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Latinports Newsletter January-March 2013

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  • 1. January-March 2013Year 5, No. 1The New Commercial Mega-blocksof the World (and its Impact in LatinAmerica)Port Infrastructure andTransportation: the GreatestInvestment Opportunities in LatinAmericaPanama Canal Authority EntersLatinportsVer mas... Ver mas... Ver mas...FourthAnnual Latinports Event to be heldin May in Cancun, Mexico15, 16 y 17 de MayoInfrastructure & Development
  • 2. CONTENTSJanuaryMarch2013LatinAmerican Port NewsMailIVANNUAL SEMINAR OF LATINPORTSEditorialCoverCancun’s Beach, the seat of theIV annual event of Latinportsto be held in May, jointly withthe Association of Terminalsand Port Operators of Mexicoand the Mexican Associationof Port, Maritime and CoastalInfrastructure. Cancun’s Beach,the seat of the IV annual event ofLatinports to be held in May, jointlywith the Association of Terminalsand Port Operators of Mexico andthe Mexican Association of Port,Maritime and Coastal Infrastructure.DesignJulian Pinedawww.miroamarillo.comstudio@miroamarillo.com- Chairman of the Executive Committeeof Latinports in the Senate of Brazil on theModification of the Law of Ports- Chairman Elect and Executive Director ofLatinports Met in Mexico to Coordinate theAnnual EventPRESIDENCYAND EXECUTIVE DIRECTION- Port and TransportationInfrastructure: The GreatestInvestment Opportunities in LatinAmerica- Port Investment Optimization- Project of Bioceanic Corridor Brazil-Chile reactivates- Infrastructure: Pending in LatinAmericaAccording to IDBLOGISTICS,COMPETITIVENESSAND PORTS IN LATINAMERICA- Shipping lines Reduce Speed ofMega-Containerships to Save Fuel andSurvive- Shipping lines Consider Joining toFight Low DemandSEATRANSPORTATIONANDPORTS- Augusto García, General Director ofCorporaciónAutónoma Regional del RíoGrande de la Magdalena, ColombiaTHE INTERVIEWWATERWAYS IN LATINAMERICA- Amazon Waterway in Peru underConcession Process- Infrastructure & Development- Executive Director of Latinports Met withthe New General Coordinator of Ports andMerchant Marine of MexicoLATINAMERICAAND THE WORLD- Lack of Transportation InfrastructureAffects Global Economic Growth- The New Commercial Mega-blocks of theWorld (and its Impact in LatinAmerica)- “This is the Decade of LatinAmerica”- Economic Growth in LatinAmerica: Peru theHighest and Brazil the Lowest- Free Trade Zone between Colombia, Chile,Peru and MexicoNew Members- Panama CanalAuthority- Latingroup- Transportlog
  • 3. Enero - Marzo 2013S EditorialIn view of the great welcome to our newsletter for the amount of relevantinformation that ever more frequently is produced in the region each time, wehave decided to start the year with something new: produce and distribute thenewsletter quarterly (and further on every two months), so the information arrivesto our readers as soon as possible.As has been traditional, we start the year with good news, which on this occasionis the entry of the Panama Canal as member of Latinports. The Panama Canal isthe most representative institution of the seaport sector of the region and one ofthe most representatives worldwide, and for this reason we are proud to have itamong our increasing number of affiliates.Another news worth mentioning is the celebration in May of our annual event inCancun, Mexico, jointly with the annual congress of the Association of Terminalsand Port Operators of that country, ATOP, and the Mexican Association ofPorts, Sea and Coast Infrastructure, AMIP, at the opening of the new federalgovernment and the reform of the law of ports. Furthermore, at this time the newchairman of the executive committee of Latinports, Mexican Arturo López, willtake office. Precisely, Arturo López, president of the Altamira Port Terminal wasthe founder of ATOP and its president for ten years, which makes him one of themost outstanding persons of the Latin American port sector.We also emphasize on the ever increasing relevance that Latin America is havingworldwide, the fact being that important analysts consider that in the next tenyears some of our countries will be included in the list of developed countries.This appreciation fills us with pride and obliges us to work in consequence toachieve this.Finally, we invite you to consult on your mobile device, from the month of May,our redesigned and upgraded webpage www.latinports.org.jpalacio@latinports.orgwww.latinports.orgJulian PalacioExecutive Director
  • 4. Enero - Marzo 2013
  • 5. Enero - Marzo 2013IV ANNUAL SEMINAR OF LATINPORTS INCANCUN, MEXICOHOTEL GREAT PARNASSUS, MAY 15-17INFRASTRUCTURE & DEVELOPMENTThe Association of Terminals and Port Operatorsof Mexico, ATOP, the Mexican Association ofPorts, Sea and Coastal Infrastructure, AMIP, and theLatin American Association of Ports and Terminals,LATINPORTS, cordially invite to participate in thisannual event, which is the platform where expertsof the Latin American port and coastal sectors meetto enter businesses, contribute with their knowledgeand ideas to support development of regionaleconomies.Participate with us and know the tendencies of theLatin American port and coastal sectors in the voiceof recognized specialists and significant actors ofthese activities. It is a meeting that encourages theestablishment of a professional network of high levelcontacts, allows spreading its business, listening andlearning from others, finding possible cooperators,partners or investors. Networking facilitates exchangeof information and contacts as well as establishingrelationships with persons that share professionalinterests.Please find more information in the Website www.congreso.atop.ami.org.mx or emailing to congreso.atop@atopac.mx or calling to telephone 52 5590002511 in Mexico.Hotel reservations (Code AMIP-ATOP):phone (998) 2871400 or emails reservations1@parnassusresorts.com and groupsparnassusreseorts.com
  • 6. Enero - Marzo 2013CHAIRMAN OF THE EXECUTIVE COMMITTEE OFLATINPORTS IN THE SENATE OF BRAZILON THE MODIFICATION OF THE LAW OF PORTSGreat Parnassus Hotel, CancúnRichard Klien highlighted the “boom” of theBrazilian foreign trade as a result of the expeditionof the ports act in 1993, which led to the movementof containers grow five times in only 15 years(1996-2011) with competitive terminals worldwide.Although shown agree in general terms with theprovisional measured amending the law, he did fallinto account that competition must be fair betweenall the container terminals, proposing the expansionof terminals to receive megaships, extension ofexisting lease contracts to enable the expansionsand the equalization of prices and costs among alloperators of port terminals for this purpose.The Chairman of the Executive Committee ofLatinports (and Chairman of the Board of Directorsof Santos Brazil and MultiRio container terminals),Richard Klien, on behalf of the Brazilian Associationof Terminals of Containers, Abratec, intervenedat the public hearing of the month of March inthe Senate of Brazil to secure the position of theGuild in the new port reforms. In this presentation
  • 7. Enero - Marzo 2013CHAIRMAN ELECTAND EXECUTIVE DIRECTOR OFLATINPORTS MEET IN MEXICO TO COORDINATETHEANNUAL EVENTJaime Aguilar, Atop Executive Director, Julián Palacio, Latinports Executive Director,León Fregoso, Atop Chairman, and Arturo López, Latinports Chairman-electOn March 21 in Mexico City, the Chairman Electof the Executive Committee of Latinports, ArturoLópez, and the Executive Director, Julian Palacio,met with the President and the Executive Directorof the Association of Terminals and Port Operatorsof Mexico ATOP, León Fregoso and Jaime Aguilar.That meeting defined the last details of the annualevent that the two associations will make in Cancunin May, jointly with the Mexican Association of Port,Maritime and Coastal Infrastructure, AMIP.
  • 8. Enero - Marzo 2013EXECUTIVE DIRECTOR OF LATINPORTS MET WITHTHE NEW GENERAL COORDINATOROF PORTSAND MERCHANT MARINE OF MEXICOLACK OF TRANSPORT INFRASTRUCTUREAFFECTS GLOBAL ECONOMIC GROWTHGuillermo Ruíz de TeresaGeneral Coordinator of Ports andMerchant Marine of MexicoDuring his trip to Mexico in March, the executivedirector of Latinports had the opportunity tomeet with the new General Coordinator of Portsand Merchant Marine of Mexico, GuillermoRuiz de Teresa, who said that the priorities ofhis Administration will be efficiency and theconectividade of Mexican ports, pillars for thedevelopment of foreign trade.Deficiency in transport and communicationsinfrastructure is one of several supply chain barriersthat act as obstacles for speeding up global economicgrowth, wrote Container Management. That is theconclusion of a report entitled “Enabling Trade:Valuing Growth Opportunities”, prepared by theWorld Economic Forum in collaboration with theWorld Bank, and Bain & Company, a Boston-basedglobal management consulting firm.
