The impact of port privatization on the operational efficiency: A longitudinal study on Turkish ports

The aim of this research is to set forth the effects of privatization on operational efficiencies of ports. To this end, five ports which were privatized in 1997 have been considered and changes in efficiency levels during 14 years period examined comparatively. Input and output metrics to measure port efficiency were determined after a literature review. Data Envelopment Analysis (DEA) and Malmquist Productivity Index were used for analysis. Results show that during 14 years period following the privatization, only one port performed beyond the efficiency frontier while others did not. Thus, research results had revealed that privatization does not always result with an increase in port efficiency. Even though significant increases have been observed in trading volume of ports during post privatization period in terms of ship calls, cargo throughput, and total income, dramatic increases in total expenditures occurred simultaneously and this resulted with operational inefficiencies. Also, the possible effects of privatization model on the inefficiencies of ports were discussed and findings and results of the study were analyzed in detail.