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Port of-sines-terminal-xxi--wh

  1. 1. PORT OF SINES TERMINAL XXI: WHICH DEVELOPMENT SCENARIOS? Manuel Tão, Universidade do Algarve (mtao@ualg.pt) Frederico Ferreira (frederico.ferreira@netvisao.pt) Elisabete Arsenio, LNEC I.P. (elisabete.arsenio@lnec.pt) Abstract The Port of Sines “Terminal XXI” is an Iberian sea container harbour capable of accommodating vessels of the “Post-Panamax” type. Located in the South of Portugal´s West Coast, “Terminal XXI” bears a unique location towards the Atlantic (37º57´N, 08º53´W), being the result of a thirty year-long public concession awarded to the Port of Singapore Authority (PSA) on a BOT model basis. The main sea container carrier associated is the Mediterranean Shipping Company (MSC). This paper aims to assess the likely developments of the Sines “Terminal XXI” container facility, presenting alternative development scenarios, set at three distinct periods: i) 2014-2020, during the first years after the widening of the Panama Canal; ii) 2020-2030, including the fully completion and bringing into commercial operation of the new RTE-T “Corridor 16” Rail Link; and iii) beyond 2030, contemplating the establishment of a Central Pyrenean Tunnel as an alternative to the historical and traditional rail links, via the Basque Country and Catalonia, and the widespread use of 1435mm standard-gauge tracks, replacing the 1668mm broad-gauge ones, currently existent on virtually all conventional (non-high speed) main line railways of the Iberian Peninsula. Recent proposals concerning the possible constitution of an American-EU Free-Trade Area on a medium-term period, further emphasize the likely importance of Sines “Terminal XXI”. Since the port of Sines presents a unique deep-water Atlantic container terminal in Western Europe, research results are expected to provide useful indicators for policy purposes, leading to more sustainable development patterns of global freight and logistics. 1. Introduction - Presenting Sines Harbour Terminal XXI Portugal has a strategic location in the Atlantic European coastal area and the Iberian Peninsula, being crossed by principal maritime routes North-South and East-West (ENM, 2013). The Port of Sines “Terminal XXI” is an Iberian sea container harbour capable of accommodating vessels of the “Pos-Panamax” type. Located in the South of Portugal´s West Coast, “Terminal XXI” bears a unique location towards the Atlantic (37º57´N, 08º53´W), being the result of a thirty year- long public concession awarded to the Port of Singapore Authority (PSA) on a BOT model basis, in 2004. As a deep water port (17.5m ZH depth), Sines “Terminal XXI”, presents a capacity of handling 1.320.000 TEU´s per year, over a 940m long quayside, and includes a 24 ha (38,4 acre) storage surface. Up to a total of 230,4 Million Euros were invested by PSA in Terminal XXI.
  2. 2. Figure 1: The privileged Atlantic positioning of Sines and its container Terminal XXI (Source: APS – Administração do Porto de Sines) 2. Main target markets of Terminal XXI? Sines Harbour Terminal XXI is inserted in a broader territory of mainland Portugal designated by Alentejo Region. This is a vast extension of land, accounting roughly for one third of Continental Portugal. But, in reality, such region delivers a very limited contribution in terms of national GDP and demographic strength (Table 1). Table 1: Sines Harbour and its near region Alentejo Region (2010) Portugal (2010) Surface Km2 31.605 92.212 Population (Residents) 749.055 10.562.178 Population Density(inh/ Km2 ) 23,7 114,5 Gross Domestic Product 106 € 11.027 172.571 GDP/capita 103 € 14,70 16,20 Source: INE-Portugal and AICEP – Portugal Global A deep-water container terminal, able to accommodate Post-Panamax vessels can hardly be justified by the local market presented by the Alentejo Region. Its role can only be explained in the light of a much bigger “hinterland”, comprising the whole mainland Portugal and also the center of the Iberian Peninsula, with a particular emphasis placed on the Comunidad Autonoma de Madrid.
