2.4. Port Management System

2.4.6 Financing of Port Management Bodies

Most port management bodies form bureaus of local governments. The general accounts of the local public entity budget for major port construction projects, and the special port development budgets include items for the management, operation, and construction of functional facilities.

Both of these budgets are based on cash accounting, not accrual (corporate accounting). The underlying idea of this practice is that the goal of port management and operations is for ports to serve as public establishments available (offering services) to the public, not to turn a profit.

Port management bodies assess such fees as port dues and fees for use of port facilities (including quay wall usage fees and cargo handling equipment usage fees). These fees are determined on a cost accounting basis and set forth by port management bodies through regulations. Unlike the tonnage tax and the special tonnage tax, port dues are levied on all vessels in exchange for the use of the port as a whole; the port management body levies these dues in accordance with enacted regulations. Port dues may be calculated and assessed based on the expenses necessary for managing the water area facilities (excluding anchorages), outlying facilities and environmental development facilities for which it is difficult to recoup the expenses incurred for offering services from fees. Note that port dues are those fees authorized by the government (the Minister of Land, Infrastructure and Transport) for specially designated major ports.

To promote the use of ports and harbors, some port management bodies offer incentive systems whereby fees for use of port facilities and port dues are reduced.