Port Development in Latin America: Time to Refocus the Strategy
For Ricardo Sánchez from ECLAC, it was time to face the challenges of the near future
According to Mundo Marítimo report on the last 4th Latin America Port Expansion in Santiago, Chile, Peru is launching with many projects and maybe we need to rethink it, more or better coordination is needed. Colombia, the same, projects that come in, that come out; others who stop for various issues and are going to be needed. In Argentina is about to launch the rebidding of the terminals of Buenos Aires in conditions that need to be discussedone of the recurrent issues aimed at the time living in the port industry, in which development strategies that recently were occupied must be renewed in the light of the new challenges facing the sector.
Ricardo Sánchez, expert on port infrastructure of ECLAC, stressed the importance of this aspect: “Port development in Latin America is very varied but is scarce, even in countries that have worked better. Peru is launching with many projects and maybe we need to rethink it, more or better coordination is needed. Colombia, the same, projects that come in, that come out; others who stop for various issues and are going to be needed. In Argentina is about to launch the rebidding of the terminals of Buenos “We have to think in a different port development and especially in connection with the territory of much higher quality, since the internal costs of the countries are currently very high and then are how we take care of that?”Aires in conditions that need to be discussed. And the discussion of these projects is precisely what emphasizes as indispensable Ricardo Sanchez: “That is what we need for the future or will we continue to repeat what was always done?”. At that point it clarifies: “What I say is that the port development needed for the future is not the one we met in the last 20 years, it is much bigger.” In that sense, Sanchez deeply on the keys of this change of scenery: “before we are dedicated to saving, retrieving public ports. That is already made, what we need is to adapt to whatever comes… 2,000 million people joining the ability to consume goods that we produce in Latin America: fruit, fish, meat, quality beads, that did not exist 20 years ago. By 2025 to 2030 will give this process and that means it can we stay short”, stands out.
“We have to think in a different port development and especially in connection with the territory of much higher quality, since the internal costs of the countries are currently very high and then are how we take care of that?”, ask Sanchez.
Reengineering or policy?
According ECLAC expert, prospects depend on policy, but it does not look just as a matter of Government, “but that related States and that includes private sector which is the key. “Governments change, but States remain and should help to plan, propose”, mentions. On the other hand, indicated that “of course are key physical, reengineering the question and logical. Today the port is the highest point, it is what is best. What is wrong in many cases is your inside connection”.
Doubts about demand for the Grand Scale Port in Chile
The doubts in relation to the need for the construction of a work of this nature, were expressed by Mundo Marítimo chief consultant, Karl-Heinz Ruzsitska, who said he has not seen yet an explanation concerning what will happen, once built the Exterior Port with regional ports or the same terminals established in Valparaiso and San Antonio. “They are going to leave or what they are going to do?”, is interrogated considering the great number of TEUs which would mobilize a structure like the Exterior Port. According to the consultant, “according to the calculations of volumes in the most central área, plus the other ports, not achieved the volume of 6 million TEUs for the period 2025 – 2030”. The consultant also said that “last year we had a movement into all Chile 4.4 million TEUs, but only 2.6 million of these containers with cargo, both in imports as exports”. In that order, he indicated that the growht level in the country to take a quantity of consumption which justifies such an infrastructure should ascend to “I don’t know, in 100%?” – he quipped – and finally he added that an estimate as well “is not real”. Portal Portuario, in turn, comment that Carlos Manterola, Vice President of Asonave (Association that represents the shipping industry of Chile), said that Assotiation is not against the Grand Scale Port construction but that “it is not the time” for that type of investment.
Ecuador: Concessions and private terminals compete in different scenarios
According to newspaper El Expreso from Guayaquil, in 2017 private Terminal Portuario de Guayaquil, TPG, increased performance in movement of containers by 179%, while Contecon – ICTSI group – suffered a decline of 30%. After its expansion and addition of new cranes in 2017, TPG spent moving 210 thousand TEUs in 2016 to 588 thousand last year, snatching the shipping company CMA CGM to Contecon, which operates under a concession regime, wich fell from 1.3 million TEUs in 2016 to 875,000 in 2017. José Antonio Contreras, Contecon Manager, attributed the fall to the expansion of capacity of the private terminals. “The increase in capacity and have different regulatory conditions that we have, we compete in different scenarios,” said Contreras.
The construction of Posorja, where Ecuador projected together with DP World a deepwater port, is also a concern at Contecon. According to his Manager, the new infrastructure will generate overcapacity when it begin to receive vessels in July of next year. Contreras says that Contecon is not yet at the top of its capacity, so other infrastructure will have an impact for concession port facilities. “I believe that Ecuador will enter a port overcapacity and that will generate business and macroeconomic impacts to stakeholders who are involved in this sector,” he told El Universo newspaper. Given that scenario, Contecon asked to government a review to the cannon they are paying because staying current conditions, operations would be non profitables and that would mean complications to keep investing. Contecon says that they has invested $340 million in 10 years they has been handling the port and so far, according to its Manager, have not recovered the investment.