  3. 3. Table 2: A comparison between Portugal and Madrid, Sines potential “hinterland” Portugal (2010) Comunidad de Madrid (2010) Surface Km2 92.212 8028 Population (Residents) 10.562.178 6.458.684 Population Density (inh/ Km2 ) 114,5 804,6 Gross Domestic Product 106 € 172.571 188.076 GDP/capita 103 € 16,20 29,11 Source: INE-Portugal, INE – España and AICEP – Portugal Global The Region of Madrid assumes a leading role from the economic perspective, its GDP surpassing the whole economic output of Portugal, both in absolute and relative to the resident population. Sines Harbour´s Terminal XXI, and its thirty-year long concession to the Port of Singapore Authority, together with its association with a major planetary logistics operator (MSC), may only be understood by the Atlantic positioning relative to the center of the Iberian Peninsula, and its generation of international freight, both import and export flows. The importance of the Comunidad de Madrid, as a major World economic player within a globalized market may be even further emphasized when the main geographical patterns of its international trade are observed. Table 3: Exports and Imports of the Comunidad de Madrid at a glance Exports (FOB) Imports (CIF) 2010 Operations Amount Weight Operations Amount Weight (Nº) € 1.000 Tonnes (Nº) € 1.000 Tonnes TOTAL 1.650.494 21.580,17 9.822.535 2.712.455 52.171,43 16.833.983 EUROPE 841.652 13.905,90 4.713.788 1.630.558 35.396,32 9.767.783 AFRICA 76.271 1.290,30 875.883 30.705 947,91 1.453.039 AMERICA 250.912 2.551,10 884.846 350.574 5.847,95 3.082.521 NORTH AMERICA 97.371 1.390,12 276.636 288.107 4.158,79 763.135 Of which USA 69.723 1.135,99 173.064 275.373 3.920,02 664.437 Of which Canada 27.645 254,11 103.571 12.725 238,77 98.697 CENTRAL AMERICA 99.167 503,89 119.555 25.113 480,73 83.116 SOUTH AMERICA 54.374 657,10 488.655 37.354 1.208,43 2.236.270 ASIA 268.922 1.803,50 502.506 685.358 9.292,30 2.329.863 Of which Korea 7.507 116,73 12.823 27.454 335,09 38.573 Of which Japan 16.295 357,22 10.684 80.394 822,34 167.332 Of which Taiwan 1.819 67,04 16.432 33.673 312,13 27.723 Of which Hong Kong 12.658 133,20 30.072 17.509 110,35 4.162 Of which India 8.648 116,76 31.201 54.666 617,52 315.251 Of which China 25.866 239,74 111.172 378.768 5.054,58 773.512 OCEANIA 4.109 346,88 21.314 3.613 135,63 4.573 Of which Australia 3.210 326,77 20.270 2.714 116,76 1.663 Of which New Zealand 607 18,70 926 850 18,68 2.852 Source: Instituto Estadistico de la Comunidad de Madrid. Comercio Exterior (2010).
  4. 4. Of both the Export and Import flows originating/towards the Region of Madrid, susceptible of being mostly carried by sea transport, North America, Central America (Mexico and Caribean), and South America, on the one hand and Asia (China, India and Japan), on the other hand, emerge as major geo-economic areas generating traffic. The first three groups of Origins and Destinations are logically prime users of the Atlantic Ocean routes, as a support to their trade flows, whereas Asian trade relies mostly on the Mediterranean and Suez/Indic Ocean traditional routes. Figure 2: The logical potential “hinterland” of Sines Terminal XXI in Iberia Source: APS – Administração do Porto de Sines 3. Terminal XXI and its Iberian competitors Being a “Post-Panamax” facility, Sines Harbour Terminal XXI appears as a recent additional infrastructure to the very restricted group of container ports of such a kind in the whole Iberian Peninsula. The other three container ports with the same characteristics are all located in the Spanish territory, more precisely in the Mediterranean Sea: Bahia de Algeciras, Valencia and Barcelona. A brief comparative description with Sines Terminal XXI can be summarized as follows: Table 4: A comparison between Sines Terminal XXI and its Iberian competitors Depth (ZH) Distance to Panama Container Traffic Container Traffic Growth Rate 2009/2012 Land Availability (m) Nautic Miles 2009 (TEU) 2012 (TEU) % Algeciras 16 4376 3042782 4070791 34 Very scarce Valencia 14 4754 3653890 4469754 22 Very scarce Barcelona 16 4885 1800662 1749974 -2,8 Limited Sines 17,5 4168 253495 553065 118 Good Source: APS – Sines, 2012; Estadisticas de los Puertos de Estado, Ministerio de Fomento. Madrid, 2013 and Moreira, P.J.P, 2013.