  • 9. Enero - Marzo 2013THE NEW COMMERCIAL MEGA-BLOCKSOF THE WORLD(AND ITS IMPACT IN LATINAMERICA)Below is an article of the important editor for Latin America of the Miami Herald and author of severalbooks on the region, Andrés Oppenheimer, published in the economic paper Portafolio of Colombia inFebruary (parenthesis is ours)The announcement by President Barack Obama inhis speech of the State of the Union on the UnitedStates negotiating free trade agreements with Asiaand Europe has brought forth a tricky question: howwill Latin America be impacted with the creation ofnew commercial blocks of the largest economies ofthe world? The answer seems to be that some LatinAmerican countries will benefit from these mega-commercial agreements, while others will be harmed.Before analyzing which countries will be performingwell with the new commercial world geographyand which not, let us see two facts. In his annualspeech before Congress, Obama stated thatother than current negotiations for the signingof the Transpacific Association Agreement withseveral Asian countries and some Latin Americancountries of the Pacific coast, Washington will startconversations to sign a Transatlantic AssociationAgreement with 27 countries of the EuropeanUnion. The Transatlantic Agreement seeks amongother things to promote the recovery of Europe andreactivate world economy, and would result in thecreation of the largest free trade block worldwide.The United States and Europe already represent47% of global economy and one third of worldcommerce.Although the European Union is already the mostimportant commercial partner of the United Statesand customs tariffs between both parties are low –around 4 percent – the Transatlantic Agreement willfurther boost bilateral commerce, reducing costsfor exports on regulatory barriers. The Transpacificand Transatlantic free trade agreements of Obamaare the most ambitions commercial initiativesof the United States after the collapse of 2005in negotiations with the Free Trade Area of theAmericas that included 34 States of the continent.Now, upon the lack of another US project to createThe Transatlantic Agreement that seeks toencourage Europe recovery and reactivate worldeconomy would create the largest free tradeblock of the planet.
  • 10. Enero - Marzo 2013
  • 11. Enero - Marzo 2013to compete with its neighbors that have alreadyentered into these agreements with the United Statesand Europe. “Brazil or Argentina may believe theywill continue eternally growing by making businessmainly with China, but the fact is that the UnitedStates and Europe represent 47 percent of worldeconomy, while China represents approximately 12percent”, said Loser.My opinion: yet to be seen is that the Transatlanticand Transpacific free trade agreements materialize,and if they will be as ambitious as Obama stated. It isalso possible that China reacts by accelerating its ownnegotiations to form its own commercial mega-blockwith India and other Asian countries.But I agree with almost all foreign trade expertsthat if the countries of Mercosur do not enter intosome of the new commercial mega-blocks of theworld, they will remain ever more behind comparedto Mexico, Colombia, Chile and other moreglobalized Latin American nations. Consideringthat Latin America represents only 8 percent ofworld economy, Mercosur members will deceivethemselves if they believe they may grow faster byonly making business among their own neighbors.The world of the commercial mega-blocks will seemever more like the game of chairs, or the musicalchairs, where countries that do not find a seat will beout of the game.a continental free trade block in the Americas, thenew commercial plans of Obama with Asia andEurope may have a positive impact on Mexico,Central America, Colombia, Chile and othercountries that already have free trade agreements,both with the United States as with Europe, as statedby most experts in foreign trade. Inversely related,new commercial initiatives of the United States mayharm members of Mercosur – the commercial blockformed by Argentina, Brazil, Paraguay, Uruguayand Venezuela– and that do not have free tradeagreements with the United States or Europe.“If you already have free trade agreements with theUnited States and Europe, as is the case of Mexicoor Colombia, you may export the same product,under the same conditions, to a much larger market”,states David Lewis, trade specialist of the consultingfirm Manchester Trade of Washington. Besides,Latin American countries that already have free tradeagreements with the United States and Europe maypossibly attract more U.S. and European investments,stated Lewis. This because the TransatlanticAgreement would eliminate restrictions currentlyfaced by European companies as may be, forexample, sending tax free products manufacturedwith European materials from Colombia to the U.S.market.Claudio Loser, a former official of the InternationalMonetary Fund and currently a member of theCentennial Group, another consulting firm ofWashington, states that countries of Mercosur suchas Brazil and Argentina will be the biggest losers ifthese commercial mega-agreements materialize. Onlyif the Mercosur countries enter into, at least, a freetrade agreement with Europe, it will be very difficult
  • 12. Enero - Marzo 2013“THIS IS THE DECADE OF LATINAMERICA”Extracts of the interview of newspaper El Tiempo of Colombia to Benita Ferrero-Waldner, president ofthe European Union-Latin American and Caribbean Foundation (Foundation EU-LAC), former minister ofForeign Relations of Austria and former Commissioner of Foreign Affairs and Commerce of the EuropeanUnion“I believe this is the decade of Latin America, as saidby Luis Alberto Moreno, president of the IDB. Theregion has greatly improved in reducing poverty and,today, a large part of its inhabitants now belong tothe middle class, which has undoubtedly contributedto a constant and solid economic growth, and alsoan institutional strengthening. At the same time,Latin America has learned from its previous crisisand in general has followed an economic andfiscal policy for budgetary consolidation, whichhas made it stronger in this global economic crisis.However, regarding innovation, productivity andcompetitiveness there is still a lot to do; also, highereducation must be improved and more equal fiscalpolicies must be considered. Besides, there is yetmuch to do in physical security, sometimes in legalsecurity and in fighting corruption, all in order toimprove governance.“Latin America lives an unprecedented boomand bonanza, and the fact this is producedsimultaneously with a significant strengthening ofits democracies and a role ever more active of itscivil society constitutes a framework enabling tolook to the future with optimism. And perhapsthe peace process now undertaken by PresidentSantos (of Colombia) may be successful, which willundoubtedly make of your country one of the mostoutstanding of the region”.
  • 13. Enero - Marzo 2013ECONOMIC GROWTH IN LATINAMERICA:PERU THE HIGHESTAND BRAZIL THE LOWESTThe magazine Dinero of Colombia published anarticle of the newspaper Folha of Sao Paulo quotingstudies of the British consulting firm EconomistIntelligence Unit and of banks Itaú and Hsbc,which show that the economic growth of Brazil willhave the lowest annual medium of South Americabetween 2011 and 2013, whereas Peruvian economyshall be the most dynamic within the region, withan economic growth at an annual average of 6.4%during the analyzed period. According to theseanalyses, the second place will be for Ecuador (5.5%),followed by Chile (5.4%), Colombia and Bolivia(both 5%), Argentina (4.9%), Uruguay (4.6%),Guyana (4.5%), Surinam (4.5%), Mexico (3.9 %),Paraguay (3.2 %) and Venezuela (3.2 %).In the case of Brazil, the three studies forecast thatthe annual growth medium will be 2.4% between2011 and 2013, period that coincides with the timein office of President Dilma Rousseff. According tothe chief economist of the bank Itaú, Ilan Goldfajn,all Latin American countries have suffered theeffects of the global crisis, but the deceleration ofBrazilian economy is higher, basically because of avery low investment rate that moves around 18% ofthe Gross Domestic Product (GDP). In Peru andEcuador, the two Latin American countries withthe best economic performance, this rate arrives to25.4% of the GDP, stated the expert. In the opinionof the chief economist of bank HSBC in Brazil,André Loes, another of the factors explaining theslowness of the Brazilian economy is the loss ofcompetitiveness in the national industry, caused bytechnological backlog and infrastructure deficienciescausing a rise in prices. “Brazil has become anexpensive and uncompetitive country, and this hasa negative impact on investment decisions”, statedLoes.Studies also quote some Asian and Europeancountries that will have a better performance thanthat foreseen for the economy of Brazil, until nowconsidered by many financial analysts as the “engine”of Latin America. Among them worth noting are thegrowing forecasts for China, placing it at an averageof 8.5% between 2011 and 2013, Indonesia (6.4%), India (6.4 %), Turkey (5.2 %), Malaysia (4.9 %),Russia (3.9 %), Thailand (3.4 %), South Africa (3.1%), and Poland (2.7 %).
