven decisions are possible Financing of projects in part devisions (e.g. quay walls) are independend from the state budget (no dependence on long- term budgetary planning of the City)

12. Challenges…..(1) Acceptance of the change to a new philosophy (from administration to a more commercial approach) by the public, politics, the cicil servants and the private port companies Definition of targets in the long and short run Reasonable and fair balance of power between politics, administration of the ministries and the management of the company Legal form of the company

13. Challenges….(2) Transfer of some sovereign rights by law to the PA (e.g. function of the Harbour Master) Transfer of the port areas to the PA (whether and how ?) (entrepreneurial task for the PA) Transfer of the public employees to the PA (garantee for existing rights,no goodies/ city garantied the existing rights of old -age pensions, PA the future rights) Internal organisation of the company

14. Challenges….(3) Economic consequences (Plan Balance Sheet/ Plan Profit and Loss Account) in the short and long run (Economic Model) Implementation of the Double-Entry Bookkeeping Influence to Budget Items of the City Budget Tax consequences Implementation of IT- Software (SAP)

15. Challenges….(4) E.t.c………

16. Economic Model Plan Profit and Loss Account / Plan Balance Sheet for now and the following years On the basis of the actual draft of construction of the company Included the actual numbers and the prognose of the development (e.g. the result of an inventory, the costs, profits, investments, interests, taxes, state aids for General Infrastructure) Produced by an auditor, brought up to the date twice

17. Need of Time (1) First thought sommer 2001/ Implementation of the Company Oktober 2005 Autumn 2001 elections, new government Start of the work ( Check of „ Whether and How“) sommer 2002 Tender procedure for an auditor for the Economic Model and internal discussions autumn 2002

18. Need of Time (2) Working up the Big Points till the end of 2004 Economic Model First Draft finished 31.July 2003 „on the basis of the existing dates and figures“ Economic Model Second Draft finished 11/2003- 2/2004 „on the basis of the existing dates and figures“ Economic Model Third Draft 12/ 2004- 2/2005 „on the basis of the existing dates and figures“

19. Need of Time (3) Implementation of the Double – Entry Bookkeeping system (including IT- software) 2/2005 – 9/2005 Political Decissions of Senat and Parliament spring/summer 2005 Start: October 1, 2005 …..and we had no problems with the auditors in the end of the year