  5. 5. Valencia Port is from 2008, the most important sea container terminal in the Iberian Peninsula, and the prime freight World access to the Comunidad de Madrid, closely followed by Algeciras. But what is remarkable is Sines Terminal XXI growth rate within less than a decade of existence. Recent estimates pinpoint traffic loads of 800.000 TEUs for Sines Terminal XXI at the end of 2013 (APS, 2013), denoting a sustainable tendency of traffic increase, which is even more relevant taking into account the general economic recession affecting the Euro Zone, and Portugal, in particular. There are other qualitative aspects in which Sines Terminal XXI appears with a clear advantage over its closest Post-Panamax Iberian competitors: land availability for expansion and Atlantic positioning. As far as the latter is concerned, Sines is closer to main American ports than any other deep-water sea container terminal in Iberia. Table 5: Atlantic sea distances from Terminal XXI and its competitors to Americas Santos (Brazil) Buenos Aires (Arg) New York (USA) Halifax (Can) Nautic Miles Nautic Miles Nautic Miles Nautic Miles Sines 4062 4964 2864 2392 Algeciras 4403 5305 3205 2733 Valencia 4781 5683 3583 3111 Barcelona 4912 5814 3714 3242 Source: National Geospatial-Inteligence Agency. Distances between ports. Bethesda, Maryland, 2001. 4. Terminal XXI and the widening of the Panama Canal The Atlantic positioning of “Terminal XXI” acquires a particular importance in the wake of the Panama Canal widening. From 2018 onwards, it will be possible for the Post-Panamax container carriers, to follow a new planetary route linking the emerging economies of Far East Asia and those of Western Europe, with a passage by North America´s East Coast, as an intermediate point. The economies of scale brought about by the new route, presenting itself as an alternative to the traditional Indic-Suez and Cape Horn-South America routes, is susceptible of originating a re- configuration of the pattern of “Post Panamax” vessel routes worldwide, with an increasing emphasis being conferred to the North Atlantic. Even if a combination of world Post-Panamax routes, under a “round-the-world” basis, by the simultaneous use of both the Suez Canal and the widened Panama Canal route becomes feasible (Notteboom, T. e Rodrigue, J-P. ,2009), a higher importance of the Atlantic sea container routes appear as most likely.
  6. 6. The "trade-off" between the costs per TEU, carried on conventional Panamax ships, from the Far East economies to America´s East Coast (and therefore Eastwards through the open Atlantic to Europe) can be illustrated as follows: Table 6: Annual Cost per TEU (including Panama Tolls) of a typical Far East-NY Route Hong Kong to New York via Panama Evergreen Line: (11,211 Nautic Miles) Cost per TEU moved (U$) Current Panamax Post-Panamax (1) Post-Panamax (2) Annual Total Vessel Cost (U$) 54,908,090 106,054,472 105,715,772 Vessel Utilization 80% 80% 51% TEU moved (round-trip voyage) 6400 19200 12240 Annual Trips per Vessel 5.8 5.8 5.8 TEU moved per year 37079 111238 70914 Cost per TEU moved (U$) 1481 953 1491 Source: NC Maritime Strategy. Vessel Size vs. Cost (2012) As it can be observed, an 80% ship loading enables an approximate overall 33% cost reduction per TEU, on the route between the Far East and the ports of North America´s East Coast, if Post- Panamax vessels are employed, from 2018 onwards. This route is mostly the Pacific portion of a longer intercontinental path to the European Atlantic ports, alternative to the Suez route. The Atlantic positioning of Sines Terminal XXI is emphasized by the fact that it matches perfectly the main Panama Canal routes established between either its most direct competitors in the Iberia, or even the planetary harbours located in Northern Europe. Table 7: Distance between Sines, several other European post-Panamax container terminals and the Far East, via widened Panama Singapore (SG) Hong Kong (HK) Shangai (CN) Kobe (JP) Nautic Miles Nautic Miles Nautic Miles Nautic Miles Sines 14,673 13,293 12,734 12,132 Algeciras 14,881 13,501 12,942 12,340 Valencia 15,259 13,879 13,320 12,718 Barcelona 15,390 14,010 13,451 12,849 Le Havre 15,122 13,742 13,183 12,581 Antwerp 15,320 13,940 13,381 12,779 Rotterdam 15,315 13,935 13,376 12,774 Source: National Geospatial-Inteligence Agency. Distances between ports. Bethesda, Maryland, 2001. Moreover, the increase in distance, resulting from switching routes from Suez-Indic to Pacific- Atlantic, once the Panama Canal is widened, remains very much in line and within the same magnitude experienced for a set of competitors, with a slight advantage towards Iberian post- Panamax container ports, and a small disadvantage relative to the major ports of Northern Europe. Nevertheless, transport costs increase less that proportionally with distance, roughly 2% for every 10% of mileage Micco et al. (2001) and Fink et al. (2000). Therefore, the overall cost increase accruing from a greater distance being travelled by Panama becomes clearly offset by the savings enabled with the scale of operations of Post-Panamax vessels. As in the case of Panama, the Suez passage is also subject to the levy of tolls.