  • 14. Enero - Marzo 2013Separately from the summit of the Community ofLatin American and Caribbean States (CELAC) heldthe end of January in Santiago, the four countriesof the Alliance of the Pacific thoroughly acceleratedtheir intention of creating a free trade zone this yearand announced this will be done before March 31st,as informed by the economic publication Portafolioof Colombia.Although this is the homologation of free tradeagreements existing among them, it encourages theirwish to advance as quickly as possible, only sevenmonths after the creation of this Alliance, whichmain objective is to increase commerce with Asia,the region growing the most. “This is a concreteproof of the pragmatism of the Alliance of thePacific and its wishes to advance quickly”, stated toAFP the political scientist of the University of Chile,Guillermo Holzmann.Mexico, Colombia, Chile and Peru, the economiesthat grow the most in Latin America, have freetrade agreements with the European Union and theUnited States, as proof of their incessant commercialopening. “The four countries of the Allianceof the Pacific share an economic developmentphilosophy that define them as an open regime,oriented to international and friendly trade withforeign investment”, explained on the other hand toAFP Raúl Feliz, academician of the Research andEconomic Teaching Center (CIDE) of Mexico.Brazil, the largest economy of the region, seems totake its own path seeking a strong regional leadership.Altogether with Russia, China, India and SouthAfrica, Brazil is part of the BRICS group that gatherslarge emerging countries that have joined togetherin the main world economic forums. “Being in theBRICS group causes Brazil to go its own way”, saidHolzmann. “Brazil has a self-development project,with less liberal characteristics but not completelyclosed to trade”, stated on the other hand Raúl Feliz.Thus, analysts coincide that the bet for free trade orfor protectionism will continue coexisting in LatinAmerica.FREE TRADE ZONE BETWEEN COLOMBIA, CHILE,PERUAND MEXICO
  • 15. Enero - Marzo 2013Jamaica’s Industry minister Anthony Hylton hasstated that this country is planning to expand its portfacilities in the hope of becoming the fourth majorhub in the world, along with those in Singapore,Dubai (United Arab Emirates) and Rotterdam(Netherlands). This ambitious project, estimated tocost between US$7 billion and US$8 billion over afive to ten year period, has been endorsed by TheWorld Bank, announced Port Finance International.According to the World Bank, with the rightinvestment and global partnerships, Jamaica canbecome the transshipment logistics hub of theAmericas, the Caribbean’s strategic handling point forbulk commodities, as well as the Latin American andCaribbean centre for ship repair and dry docking. Itis being spearheaded by the government so Jamaicacan make the most of the increased maritime activityexpected from the expansion of the Panama Canalby 2015.After sending a delegation to Jamaica, The WorldBank has started to provide technical assistancein the development of the master plan for thelogistics hub. The pillars of the master plan shouldbe unveiled by June 30. Government’s “LogisticsHub initiative” comprises six projects: dredging theKingston Harbor, expanding port facilities at FortAugusta and Gordon Cay, establishing a dry dockfacility at Jackson Bay (Clarendon), establishing atransshipment commodity port near Yallahs (St.Thomas), developing the Caymanas Economic Zone(CEZ), and developing an air cargo and passengerfacility in Vernamfield (Clarendon). The CEZ projectis expected to get started within the next few months.“Some elements of the work should begin by May,”Hylton told in a press conference.Minister Hylton has exhorted potential bidders onthe project to act quickly. “There is a first moveradvantage”, he said.JAMAICALOOKING FOR INVESTORS FOR ITSBILLIONAIRE LOGISTICS HUB
  • 16. Enero - Marzo 2013in Colombia is that we have an inadequateinfrastructure (…) that is a problem, an obstacle forgrowth”, added the official.The Deputy Secretary of the Treasure of Mexico,Fernando Aportela, stated that the number ofreforms the Government wants to approve forthe financial sector seek to improve the capacityof development banks of the state to work withthe private sector. And he said it is also importantto involve pension funds that in Mexico manageassets amounting to more than 150 billion dollars,among other participants. “What I consider veryimportant is to promote private sector participationin infrastructure production”, stated Aportela.The IDB considers that Latin American investmentin infrastructure needs to at least be doubled fromthe current 2.5% of the Gross Domestic Product(GDP), and that almost half of this must come fromthe private sector. This increase could generate anincrease of up to 2 percentage points in the actualpotential growth of the regional GDP, he added.If infrastructure investment rates are maintainedbetween 4 and 6 percent of the GDP for 20 years,the region could eventually reach the levels of EastAsia. China and the IDB announced yesterday afund to which the Asian giant will contribute 2 billiondollars for public and private investments in theregion.Latin Business Chronicle, collecting news fromCNN Expansion and Reuters within the frameworkof the annual meeting of the Inter AmericanDevelopment Bank (IDB) held in Panama in mid-March, emphasized that Latin America is seekingever more the private sector to help finance aninfrastructure deficit of 200,000 million dollars ayear, which is a setback to economic growth andprevents the region from reaching to other emergingmarkets. A better infrastructure, from roads to ports,up to public services suppliers is one of the mostimportant needs of the region, as stated by financialofficers, but limited state budgets restrict the amountthat may be spent by governments, therefore moreprivate participation is required.The infrastructure sector has a “great potential”,stated the general manager of the Central Bank(Banco de la República) of Colombia, JoséDarío Uribe. “One of the bottlenecks to growthInfrastructure: Pending in LatinAmericaAccording to IDBMexico highlights impulse to developmentbanksInfrastructure needs and forecasts
  • 17. Enero - Marzo 2013Standard & Poor’s observed a strong growth infinancial support demand for infrastructure. Lastyear it qualified a record of 25 bond issuance in thissector and during this time of 2013 it has receivedapplications for 15 similar issuances, stated JaneEddy, corporate and sovereign funding director ofthe firm for Latin America. In recent years there hasbeen a large growth in local banks for infrastructurefinancial support, expressed Mini Roy, of the fundingdepartment to global trade of Sumitomo-MitsuiBanking Corporation. “Government support andLatin America has yet to fill huge infrastructure gaps,and now is the time for governments of the regionto address the diverse challenges implied. SinceLatin American countries have shown their greatcapacity to adapt to global economic uncertainties,public budgets are increasing, and private investorsare turning more frequently to Latin America fornew opportunities, as may be assumed from Survey2013 of BNamericas on infrastructure. There arealso advancements in the legal systems, as improvedschemes of public-private associations (PPA) areattracting investors for infrastructure projects.Only to mention one country, Brazil, whichaccording to those surveyed will be the maindestination in the region for infrastructure initiatives,is working a portfolio of projects valued in hundredsof thousands of millions of dollars. In the light oftwo important sports events in the near future, theWorld Cup 2014 and the Olympic Games of 2016in Rio de Janeiro, many of the planned projects arestill to come out from the drawing table. Rhythm ofworks must accelerate in the next 18 months andfor this the entire industry must cooperate, startingwith contractors to provide services to suppliersand teams. The same government is launching anew wave of infrastructure works to add up newvigor to the economic cycle. There are also manymore opportunities in other countries such asChile, Colombia and Peru, while in Mexico the newunderstanding of local players is rapidly extending”,he pointed out.Brazil, host of the Olympic Games and the WorldCup in the next years, expects approximately 94billion dollars in annual investment in the sector upto 2017. Economists of the IDB state that LatinAmerica is a pioneer in attracting private capital forinfrastructure development, but its participationin this segment has recently fallen. Between 2001and 2011 the region attracted only 29% of the totalamount invested in the developing world, comparedto 52% in the ten (10) preceding years.PORTAND TRANSPORTATION INFRASTRUCTURE:THE GREATEST INVESTMENT OPPORTUNITIESIN LATINAMERICADemand for financial support
  • 18. Enero - Marzo 2013government has the political opportunity to startimportant projects in the entire nation.On the other hand, deficient management ofprojects and bureaucracy are still being consideredas the origin of important setbacks. However, sincethe eyes of international companies continue to poseon the region, Latin American governments mustbenefit the most of such a fertile environment of themarket for the benefit of millions of persons andfirms that still lack appropriate public transportationsystems such as roads, trains, ports and airports.Article written for Port Finance International by Dr.Simon Su, Director and Chief Economist of theconsulting firm BMT Asia Pacific, a subsidiary of theBMT Group, based in Hong Kong.The strong growth in many of the emerging markets,including the BRIC states (Brazil, Russia, Indiaand China) is reorganizing the world’s economicpanorama, changing the traditional relationshipstowards a West-East and North-South economicinfluence. As such, the new commercial patternscontinue developing, that is, the intra-Asia-Pacifictrade, the intra-emerging commercial economies (asChina-Latin America) and the China-Africa trade.This diversification is already raising questions anduncertainties in other parts of the world, particularlyPORT INVESTMENT OPTIMIZATIONPort investors must recognize the opportunitiesand challenges in variable trade patterns, andalso respond to the changing global economicpanorama.
