Distributing the Gains from Waterfront Productivity Improvements

Abstract

Despite significant increases in waterfront productivity in recent years, waterfront users have complained that reductions in charges have been insufficient. This paper applies an indexing method that allows us to construct ‘what‐if’ scenarios where the contribution of productivity, price changes and changes in firm size to stevedore profitability can clearly be seen. We then calculate the distribution of the benefits of productivity improvements between customers, labour and shareholders. We find that the direct purchasers of stevedoring services have reaped gains from waterfront reform over the past five years, receiving around 67 per cent of the available ‘productivity dividend’ in the form of lower real stevedoring prices.

MEASURING THE ALLOCATION OF ESKOM'S PRODUCTIVITY DIVIDEND1

“…In this paper we apply the methodology of Lawrence et al. (2006) and Lawrence and Richards (2004) to determine the contributions of productivity and price changes to changes in Eskom's profitability over time. This enables the calculation of the distribution of the benefits of Eskom's productivity improvements – its “productivity dividend”– among the three key stakeholder groups: consumers, input suppliers (including employees) and Eskom's owners.…”