  7. 7. Table 8: Distance increase between Sines, several other European post-Panamax container terminals and the Far East, via Panama, relative to Suez-Imdic Route Singapore (SG) Hong Kong (HK) Shangai (CN) Kobe (JP) % % % % Sines 51 32 26 18 Algeciras 53 35 29 22 Valencia 56 39 33 26 Barcelona 57 40 34 27 Le Havre 44 26 19 12 Antwerp 44 26 19 11 Rotterdam 43 25 18 11 Source: National Geospatial-Inteligence Agency. Distances between ports.Bethesda, Maryland, 2001. The post-2018 scenario, with the full completion of Panama Canal widening, suggests the establishment of a new hierarchy of planetary sea routes. However, such routes are not likely to be captured equally by all the possible competing Post-Panamax terminals located on the European side of the Atlantic. There are a set of port endogeneous and exogeneous variables which appear to be determinant, to explain inter-port competitiveness. A different number of authors and their respective approaches mention more or less factors susceptible of explaining port choice: Decruet and Noteboom (2010), refer at a maximum eleven influential factors, whereas Zondag (2008) concentrates on just seven. Owing to its strategic positioning as a deep-water container port, Sines “Terminal XXI”, is a likely candidate, to become integrated into the new emerging global logistics network. For this purpose, transport intermodality will play a key role for cost reduction. Some of the endogeneous variables, such as port operation efficiency, are to a great extent in reach of an entity, such as the Port of Singapore Authority (PSA), and the Mediterranean Shipping Company (MSC), its main associated sea carrier. But other aspects, regarding for instance, the establishment of land transport infrastructure determinant to port "hinterland" size and a greater number of inland final clients, depend strictly on decision-makers and the expenditure of public funds. 5. Terminal XXI and the problem of the inland traffic: the rail accessibility Hitherto, it has been stated that the natural “hinterland” of Sines Terninal XXI, is the Region of the Comunidad de Madrid, overlapping with each one of the much-better established post-Panamax counterparts lying in Spanish territory along the Mediterranean (Algeciras, Valencia and Barcelona). But no details have been given yet on the crucial factor of rail accessibility. The scale of operation of such kind of container terminals relegate road transport to insignificance. Studies by Wilsmeier and Notteboom (2010), state that the configuration of the maritime service lines are not just the result of exogenous factors related to the development of trade and the dispersal of economic activity in the hinterland. The authors emphasize endogenous factors, such as the local environment of the port, access to the hinterland, the strategies of market players and government policies, as well as the public investment made in basic infrastructure and interconnectivity of the hinterland throw a key card in allowing fast, efficient and reliable land connections. Martinez- Zarzoso et al. (2005) e Combes et al. (2005) stress how the quality of transport infrastructure plays a determinant role in the overall cost. Arionetis et al. (2010) state that shipping companies decision to call at a port cannot be made without available cargo from/to that port, which is closely linked to ports’ geographical location and the area that can be served through it.