  • 19. Enero - Marzo 2013In the last publication of the World EconomicVision, the International Monetary Fund (IMF)forecast that the long-term growth will remain ata level sufficiently sound in many of the emergingmarkets and developing economies. Even moreimportant, acceleration is expected in a real 3.25%growth of the GDP in Latin America for thesecond semester of last year up to 4.75% duringthe second semester of 2013, being Brazil the mainpromoter for this increase. Asian development isalso experimenting growth accelerations becauseof the recent encouragement for the approval ofinfrastructure projects in China. These emergingmarkets are already influencing commercial patternsand arguments are it is at the expense of other partsof the world – European ports, currently in a ratherprecarious situation, are the main example. As theseeconomies become more prominent, port investorsaround the world must recognize opportunitiesand challenges, and consequently respond to thischanging panorama.Brazil, in particular, is becoming a hot spot forinvestors because of the recent impulse of thegovernment to simplify procedures for privateinvestors to get involved in the development of portinfrastructure projects. Supported by strong forecastsin growth rates, both the larger markets of LatinAmerica and those of Africa might also present onthe outside a great opportunity for port investors.However, it is important considering that stronggrowth prospects are very long-term and in theshort-term these economies are still rather volatile,therefore investors must identify and have in mindany risk potential.Governments have a vital role supporting theseinfrastructure projects, where its scope goes fartheraway than a simple development of port facilities.For example, in some countries, investors havesupported the design and construction of lastgeneration port facilities having found that cargo maynot be efficiently transported to and from the portbecause of road congestion or to a deficient externalinfrastructure (highlighted by us).In a tender to attract foreign investment,governments may also give some guarantees withoutduly considering the impact they may have onexisting local businesses. This may at the same timebring forth difficulties and political situations wherepromises are not kept. Port investors must thereforebe careful and assure they carefully investigate andplan proposed options for the site presented to them.Detailed market studies include economic analysisand investment planning developed in the firststages of the process, before acquiring lands orequipment, which undoubtedly will give investorsefficiencies at a longer-term, and also the productivitythey are trying to achieve. Questions on which isthe economic prospect and the industrial tendency,and what is the merchantability and the objectiveinvestment value will allow investors to determinethe growing prospects of local economy. It is vitalfor any investment to know its market. Carrying outthe due diligence on what type of cargo has hadthe greatest growing potential will help identify thein European ports, many of which are struggling tocontinue resisting.
  • 20. Enero - Marzo 2013types of services and facilities needed to be offeredby your port or to be put in place to stay ahead ofcompetition (highlighted by us). The investigationshould also include the evaluation of currentsituation, compared to transportation links to theinterior and to the ports of the competition, orother possible port sites. Even more, investors mustunderstand the implications of the policies affectingtrade, such as cabotage, free zones or bondedwarehouses at ports. As the industry develops, it ispossible that port development concentrates morein the area of bonded warehouses because of themore flexible existing regulations related to taxes andcustoms dispatch.accommodated, and also a quick and easy rotationtime. Having this in mind, planning and feasibilitystudies related to sea transportation and traffic modelmust be carried out to help identify navigation risksand at the same time ensure that port resources areefficiently managed.Upon designing a port, flexibility is a key issue.Within the phase of the master plan, three types ofcargo may be identified as the key market for a portin particular. However, what happens when any ofthese markets has a low execution? Investors arethen left with a particular section of the port havinga slow activity. Ports must be designed in such away that areas with the expected performance mayaccommodate a market that produces income – thisflexibility in the phase of design helps to reduceinvestment risk.While real opportunities exist to achieve a sustainablegrowth in the long-term for port investment inemerging markets, not all that glitters is necessarilygold (highlighted by us). Before committing tosupport a certain scheme, it is essentially importantto carry out a thorough evaluation focused on threedimensions of the Master Plan of the Port. TheEconomic Analysis and Investment Plan and the SeaTransportation and Traffic Model will assure thatthe appropriate scenarios are considered, and alsothat relevant risks are mitigated as part of the duediligence prior to a formal contract.Upon carrying out a master plan, investors must alsofocus their efforts towards port layout, identifyingprocesses involved in handling cargo and seeinghow to rationalize these processes that go beyondits control –as customs –. When this situation isfaced, port investors may consider cooperating withcustoms authorities in particular to identify howto reduce, for example, waiting time. To maximizeopportunities and present its port facilities as anattractive option for shipping lines, investors mayoffer flexibility within the rank of ships to be
  • 21. Enero - Marzo 2013Mayo - Agosto 2011
  • 22. Enero - Marzo 2013The Brazil-Chile bioceanic integration should bea reality in the short-term. This is the result of thedebate regarding the creation of an interoceaniccorridor connecting both countries, an idea deeplydiscussed in Santiago by President Dilma Rousseff,of Brazil and Sebastián Piñera, of Chile, the end ofJanuary, as informed by Mundo Marítimo quotingAgencia Brasil. During the work meeting prior tothe opening of the first Summit of the Communityof Latin American and Caribbean States (CELAC)–European Union (EU), Piñera presented a road mapto the Brazilian president to retake discussions onthis matter. Dilma Rousseff stated, after discussingthe matter with her peer, that the countries will startworking for the integration of their main sea ports.During the joint declaration, the Brazilian presidentemphasized the fraternal relationship between bothcountries, despite not having borders in common.“This friendship without borders now becomesa friendship without frontiers”, stated Rousseff,emphasizing that the integration between the twoneighboring economies is also being discussed bymeans of a railway corridor. The president statedthat even in the face of the difficulties imposed bythe international financial crisis, Brazil and Chile willcontinue maintaining a growth trajectory, distributingits income and maintaining a strategic commercialrelationship, mainly in the field of investment.According to the article of Economía y Negocios ofDecember, the bioceanic corridor that today it takestransporter eleven days to travel 3,270 kilometersbetween Arica and Santos, will be reduced in twodays once the bioceanic road corridor betweenboth cities is opened. This allows that the bioceaniccorridor may be traveled without interruptionsbetween Arica and the Brazilian coast. However, stillmissing are some stretches of the branches that taketo the alternative roads of Iquique (Peru) and Brasilia(Brazil). Pending works concentrate between Oruro(Bolivia) and the Chilean frontier, and a stretchbetween the localities of Concepción and San Matías,all in Bolivia.PROJECT OF BIOCEANIC CORRIDORBRAZIL-CHILE REACTIVATESThe Project
  • 23. Enero - Marzo 2013Mundo Marítimo, quoting Agencia Andina, informedthat according to the Agency for the Promotion ofPrivate Investment of Peru (ProInversión), the saleof the basis to award the concession of the AmazonWaterway Project will start the first quarter of thisyear and tender will be under the modality of co-financed integral projects. According to the tentativeschedule, presentation of the technical and economicoffer will be done during the fourth quarter of 2013.The waterway system basically formed by theMarañón, Huallaga, Ucayali and Amazon Rivers willbecome a waterway system to interconnect the townsof the Amazon region in Peru. The project proposesto develop a series of works and actions, amongwhich is dredging the opening at places representingnavigation restrictions located alongside the riversforming the system, and also the access to the mainriver port terminals.News of The Wall Street Journal from Zeebrugge,Belgium, informs that the largest containership ofthe world, the Marco Polo of CMA CGM, capableof transporting 16,000 TEU at a maximum speedof 24 knots, after a stop at the Belgian Port returnedto China at a speed of only 14 knots to save fuel.Below is an extract of the analysis of the situation byjournalist Inti Laudaro, with our subtitles:The concessioned company will be in charge ofworks and facilities required for the correct operationof the waterway and its maintenance, and alsotraffic control allowing normalizing navigation inthe different stretches of same. Concessionairewill also install a system to Help Navigation thatcomplements existing signals, which will providesecurity to navigation at all parts that present somelevel of considerable difficulty. Likewise, a networkof river gauges will be installed enabling to knowat all times the level of rivers at strategic points,inform navigators of conditions expected duringtheir journey and improve knowledge on rivershydrology. Also will be established a maintenanceand monitoring system of dredging works, systemsto aid navigation and the network of river gauges inorder to assure navigation conditions for the system.AMAZON WATERWAY IN PERU UNDERPROCESS OF CONCESSIONSHIPPING LINES REDUCE SPEED OFMEGA-CONTAINERSHIPSTO SAVE FUELAND SURVIVE
