Case Studies in Private Sector Participation: Franchise Shipping
Private companies operate on a competitive basis to provide transport services throughout the Pacific. These two case studies focus on Papua New Guinea and Solomon Islands.
The experience with contracted shipping services in the Pacific has demonstrated the value of introducing scheduled shipping services at affordable rates, replacing infrequent and unpredictable services offered at higher rates by ad hoc charter services. In Papua New Guinea (PNG), the experience also illustrates the value of investing in supporting infrastructure, such as small jetties and ramps.
In PNG and Solomon Islands, franchise shipping has positively impacted the ability of people to plan projects, open markets, confidently increase local production, and raise their standards of living, with better access to imported goods, materials, and services. Contracting the services to private operators, rather than running them through a state-owned enterprise or department, has been a cost-effective decision for the governments of both countries.