  8. 8. The only existing rail accessibility linking Sines Terminal XXI to the center of the Iberian Peninsula and the rest of mainland Portugal was not designed to serve a post-Panamax sea container interchange. It results from a set of historical circumstances that a former rural 50 Km-long railway inaugurated as late as 1937, and branching off one of the two main lines from Lisbon to the South, became, de facto, the only existent Sines rail accessibility to the present day. Eventually, the line was upgraded and even electrified in 2002 (together with the main line from Lisboa to Faro, to where it is connected). But its insertion within the active Portuguese rail network does not account for a direct route to Madrid through the logical Extremadura Community land gateway (via Badajoz): Instead, any rail movement from Terminal XXI towards Spain involves necessarily a circuitous itinerary, using many sections of mostly congested single-track. Figure 3: The lengthy Sines rail access to Spain and the need of Corridor 16 Source: REFER (Portugal) The shortcomings of the rail link to Terminal XXI are addressed by the main directives of RTE-T Corridor 16. Such corridor includes building a 92 Km-long cut-off line from Évora to the Elvas/Badajoz border enabling a saving of nearly 140 to 200 Km route distance and reducing in nearly 50% the travel time to the border. Also, under the directives of Corridor 16, in Spanish territory, the conventional line, from Badajoz to Mérida and Ciudad Real/Manzanares, enabling
  9. 9. access Madrid and the Mediterranean will be upgraded and electrified on the 25 kV 50 Hz as far as Puertollano (existing 3 kV dc catenary Eastwards would mean the use of dual-voltage ERTMS equipped motive power). Figure 4: The full development of RTE-T Corridor 16 in Iberia Source: TEN-T Executive Agency. The Portuguese section from Sines to Évora is already fully upgraded, with the 92 Km “missing- link” from Évora to Elvas/Badajoz border, having been contracted out after a bidding process by the XVIII Portuguese Government in 2011, with completion and full operation being envisaged for the three years kater. Since this project was suspended due to its financial sustainability, it is not known when the scheme will be revived, since, unlike Spain (and its Ministerio de Fomento PITVI 2012- 2024), Portugal has not yet an integrated Master Plan for its rail (and other transport modes) infrastructures. However, some efforts have been made to build a long-term National Strategy for the Sea (until 2020) and, in 2011, of a Strategic Transport Plan focusing of the financial sustainability of the transport sector. The circuitous rail route from Sines Terminal XXI to Spain will therefore remain for a further period (of uncertain time length) as the only possible connection to Greater Madrid, and such a situation is a clear disadvantage, when a comparison is made with railway accessibility of the other three pot-Panamax container terminal of the Spanish Mediterranean coast.
  10. 10. Table 9: A comparison of rail accessibility of Terminal XXI and its Iberian competitors Rail Distance to Madrid (*) (Km) Basic Infrastructure Characteristics Algeciras 756 Algeciras-Bobadilla, under electrification. Bobadilla-Madrid electrified 3 kV dc. (partly double track). Valencia 464 Fully electrified 3 kV dc. Mostly double track. Barcelona 665 Fully electrified 3 kV. Mostly double track, or with 3 alternative routes. Sines 921 Electrified 25 kV ac 50 Hz Sines-Entroncamento, Diesel Eastwards. Mostly single track. (*)Approximate distances, not including the final approaches to Abroñigal Container Terminal or Vicalvaro-Coslada Puerto Seco. Hopefully, the opportunity of Sines Terminal capturing intercontinental traffic originating from the Far East, resulting from the widening of the Panama Canal is far from being lost, since the scheme has been slipped in time, from its initial 2014 target, to the year of 2018. 