  • 24. Enero - Marzo 2013The size of the Marco Polo and its speed in theEurope-Asia route, shows an interesting anddynamic sub-relation for the industry of sea cargotransportation, as in order to deal with excesscontainers capacity and the fall of transportationtariffs, companies as the French CMA CGMand Danish A.P. Moller Maersk are making aneffort to operate the greatest possible number ofships, benefitting of the economies of scale, anddeveloping transportation at moderate speeds tosave fuel. Decelerating ships, a practice known asslow vapor, not only offers environmental benefits,but upon making fewer trips the ships may adjust toa lower demand per cargo space. Analysts state thispractice has helped prevent a complete collapse ofsea transportation tariffs.CMA CGM ordered the Marco Polo in 2007,when the navigation companies were struggling toaccompany the global trade boom, expanding theirfleets with ever larger ships. However, the financialcrisis of 2008 and the recession that followed inthe United States and the European Union causedtrade volume to fall leaving many ships inactive andcausing transportation companies to lose money.Nevertheless, the French company informed itdecided to continue with the purchase of the MarcoPolo, betting on an extra-big size ship and that alower operational cost per container would help toovercome minor competitors.The Marco Polo will lose its crown as the largestcontainers ship of the world in just a few months,when its rival Maersk puts in service the first of20 ships it ordered, capable of transporting 18,000containers each. Large ships may be a powerfulweapon when dealing with market participation asits operation cost per container is almost 10% lowerthan minor ships, according to Charles W. Clowdis,transportation analyst of the consulting firm IHSGlobal Insight.Nevertheless, the competition is also purchasingbigger ships, state the analysts. In 2015, 16 companieswill be operating ships with a capacity of at least12,000 containers, compared to current nine (9),according to Alphaliner, transportation databank.“If the market recovers quickly, let’s say, in three tofive years, these will be more intelligent ships; but, ifthe market continues sinking, huge ships will worsenthe situation, states Clowdis. Problems of excesscapacity that devastate routes joining the UnitedStates and Europe with Asia will probably transfer toother routes, alerted the analyst, as some ships of the9,000 container category that today are consideredinefficient for the main routes, are being charteredby secondary routes to transport cargo between Asiaand South America/the Caribbean, which are servedby much smaller ships.Underutilization of Speed of ShipsEver Larger Ships in an Uncertain MarketLatin American Trend
  • 25. Enero - Marzo 2013If you cannot against them, join them. This seemsto be the premise under which most Europeanshipping lines are operating nowadays, as the ideaof merging becomes more and more a possibility inthe era of capacity oversupply and low demand andtariffs, according to a recent report from Bloomberg,informed Mundo Marítimo.As reported, the German shipping line Hapag-LloydAG (sixth worldwide) might be in conversationsto merge with Hamburg Sued (12th place), statesBloomberg. Both, the two shipping lines, will havea capacity only below Maersk Line, CMA CGMand MSC. While Hamburg Sued focuses on North-South routes, Hapag-Lloyd would mostly operate theEast-West routes, as between Asia and Europe.The board of directors of both companies areanalyzing since December 2012 “if and underwhat conditions a merger between both companieswould be of interest”, stated the Bloomberg report,specifying that none of the shipping lines is availablefor comments. Analysts quoted by the report statedthat a merger between both shipping lines wouldresult in operational benefits, increase the profit baseand lead to cost reductions.As reported, the German shipping line Hapag-LloydAG (sixth worldwide) might be in conversationsto merge with Hamburg Sued (12th place), statesBloomberg. Both, the two shipping lines, will havea capacity only below Maersk Line, CMA CGMand MSC. While Hamburg Sued focuses on North-South routes, Hapag-Lloyd would mostly operate theEast-West routes, as between Asia and Europe.The board of directors of both companies areanalyzing since December 2012 “if and underwhat conditions a merger between both companieswould be of interest”, stated the Bloomberg report,specifying that none of the shipping lines is availablefor comments. Analysts quoted by the report statedthat a merger between both shipping lines wouldresult in operational benefits, increase the profit baseand lead to cost reductions.However, despite the existing possibility of mergersin the horizon of the shipping industry, analystsinterviewed by Bloomberg believe there will not bea spread of mergers in future years, as much of theconsolidation potential has already taken place.The strategy of merging to fight decreases of theindustry is not new to the shipping world. Some ofthe giants of today are the result of past mergers.French CMA CGM was created by the mergerbetween Cie. Maritime d’Affretement and CGMin 1996. Then in 1998, it acquired the AustralianANL. The Taiwanese Evergreen Marine Corp. hasabsorbed companies such as Uniglory and ItaliaMarittima in the last decades. On the other hand,Maersk has acquired shipping lines among whichare containers operations of Sea-Land Services andRoyal P&O Nedlloyd, as stated in the report.SHIPPING LINES CONSIDER JOINING TOFIGHT LOW DEMANDConversaciones actualesA history of mergers
  • 26. Enero - Marzo 2013The Magdalena River is a national priority. Expertsassure it is the most valuable and important naturalwealth of Colombia. But we do not appreciate this.Having been for two centuries the fundamental coreof the progress of the country, it was abandoned.First the train and then the road to the coastdisplaced the river as cargo and passenger meansof transportation. The great river has sediment andits waters are contaminated, fishing decreased 70per cent, overflow is more frequent and “the jewelof the crown” is no longer a national objective.After many studies and great efforts, some of themunsuccessful, the government of President Santosassumed the duty of recovering the river, allocatedresources for such an important task, and deliveredthe responsibility of executing such a challenge to theaforementioned corporation.Below are extracts of the interview of formerpresidential candidate, Horacio Serpa, to the generaldirector of Cormagdalena, Augusto García:“We will have a River with 886 navigable kilometers”In view of the increasing importance of waterwaysworldwide for a substantial reduction of internaltransportation costs, with a friendly treatment ofthe environment, we consider highly topical theinterview of Ola Política to the general director ofCorporación Autónoma Regional del Río Grande dela Magdalena, Cormagdalena.THE INTERVIEWI am one who considers that Cormagdalenais the principal entity of Colombia because ofthe responsibility it has to address the mostimportant natural resource of the nation as isthe Magdalena River. But it has always haddifficulties in matters of funding. How is thissituation now?This is an industrial and commercial enterprise of theState, created by the Constitution under the initiativeof several constituents, you among others, to givethe Magdalena River the importance it deserves.Fortunately, this government has allocated a budgetof approximately US$700 million for the projectof recovery. The decision was adopted in view ofthe river being not only a waterway, but also that itsreactivation meets a multiple purpose: environmental,social and obviously economic.Presidents always refer to the Magdalena River, butfor a long time ago a president had not referred asconcretely as possible to the river and to the needof its recovery. Will this investment to recoverthe Magdalena River be canalized through thecorporation?Augusto García, General Director ofCorporación Autónoma Regionaldel Río Grande de la Magdalena, Colombia“We will have a River with 886 navigablekilometers”
  • 27. Enero - Marzo 2013Yes. In fact, last January 15 was opened the public-private association process, already on the internetpages of the government, and it is a project thatmust be completed in September of this year. Worksamount to US$600 million that pretend to buildchanneling works between Puerto Salgar, La Doradaand Barrancabermeja, and the maintenance of theriver from Puerto Salgar. With this we will have ariver 886 kilometers long, 7 feet depth (minimumpermanent upstream), totally suitable to become theprincipal transportation waterway for national cargo.Upon the award of the contract, how long willthe execution of works last?There is a difference between dredging, maintenanceand construction. Maintenance will be assumed as ofJanuary 1, 2014 with the basic purpose of addressingcargo transportation. And channeling works will last3 years.in November of this year. The best places are nowbeing identified for the hydroelectric plants, and alsoplants of what size: in some central micro sites, inother medium sites, that will help to regulate riverflows and energy generation.And what may you tell us of our belovedBarranquilla?What we want with the Magdalena River in mattersof transportation is to reduce internal transportationcost that today must be covered by many Colombianentrepreneurs, above all coal producers from thecenter of the country, Santander and the Boyacá-Cundinamarca savannah. But the river needs a portwith a great draft, where large ships may arriveand take these products at competitive prices tothe international market. Thus, Barranquilla hasreactivated its deep-water project: a 20-meter deepport where any type of ships may arrive, especiallythe larger ships that will move through the Caribbeanafter the extension of the Panama Canal. Therefore,Barranquilla, and in Cartagena the port of SociedadPortuaria, will be two destination ports for theMagdalena River, capable of transporting cargoabroad.And the Canal del Dique? (artificial arm of theriver ending in the bay of Cartagena)?Regarding Canal del Dique we have presented aproject to the Adaptation Fund for the preparationof a great study – with resources already allocatedby this government of approximately US$700million – in such a way we may know which are theworks to be built there, and that besides maintainingnavigation allows protecting municipalities fromoverflows as those that occurred in 2010.In other times there were boats and ferries fullof folklore, with orchestras playing cumbia andthe music of the breeze. Will we see this again?Towards the future, will there be programs forenergy generation?Of course. We are developing with the governmentof China a study for a great plan to use theMagdalena River, and one of its most importantprojects is energy generation. This study will be ready
  • 28. Enero - Marzo 2013Enero - Marzo 2013We are preparing a project with the Vice-Ministry ofTourism so the middle and higher Magdalena maybecome an attractive tourist scenario for Colombiansand foreigners…. The problem is there are nonavigation means as before: no boats, no ferries, andno ships to allow tourists to travel. We want to investin ports and docks, in viewpoints and seawalls, for allthis to contribute to a great national tourist project.What may we say to Colombians to have themonce again fall in love with the MagdalenaRiver?The river basin produces 80 percent of the GrossDomestic Product of Colombia and is inhabited by30 percent of its population. This by itself speaks ofthe great importance it has for Colombians. Whenwe allow that today abandoned municipalities – thatwere founded next to this great interconnectionwaterway – reactivate again, the Magdalena River willundoubtedly have a better image.which will allow the transit of containerships of upto 12,000 TEU with maximum dimensions of 49meters of beam, 366 meters of length and 15 metersof draft, and other types of ships such as bulk grainships of up to 170,000 tons of dead weight, whichwill allow meeting demand beyond the year 2025.Marketing director is Oscar Bazán obazan@pancanal.com.After its opening almost one hundred years ago (itscentenary next year), the Panama Canal has had aneffect of extensive proportions by shortening seacommunication time and distance, the dynamics ofcommercial and economic exchange by providing ashort and relatively inexpensive transit route betweenthe two oceans, decisively influencing world patternsof trade, promoting economic growth of developedand developing countries, and further providingthe basic impulse for the economic expansion ofmany remote regions of the world. The extensioncurrently being developed will be completed in 2015,NEW MEMBERSLATINGROUP
  • 29. Enero - Marzo 2013ZPMC is a famous heavy-duty equipmentmanufacturer, and a state holding company listedon A and B shares in Shanghai Stock Exchange.The major shareholder is China CommunicationConstruction Co., Ltd. (CCCC) which is one of top500 companies in the world.Zhejiang Zengzhou Shipbuilding Co, subsidiary ofZengzhou Group, is one of the key Ship Building& Repairing Projects of large scale introduced byZhoushan Government, which is run under themodern shipbuilding pattern in accordance withModern Enterprise System. Company covers anarea of 127 acres, with a 658m deep-water coastline,which makes up a vast ocean to possess a uniquegeographical superiority for ship building andrepairing.The president of Latingroup is Rafael Torrespresident@latingroup.com.coThe representatives for Latin America of ChineseState Enterprises, involving companies with thehighest ranking and international recognition asShanghai Zhenhua Heavy Industry Co ZPMC,China Machinery Engineering Corporation CMECand Zhoushan Zengzhou Ship Repairing & BuildingCo, with an increasing Latin American sea portmarket potential.CMEC is the first large national corporationintegrating foreign trade with industry. Is a largeglobal conglomerate with the contracting of theinternational engineering projects and the exportof complete plants as its core business and its mainbusiness includes the foreign trade business, R&Dwork and design as well the international servicetrade.This recently created Colombian company,dedicated to consultation, supervision, management,structuring and development of ports, sea and riverprojects, and transportation logistics, is formedby experts of the highest level in national andinternational projects, and is here to fill a gap in theLatin American media as it may be entrusted with allphases of a project: from technical studies, financialevaluation, up to legal viability, strategic alliancesand achievement of investors. As a whole, partnersof the company have successfully developed manyprojects in aforementioned sectors.For additional information please visit webpagewww.transportlog.com.co or directly contactMauricio Esteban mesteban@transportlog.com.co
  • 30. Enero - Marzo 2013Latin American Port NewsBoliviaBioceanic Corridor Brazil-Bolivia-Chile willopen in April:Government Accepts Renewal of Port ContractsSigned After 1993:According to Valor of Brazil, on April 5 at San Joséde Chiquitos, Bolivia, will take place the openingof the called Bioceanic Corridor, an input networkthat will allow communicating the Atlantic and thePacific, through Brazilian, Bolivian and Chileanterritories, from the port of Santos to Arica, passingthrough Bolivia. This corridor is the result of anagreement signed in 2007 by former presidents LuizInacio Lula da Silva of Brazil, Michelle Bachelet ofChile, and Evo Morales, of Bolivia, at an estimatedcost of US$604 million.equality with new private terminals” as has beenrequested by current operators.Government Makes Known NationalTransportation StrategyAccording to the article, one of the landmark cases isthat of Santos Brasil that is requesting an extensionof the contract of its terminal, responsible for almost55% of the movement of containers of the portof Santos. The company commits to invest US$350million in works that will enable berthing supercontainerships and increase 50% movement capacityof cargo in the terminal. The article adds that thegovernment is willing to reach an agreement for newinvestment commitments not only with Santos Brasilbut with all other container terminal operators.According to an article of Valor of the beginning ofMarch, the government is favoring the renewal for25 years of the contracts of public service terminalstendered after 1993 in exchange for investments,explaining that “this measure will allow greaterBrasil Chile
  • 31. Enero - Marzo 2013SAAM Associates for the Exploitation of theBuenavista Port in Colombia:BNAmericas informed that according to thecommunication of the Ministry of Transportationand Telecommunications (MTT), the governmentinformed its national transportation strategy that willguide the policies and actors of the sector for theyears to come.“Our country is changing. It is renewing its enginewith a more powerful one. As Ministry, we mustrespond to this context and retake an important rolein planning, task that was delayed for many years.To recover and strengthen this function, we arepromoting the greatest transformation process sincethe creation of the MTT in 1974”, stated the officedirector, Pedro Pablo Errázuriz.National transportation policy points guiding thetransportation sector towards objectives, prioritiesand long-term instruments, among others themodification of road, port and railway infrastructuresectors, and the implementation of investment plans.Among the specific projects incorporated in thisstrategy is the initiative to select the best area and typeof large scale port to be built in the central region ofthe country, a project that will be informed by theend of 2013 when the second part of the nationalstrategy is published, states the communicationAccording to Mundo Marítimo, the Chileancompany SAAM, altogether with the Colombiancompanies Abonos Colombianos S.A. (Abocol) andCompas, announced in January the formation of anassociation for the commercial exploitation of thePort of Buenavista, and also to develop an integral,large scale logistics center, both located in Cartagenade Indias, Colombia, in the sector of Mamonal. Thecompany estimates investments of approximatelyUS$45 million in its first stage.Puerto Buenavista S.A. owns the concession of theport of the same name that currently has a dock of211 meters, which infrastructure will be improvedand the corresponding equipment provided with thepurpose of potentiating and developing it accordingto market requirement characteristics. In addition, thecompany has acquired a nearby lot of approximately41 hectares within the industrial quarter of Cartagenathat will be destined to the development of anintegral logistics center that, among other services,will have warehouses and a distribution center; anarea for the consolidation and deconsolidation ofcargo; a yard for full and empty containers; a storagearea for ro-ro and general cargo, besides extensiveareas to install industries related to foreign tradeactivities.Abocol is a company dedicated to the productionand commercialization of fertilizers for agricultureand is present in seven countries of Latin America.Among its products is nitric acid, ammonia nitrate,calcium nitrate, and also composed fertilizers, asthe case of NPK. Compas is a recently createdcompany, product of the merger of port assets ofthe Argos Group, the largest cement company ofColombia, and Muelles El Bosque, company of theEchavarría Obregón family and the Spanish groupErship, owners until now of Muelles El Bosque.The new firm will have seven port terminals: fouron the Atlantic, two on the Pacific and one on theMagdalena River.