6. Supplementing Sines Terminal XXI: the new Vasco da Gama Terminal Besides its privileged Atlantic location as a Post-Panamax container port, one of the biggest assets of Sines is a considerable extension of free land, available for expansion. Such a condition positions Sines very differently relative to the other three Iberian Post-Panamax container ports. Either Barcelona or Valencia face physical constraints for further expansion, dictated by the proximity of huge evolving urban areas, whereas Algeciras is strongly conditioned by natural factors of its bay, the Strait and vicinity with Gibraltar. The name of the 16th century navigator Vasco da Gama was chosen to designate a new proposed container terminal, to be located South of the present Port of Singapore Terminal XXI, and supplementing it. When built, such terminal would have the following main characteristics: - A double terminal with an annual capacity of 4,5 Million TEU´s, each. - A 3360m-long quay. - A 113 ha container storage area. - Depth: -18m (ZH) - Able to accommodate Post-Panamax vessels carrying 18.000 TEU´s. Vasco da Gama Terminal would result, together with Terminal XXI, in a container handling capacity of over 10.6 Million TEU´s per year. At present, no operators have made any firm decision on Vasco da Gama, which would be set up following a BOT model basis similar to Terminal XXI, run by the Port of Singapore Authority. Expenditure would reach as much as 931 Million euros, with 705 Million being funded by the concessionary entity. (APS, 2013)
  11. 11. 7. Beyond Iberia Much public discussion has taken place in Portugal on the prospects of Sines Harbour, as a container port, is its ability to capture traffic beyond the geo-ecomic space of the Iberian Peninsula. Basically, Post-Panamax inter-port competition would not be limited to the Iberian “hinterland” and its “puertos secos” (dry ports, such as Zaragoza´s PLAZA), but would extend to the core of mainland Europe. Sines, together with Algeciras, Valencia and Barcelona would reveal some capacity to abstract inland traffic from container port facilities in Northern Europe. Corridor RTE-T 16, Sines/Algeciras-Manzanares-Madrid-Zaragoza-Pyrenées will take years, if not decades to acquire its final form, as a major standard-gauge (1435mm), ranging from both Iberian Atlantic ports to a so-called 40 Km-long “Central Pyrenean Base Tunnel” (Zaragoza-Tarbes), without prospects of funding on a medium-term basis. As a standard-gauge passenger-dedicated AVE high-speed network is progressing, full conversion of over 15,000 Km of 1668mm-gauge conventional routes in Iberia has no foreseeable completion, apart from an isolated penetration from France to Barcelona (eventually Tarragona, by 2016), by the addition of a third rail, under the auspices of Spanish PITVI (2012-2024), “FERMED/Mediterranean Corridor”. Nevertheless, for an undefined period, most conventional Iberian-gauge (1668mm) main lines will remain unchanged, and connected with the French network by means of the usual axle-changing facilities, run by Transfesa, located at border points such as Hendaye and Cerbère. But even if rail accessibility and interoperability conditions of Iberian Post-Panamax ports were been strengthened to the maximum extent, the reduction of generalized cost accruing from running 750m-long container trains (currently 450m being the maximum in Iberia) without any break of gauge along the route, might not constitute a “trade-off” susceptible of matching the inertia of major logistic operators and their long and well-established chains, associated with huge historical harbours, such as, for instance, Antwerp or Rotterdam. 8. Prospective analysis: some insights A prospective analysis for the Port of Sines cannot be presented without a considerable extent of simplification. This is due to the vast number and different nature of both endogenous and (particularly) exogenous variables, as main determinants for the development of planetary, trade and consequently container transport. As far as exogenous variables are concerned it will be assumed that for an horizon of 2030, the widening of Panama Canal will have introduced a new pattern of sea routes, from Far East Asia to Europe, wholly enclosed within the Western hemisphere, which are relatively immune to political uncertainty to which the Suez Route, located in the Middle East is potentially more vulnerable. As far as port endogenous variables are concerned, it will be considered that internal efficiency will not differ greatly from competing Post-Panamax container terminals, with a higher degree of automation being achieved by virtually all deep water ports in Europe, becoming increasingly more capital intensive.
  12. 12. Hence, a brief prospective analysis for Sines Terminal XXI will be undertaken, based on the following variables: a) Exogenous; 1) Stage development of Atlantic Trade, between EU and America. This variable may assume a conservative level (I) and an optimistic one (II), the latter reflecting the creation of a Transatlantic Free Trade Area between the European Union and the USA and Canada. 2) Stage development of trade, between the European Union and the big economies of Far East Asia: conservative (I) and optimistic level (II). 3) Capacity of Portugal to capture foreign investment and trade flows from Brazil (or Brazil-related) and other Portuguese-speaking states in Southern Hemisphere: conservative (I) and optimistic (II). 4) Development of Rail accessibility. A conservative (I) level would consider no further development whereas an optimistic level (II) would contemplate not only completion of the Portuguese missing section providing a direct route to the Spanish border, but also full upgrading of the whole remaining route of Corridor 16, from Badajoz to Puertollano, the Center of Spain and beyond. 5) Fuel prices: a moderate increase (I) or a high increase (II), the latter bringing about a penalty on the Panama route from Europe to Far East Asia, relative to a shorter Suez- Indic route. b) Port endogenous variables 1) Expansion of TEU handling capacity: conservative (I), as it is, with Terminal XXI stabilizing at 1,5 Million per year or, optimistic (II), with the addition of a further 9 Million TEU capacity, enabled by the construction of the new Vasco da Gama Terminal. 2) Port congestion at closest competing terminals: low (I) and high (II). Many Scenarios, originating from combining Exogenous and Endogenous is possible to obtain, but only a restricted number of them, appear to be realistic. 8.1.Horizon 2014-2020 8.1.1. The “strangled” port scenario Exogenous variables, such as EX 1) EX 2) and 3) point at a lesser or greater intensity of trade flows across the Atlantic (North in the first case and South, in the second). Sines and its Iberian “hinterland” are more sensitive to the South Atlantic trade development, owing to the former colonies of each one of the Iberian States, who maintain a strong relationship with them. Should EX 1) and EX 3) be combined with EX 4) (Rail Accessibility) in level I, and Sines would not be prepared to challenge the role of harbours such as Algeciras and Valencia. Such a situation would relegate Terminal XXI to a mere Portuguese “hinterland”, and throws attention on one of the biggest present shortcomings of Sines as a planetary port scheme: absence of good rail connections, compounded by a political and institutional framework where port planning is completely apart from railway investment.
  13. 13. Such a scenario would be very adverse to Sines Terminal XXI, since the opportunity posed by the widening of the Panama Canal would bring about benefits which would fall entirely on competitors such as Algeciras, and particularly Valencia, which has excellent rail accessibility to Greater Madrid and other Communities in Spain (development of a through third-rail mixed-gauge (1435mm+1668mm from Barcelona to Valencia in 2016-20, would further increase the centripetal force, by extending both ports “hinterland” to regions of the Languedoc Roussillon) . The risk of such a scenario is real, since Portugal has no Rail Master Plan since it joined the EU in 1986, and quite simple schemes, such as 92 Km of new line from Évora to the Spanish border of Badajoz take years (if not decades) to materialize. 8.1.2. Terminal XXI challenging logistics hierarchy in Iberia Scenario If EX 4) (level II rail investment) were combined with EX 1) EX2) and EX3) in a level (II), of development of Rail Corridor 16, and also with the possibilities of Sines conquering part of the Madrid “hinterland” would be significant: congestion of Algeciras, Valencia and Barcelona (EN2 , level II) being possibly higher to reach, in the light of physical constraints posed by the location of any of these three ports. Sines Strategic Plan (Neptune Program, 2003), estimated as much as 887,000 TEUs per year, the container traffic originating (or directed) to the Comunidad de Madrid, with the completion of Corridor 16 within Iberia. This Scenario would imply a major political change in Portugal, directed at a new use for the package of Structural Funds (Cohesion Funds, FEDER and others, up to 21,000 Million Euros) to be awarded to the country in the period 2014-20. At time of writing, it is not known exactly what investment in transport infrastructure is to benefit an investment-starved rail system, compounded with the change of the internal political cycle, by 2015. Anyway, the 92 Km-long “missing link” allowing a direct rail connection from Sines to Spain (Comunidad de Madrid and Aragón), would require three years to build, and was evaluated at 222 Million Euros in 2011 (REFER, 2011). A quite similar time span would be required to fully upgrade and electrify (25 kV, 50 Hz) the conventional line, from Badajoz to La Nava de Puertollano (290 Km), along Extremadura and Castilla-la-Mancha Communities. 8.1.3. “Latinamericanization” of Terminal XXI Scenario Development of trade between Iberia and Far East Asia EX3) level I and level II (more intense) might have a moderate or small impact on Sines and other Iberian deep-water container ports, if by 2030 fuel prices are high (variable EX5, level II). In an extreme case, the Panama route, via the widened Canal, no longer would present a competitive alternative to the Suez-Indic route, with a reflection on lesser traffic being captured. Deep-water container ports in Iberia would be mainly directed to give a response to traffic flows between the Spanish and Portuguese economies, and those emerging ones which were former colonies: Castillian-speaking Latin America, on the one hand, and Brazil, on the other. 8.1.4. Terminal XXI on a congestion Scenario Such a Scenario might take place in either 8.1.2 or 8.1.3 variants, and basically would consist of EN 2) level (II) (congestion at neighbor Valencia and Algeciras competitors), without any major