  • 32. Enero - Marzo 2013SAAM is a company focused to provide logisticsservices, tugboats services, where it is one of themain operators worldwide, and operates portterminals, being the second largest Latin Americanoperator.According to information of the economicnewspaper La República, the Group Port ofCartagena, through its sea terminals Manga andContecar, reached the record figure of 2,018,389containers transported by the end of 2012, whichbecomes a historical figure in Colombia andpositions it as the first in the country to achieve suchadvance.to the month of June of this year, considering theyhave advanced in the first phase of the road to thePeninsula of Aguadulce in Colombia, where the seaterminal will be built.“The first phase of the access road has been donewith a total extension of 21 kilometers, work beingbuilt by Sociedad Puerto Industrial Aguadulce, butbased on the designs and supervision of the InstitutoNacional de Vías, Invías, product of an agreementwith them”, stated Miguel Abisambra, companymanager, affiliate of International ContainerTerminal Services Incorporated, ICTSI. The roadwhere more than US$60 million will be investedshall become a national road upon its termination,product of this agreement.In its first phase, the port will transport more than400,000 containers, its specialty, to be done througha dock 600 meters long, initially, and further on willreach 900 meters. Another 250 meter long dock willalso be built to handle bulk and coal, thus enablingto operate more than 2 million tons of each ofthese cargoes. “Works as such in the sea terminalshall start prior to the end of this semester, andaccess road works will continue at the same time,as well as dredging the approach to 14.5 meters”,said Abisambra. It is estimated that this port willbe in operation by mid-2015, but the road must beconcluded by mid-next year.According to an article of Mundo Marítimo, takenfrom El País, the port project of Aguadulce, oneof the oldest in Buenaventura, begins to take shape.Directors expect that its construction will begin priorCartagena Exceeded 2 Million TEUs in 2012`Port of Aguadulce in Buenaventura Would StartConstruction in 2013Port of Mariel Expecting End of EmbargoColombiaCuba
  • 33. Enero - Marzo 2013World sea transportation is changing, and Cuba,located in a strategic communication route isanxious to obtain the economic advantagesthat may offer the port of Mariel, according toChristopher P. Baker, author of the blog MoonsTravel Guide, specialized in Cuban and Costa Ricanmatters, quoted by Mundo Marítimo that gatheredinformation from Martí Noticias. The immediateproblem is that current economic sanctions establishthat any ship arriving to a Cuban port must have towait 180 days to enter the United States. However,while this measure is in force, the interest of makingof the Port of Mariel a huge storage and handlingcenter for regional sea cargo depends of the politicalrapprochement between Washington and Havana.Baker emphasizes that the expansion of the port isdirectly related to the modernization of the PanamaCanal that for 2015 will allow traffic through its locksof cargo ships transporting up to 12,000 containers,a figure three times greater than current one. Toreceive these deep draft mega-cargo ships that willcross in both directions the Pacific, the Atlantic andthe Caribbean, the extensions of the Port of Marielare being built. Engineering works are in charge ofthe Brazilian giant Odebretch in association with theConstruction Company of the Armed Forces ofCuba, and when the extension works are finished,the Port of Mariel will be capable of handlingone million containers a year; and its draft will becapable of receiving the mega-cargo ships crossingthe Panama Canal. The Government of Brazilis supporting the project with a line of credit toCuba of one million dollars. Besides, last month ofNovember, three Brazilian companies, among themMarco Polo, the largest builder of bodies for buses,committed to open production plants within thearea of economic development linked to the port ofMariel.The Chinese company PSA International, basedin Singapore, the same that operates Panamanianports, will be in charge of the administration of thePort of Mariel, qualified as the largest and mostmodern facility of the Caribbean, states Baker. Cubawishes that its modern port facilities will serve seatransit of imports and exports of goods from theentire region, including U.S. ports, but for the timebeing and while the embargo of the United Statesto Cuba is in force, the millionaire investments forthe expansion of the Port of Mariel will not give theresults their sponsors expect, states Baker.According to Mundo Marítimo, quoting Grammaof Cuba and The Nuevo Herald of Miami, theextension of Mariel, located about 45 kilometerswest of Havana, is the most important investmentcurrently being developed in the island, amountingto approximately US$900 million, of this US$640correspond to a credit from Brazil. The executionof works is developed through the InternationalEconomic Association, formed by the Cubanconstruction company Quality and the Braziliancompany COI.This Project is the beginning of the first SpecialDevelopment Zone of the country and its extensioninvolves about 465 square kilometers. It includesa containers terminal that will be the center of thefuture Special Development Zone of Mariel andthat will be connected to different development areasand industries of the zone, all this by means of a
  • 34. Enero - Marzo 2013high performance road, railway and communicationsinfrastructure.After an extensive presentation of proposalsfor the construction of the new Containersand General Cargo Terminal of the NationalPort Company (ENP) of the Port of Cortés,International Container Terminal Services Inc.(ICTSI) was the winning company to carry outthese works, as informed by Mundo Marítimo.The other competitor was the Consortium GrupoMarítimo TCB, S.L./Bolloré Africa Logistics. TheCommissioner of Coalianza and President of theTechnical Committee, José Antonio Pineda, assuredthat “with the award of this contract starts the mostimportant transformation project for the economicreactivation of the National Port Company (ENP)of the Port of Cortés and its areas of influence thatwill benefit of best quality employment sources,development and progress”. As explained by Pineda,the awardee commits to modernize docks, extendberthing lines for ships and build a containersterminal. It also assumes the commitment ofintroducing the necessary equipment to serve ships,which includes 11 mobile cranes for cargo. Althoughthere is not an exact date to start works, the contractforesees that the concessionaire has a period of sixmonths to obtain resources, which is due in Augustof this year.According to the conditions established in thecontract, the awardee must make an investmentfor the first concession of approximately US$500million (of a total of US$624 million), with whichThe government of President Mauricio Funes is inits final period and the Port of La Unión continueswithout being concessioned, despite more than oneyear ago the long expected Law of Concessions wasapproved by the Legislative Assembly. All pointsout that 2013 will be another year of waiting, as,according to the head of the Autonomous PortExecutive Commission (CEPA), Alberto Arene,bases of the tender will be published until April,but then there will be at least six months for theinterested companies to present their offers, thusthe concession may only be granted in September,but if there is no declaration of void tender or anyappeal from any of the participants. But this is notall. CEPA will have to wait another three months todeliver the project to the company being awardedthe tender, as informed by Arene last year. Besides,Arene has left for last the rounds of visits to possibleinvestors, as only until November of last year wasdecided to start tours to various countries of Asiaand America offering the advantages of the seaterminal and “expanding its vision”.Bases for the Tender of Port La Unión will bepublished next AprilICTSI will Build and Operate New Terminal inPuerto Cortés``El SalvadorHonduras
  • 35. Enero - Marzo 2013Construction starts in OctoberTender for the First Phase of the Extension ofthe Port of Guaymas will be opened in Marchthe infrastructure, equipment and port logistics willbe modernized, as the mechanism to guaranteesustainability and recover the first place of themarket of terminals of the region. The infrastructureENP-Puerto Cortés will continue being the propertyof the state of Honduras, and the concessionarieswill have the obligation to build, equip, finance,maintain and operate the containers terminal ofthe port, complying with the highest internationalstandards. Located approximately 200 kilometers inthe northern part of Honduras, Puerto Cortés is thepoint of entry and exit of approximately 80% of theforeign trade of Honduras.International Container Terminal Services Inc(ICTSI) is a Philippine company specialized in theoperation of containers terminals operating 24terminals in 18 countries, among which are severalLatin American countries.At the latest in October of this year will start theconstruction and equipping of the containersterminal of the Port of Cortés in Honduras, asassured by the executives of the Philippine firm,International Container Terminal Services (ICTSI).“We are looking for results shortly. According tothe Schedule of activities we will start operation andconstruction of what has to be done to improvethe infrastructure as of October of this year”,stated Juan Carlos Garrido, director of BusinessDevelopment for the Americas of ICTSI. Theexecutive showed as example the operations thecompany is developing in the Port of Guayaquil,Ecuador, where service yields and improvementswere accomplished in a five-year term.The confirmation of starting works was done aftera meeting of the authorities of the Commissionfor the Promotion of Public-Private Alliances (Co-Alliance) and executives of ICTSI, the companywinner of the tender, with entrepreneurs from thenorth zone in order to socialize on the developmentof the process of the tender and its award, and thebenefits this concession will bring to Honduras.Tender for the first stage of the project for extensionof the Port of Guaymas will be called in March,stated to BNamericas the general director of theport authority, José Luis Castro. “We already have anapproved master program, the executive project isin process, and environmental procedures are also inprocess, and we expect for the beginning of Marchthe dredging tender for the first stage”, stated Castro.The port, located in the northern state of Sonora,Gulf of California, will be developed in twostages, of which the first one involves the dredgingMéxico
  • 36. Enero - Marzo 2013Construction of a new cargo railroad stationappraised in US$30.3 million in the capital of theMexican state of Durango will be completed prior tothe end of the first quarter of the year, and initiationof works for a new railway bypass will be launchedamounting to US$40 million that will go by nextto the state capital, as stated to BNamericas by thegovernor of the state, Jorge Herrera. The project,started in July 2012, includes the construction of 23kilometers of railway, administrative buildings, andstorage and yard facilities. The station is located at anew logistics center being currently built facing theinternational cargo airport, which will benefit of theconnectivity with the Durango-Mazatlán road.The government is developing the electrical, gasand potable water facilities and a treatment plantfor waste water in the logistics center of the 1,600hectares “so companies may arrive and immediatelyinstall themselves”, stated Herrera. The new railwayand construction of 10 terminals for an amountof US$567 million. According to port director,approximately US$173 million will be invested indredging and basic infrastructure for common areas,while the remaining US$394 million will be disbursedby private companies obtaining concessions andto be spent in docks and furnishings. The largestdredging companies of the world – Royal BoskalisWestminster, Dragamex, Van Oord, Jan De Nuland Dredging International – have expressed theirinterest in the tender, stated Castro.Upon completion of works, facilities will have acapacity of 30 million tons per year, comparedto current 7 million. The first dredging phase willconclude in 15 months, and the award of the projectand starting of construction are forecast for thefirst semester of the year. The second phase ofexpansion will involve the construction of a newcontainers terminal and a multipurpose terminal,with a dock 600 meters long. The extension of theport is necessary to meet the ever increasing demandto handle containers cargo, besides the traditionalmarkets of the port for agriculture and mineralcargo. The strong demand of imports and exports tothe center and east of the United States, particularlyto and from Arizona, is also a key promoter forforecast growth, declared the head of the authority.Once the initiative has been completed, the Portof Guaymas will deliver a “viable alternative, asubstitute” to the failed port Project of PuntaColonet (proposed by previous administration as afrontier port between the United States and Mexico),added Castro, who concluded telling that althoughthe terminal of Guaymas will not serve the ports ofLong Beach or Los Angeles (as was the intentionof Puerto Colonet) “we are practically an Americanport with Mexican prices”.Construction of Railway Terminal in Durangois completed
  • 37. Enero - Marzo 2013pole “will strengthen Durango as a logistics worldclass hub”, he added.Construction of the Durango-Mazatlán road, valuedin US$2,000 million that will become the first inter-coastal road built in Mexico, will be completed thesecond semester of this year, stated the governor.This super road is 230 kilometers long and has twolanes that will allow circulating at 110 km per hour,and is part of the axis road Mazatlán-Matamoros inthe Atlantic, for a total of 1,241 kilometers. Workswill reduce cargo transportation time between theAtlantic port of Mazatlán and Durango in two and ahalf hours.According to the report of Mundo Marítimo, takenfrom La Estrella of Panama, upon termination ofthe extension Project of the Panama Canal therewill be a bottleneck because of the increase inthe capacity of the logistics sector of the country,thus services will be required to assist in satisfyingThe Panama Canal manages other logisticsbusinesses to prevent bottleneckfuture demand. The direct economic impact of thisextension may be of approximately 5% of the GrossDomestic Product (GDP), but other contributions(16%) will come from other activities according tostudies developed by the Panama Canal Authority(ACP, in Spanish). In the meantime, the ACP hasstarted looking for solutions to optimize the sector.Rodolfo Sabonge, Strategic Planning Vice-presidentof the ACP confirmed the analysis is being done todevelop businesses in addition to the transit of ships.For this, the ACP engaged the consulting firm HRDto develop the viability studies for eight projects,including terminals for the supply of liquefiednatural gas (LNG), distribution of automobiles andbunkering, a logistics park, a top-off operationscenter, another for ship repairs, a water rail andthe port of Corozal, the latter the best known ofall. “The first element showing us we now are infull capacity is that ports grew only 3% because oflack of capacity and not lack of demand,” statedSabonge. He mentioned that the ACP is assumingthe leadership in this matter, but it must not benecessarily developed only by them. What is soughtis that it is done because in this way the Canal addsvalue to the route. “We now see that our logisticssystem has lots of potholes”, he said.77% of containerships transiting the interoceanicroute arrive to Panamanian ports, and thus, there is aclose relation between transit and transshipment. Theshipper transits through the Canal, unloads cargoand also picks up cargo, which adds value as it willcharge freights, and does not leave empty, explainedthe official. “We are interested in the existence ofservices complementary to the extension”, statedSabonge. Studies will be ready in six months and itwill be the board of directors of ACP that makesthis decision. For the time being, more than US$1.2million have been invested. These projects will havea positive impact in the growth of economy andPanamá
  • 38. Enero - Marzo 2013employment generation.The water rail will be a service of barges transportingcontainers. These will be moved from placeswhere existing railroad has no access, as ports to bedeveloped in the west bank of the Canal. They willpass by current locks – which capacity will be inactive– as it is foreseen that most part of traffic will passthrough the new locks. Another study establishes thecreation of a ship repair, post-panamax type terminalthat will transit by this route, as in the area there areno dikes sufficiently big to provide services to them.The ro-ro or automobile distribution terminal willreceive crude vehicles and tires, leather seats andother accessories will be installed there. This maybe located in the old shooting polygons that weredecontaminated.The most advanced studies are those for the portof Corozal. In April the final viability report maybe ready to be presented to the board of directorsthat will decide if construction proceeds or not.Further on, funding will be determined. At thistime simulation studies are being done in view ofthe closeness of the port to the new locks anda present task is to demonstrate if there are anyrisks, considering traffic and 20-year demand.Study costs US$200,000 and feasibility study US$1million. To build the sea terminal 118 hectares ofthe government and other 75 ha of the ACP will beused.Rubén Lachman, of the company Intracorp,reiterated that the core of Panamanian economyis the interoceanic route. Its company developedin 2006 the first economic impact study of theextension. The economist stated as good the ACPinitiative to be leader in this matter. “Many activitiesdeveloped in the country are based on the Canal, asthe Free Zone of Colon, commercial activities, portsand the banking center”, he stated.The projectsEnero - Marzo 2013I am happy to verify that the annual eventof Latinports in Valparaíso was a completesuccess.Richard KlienChairman, Executive Committee ofLatinportsBrasilVery good the Declaration of ValparaísoMarcelo AraújoPresidentLibra GroupBrazilMail
  • 39. Enero - Marzo 2013I found pertinent, objective and concrete theconclusion on Multimodality and Logistics of theDeclaration of Valparaíso.Miguel Ángel YáñezGeneral ManagerIntermodal Logistics Terminal ofHidalgo, MexicoA member of the Hutchison Port Holdings GroupI found the Declaration of Valparaíso very goodand clearHarald JaegerGeneral ManagerEmpresa Portuaria ValparaísoChileCongratulations on the event held in Valparaíso.Celso CamargoPort of New Orleans South AmericaOffice in BrazilLe agradezco me haya enviado el boletíninformativo el cual es muy informativo. Me hetomado la libertad de enviarlo a mis colegas enLatinoamérica.Diego F. QuirogaPrincipal Engineer, Maritime and PortsURS Infrastructure & Environment UKLimitedBasingstoke, United KingdomVery complete newsletterrturo LópezChairman Elect of LatinportsMexico`Thanks for the article (on the reactivation of theMagdalena River navigation) published in themagazine of National Association of Producersof Concrete. I believe beyond doubt that we willhave a project ready this year for the reactivationof the Magdalena.Augusto GarcíaGeneral DirectorCormagdalenaBogotá, Colombia
  • 40. Enero - Marzo 2013LATIN AMERICAN ASSOCIATION OF PORTS AND TERMINALSLATINPORTSMEMBERSHIP FORMCORPORATE MEMBER (Latin American Port or Terminal): ___SUSTAINING MEMBER (Companies related to the port industry or portsand terminals from other regions of the world): ___Company:Address:City, Country:Telephone:Website:Legal Representative (Contact Person):Position:E-mail:Brief Description of the Company:As corporate (sustaining) member we agree to pay the annual dues ofUS$2,500 (US$850) within 30 days following presentation of the invoice.SIGNED:NAME AND POSITION OF PERSONFILLING OUT THE FORM:DATE:Please return this form filled out to jpalacio@latinports.org