  14. 14. extension to Terminal XXI, such as the proposed Vasco da Gama Terminal, being put into commercial service. In general, the larger scale of operation of Northern Europe deep-water container terminals might supplement the Iberian market, putting otherwise a greater pressure on existing (and congested) conventional Trans-Pyreneean rail links. Such a Scenario would call for a fast completion of, at least one of the phases (annual 4,5 Millon TEU capacity) of Vasco da Gama Terminal, hardly feasible before 2020. Figure 5: Possible development Scenarios for Terminal XXI (2014-2020) 8.2.Horizon 2020-2030 Development of Corridor 16 would experience a new role, with a generalized track gauge conversion of the conventional rail network (1668mm to 1435mm) in Iberia and Sines Terminal XXI would have been supplemented by a an extra annual capacity of 9 Million TEUs, offered by Vasco da Gama Terminal. Valencia port would increase its capacity up to 10 Million TEUs per year, following its Master Plan, by reclaiming sea land. Basically, there would be Iberian container terminals, both in Spain and Portugal, matching in magnitude and scale of operation, those located in Northern Europe. The patterns of World Trade by 2025-30 are difficult to foresee, but a Transatlantic Free Trade Area would certainly reinforce sea routes on the Atlantic, regardless of the Panama/Far East variable. Distribution of such traffic by European deep-water container ports would be far from uniform, and the capacity of a fully interoperable rail network to greatly change port “hinterland” is not absolute. The Pyrenée “border-effect” would certainly fade (but to what extent?). Languedoc-Roussillon and Aquitaine Regions of France might become target markets of Iberian harbours, if only the land distance factor is taken into account.
  15. 15. 8.3. Beyond 2030 All deep-water sea container terminals in Iberia, including Sines, would be linked to a conventional rail network with an enlarged capacity (double track throughout, enabling 750m-long trains without restrictions) and also without other capacity bottlenecks. The 40 Km-long Central Pyrenée Tunnel, from Zaragoza to Tarbes would be operative. But, on the other hand, an hypothetical bringing into use of an underwater Gibraltar Strait Tunnel, with provide a physical rail link to the Tanger Med Container Terminal to Iberia and mainland Europe. Such effect on the existing hierarchy of container ports and their respective “hinterland” remains, so far unknown. 9. Conclusions and Further research Sines Terminal XXI, or broadly, Sines deep-water container port, is susceptible to introduce the Portuguese territory into a non-negligible share of planetary logistics. The scope to which such target is achieved is however difficult to determine. The biggest shortcoming of Sines, as a container harbour lies in its so-far unsolved intermodal and rail accessibility based problem, despite its very attractive location and also full potential for expansion, provided by available land. Further research is required on port intermodality (prospective scenarios) using a cost-efficiency approach. The Comunidad de Madrid (or Greater Madrid) holds an important transatlantic trade with both Latin America and the USA/Canada, which, in the latter case is a candidate for further development and growth, with the eventual emergence of an “EURAMERICA” free-trade zone. Logically, being located within Spain, Algeciras and particularly Valencia sea container terminals are the prime theoretical beneficiaries of such trade flows. But their limited availability for expansion due to land scarcity may shift the balance to other ports, such as Sines, if RTE-T Corridor 16 is finally completed within Portugal and Iberia. A significant need of further research on Sines Terminal XXI will be necessarily focused on both the development of rail accessibility, particularly within Iberia. Such an aspect is crucial for a better understanding of the full extent of “hinterland” expansion and its respective effect on a new logistic hierarchy of the different Iberian Communities and their respective geo-economic spaces. The nature of exogenous variables determining attractiveness of a Far East Route via Panama in replacement of an Indic-Suez traditional one for Post Panamax vessels is complex, without a clear certainty of how fuel prices may evolve on a long-term basis. In such a case, however, Sines would be better positioned in the Atlantic, relative to its most direct Iberian competitors.
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