Latinports Newsletter September-December 2011


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Latinports Newsletter September-December 2011

  1. 1. September-December 2011Year 3, No. 3Container Management of London: Interviewto the Chairman of the Executive Committeeof Latinports, Richard KlienUltramar Group, Principal Port Operator ofChile, Enters LatinportsCepal Urges Significant Investments in PortInfrastructure in Latin AmericaSee more... See more... See more...Excellent Level in the Colombian and LatinAmerican Congress of Ports in Cartagena
  2. 2. CONTENTSSeptemberDecember2011TrainingLatinAmerican Port NewsMailUltramar Group, Principal Port Operator of Chile,Enters LatinportsLarge Shipping Companies Combine to ReduceCostsSuccess of the First Specialized Seminarof Latinports: Reactivation of UpstreamNavigation in the Magdalena River inColombia, a Country ProjectExecutive Director of Latinports Meetswith the Management Council of theAssociation of Terminals and PortOperators of MexicoExecutive Director of LatinportsRepresents LatinAmerica in the GlobalPorts Conference of LondonCepal Urges Significant Investments in PortInfrastructure in LatinAmericaExcellent Level in the Colombian and LatinAmerican Congress of Ports in CartagenaContainer Management of London: Interviewto the Chairman of the Executive Committee ofLatinports, Richard KlienEditorialDiseñoJulian Pinedawww.miroamarillo.comstudio@miroamarillo.comPortadaLogo of the Colombian andLatin American Congressof Ports on the Map of LatinAmerica.
  3. 3. September-December 2011SEditorialWe bid farewell to year 2011 and welcome 2012 withvery good news: After the success of our first Latin AmericanCongress held in Brasilia on August 2010, on the occasion of the 50 yearsof the foundation of the capital of Brazil, we would like to emphasizethe development in Cartagena during the first week of December ofthe Second Latin American Public-Private Port Congress and the FirstColombian Congress of Ports, jointly with the Superintendence of Portsand Transportation of Colombia. This public-private annual congress,developed to commemorate 20 years of the law of ports in Colombia, wasvery well welcomed internationally, as demonstrated by the participationof representatives coming from more than ten countries, including Japan,Holland and Spain. In addition, within our strategy of disseminationand training, we must mention the international event on navigation inthe Magdalena River held in September, the first specialized event ofmany to come (the excellent response received has encouraged us to startprogramming the next congress, this time in Mexico on legal security ofconcessions, date yet to be determined).Worth mentioning is also the acknowledgment received from Lloyd’sMaritime Academy and the Group Informa of London, through theinvitation to represent Latin America in the Global Ports Conference onemerging markets on December 1st; on this occasion our presentation dealtwith Port Investments in Latin America, presented before a large group ofEuropean investors and also from other parts of the world, which wasqualified by the organization of the event as “very informative and wellreceived”.Finally, and with great satisfaction, we have registered the affiliation toLatinports of the Ultramar Group of Chile that through its affiliateInversiones Neltume is the principal containers operator of that country,operating eight terminals. The affiliation of the Ultramar Group to ourassociation is a matter of great historical importance as Chile was thepioneer country in decentralizing and privatizing ports in Latin America, andUltramar the most important representative of such a successfultransformation.May this be the opportunity to wish all Latinports affiliates and the LatinAmerican port sector in general a successful 2012.Until the next!jpalacio@latinports.orgwww.latinports.orgJulian PalacioExecutive Director
  4. 4. September-December 2011EXCELLENT LEVEL IN THE COLOMBIANAND LATIN AMERICAN CONGRESS OFPORTS IN CARTAGENAOn the occasion of commemorating this year20 years of the law of ports of Colombia, whichin good time served to transform handling offoreign trade in the country, and coinciding withthe signing of the FTA with the United States, theLatin American Association of Ports and Terminals,Latinports, jointly with the Superintendence ofPorts and Transportation, conducted at the HiltonHotel of Cartagena on December 6-7, the FirstColombian Congress of Ports and the Second LatinAmerican Congress of Public-Private Ports, whichfocused on Good Practices in the Port Node.The event, co-sponsored by the port corporationsof Buenaventura and Barranquilla, was opened bythe Superintendent of Ports and Transportationof Colombia, Juan Miguel Durán, who wasaccompanied at the inaugural session by theChairman of the Executive Committee ofLatinports, Richard Klien, the former Minister ofPorts of Brazil and current Director of the NationalWater Transportation Agency, Pedro Brito, and theExecutive Director of Latinports, Julián Palacio.Focused on the Good Practices of the Port Node,the agenda was discussed in one and a half days,and on the opening, the Executive Chairman ofLatinports, Richard Klien, stated the following inrelation to this Second Latin American Congress:“The foundation of the Latin American Associationof Ports and Terminals just over two years waslooking for a backbone that would bring us together,and this challenge of public-private cooperationbecame a strategy to combine, not to face. This
  5. 5. September-December 2011is the reason that led me to accept being the firstchairman of Latinports.“Last year’s Declaration of Brasilia (conclusionsof the first public-private port event of Latinportsheld to commemorate 50 years of the creation ofthe capital of Brazil), which may be consulted onthe association webpage, gathers in a single sheetthese conclusions that diagnosed long-term portdevelopment, investments in infrastructure bothin the public and private sectors, multimodalityintegrating transportation logistics and public-privateassociations as promoters of the great challengesof the market, having in mind that investments ininfrastructure are for the long-term.“Fifty-five years ago a U.S. trucker transformedthe world with an idea: the container, although itsdevelopment only began to take force 30 years ago.This invention had a deep impact on general cargotransportation and encouraged closer relationsbetween governments and the private sector forinvestments worldwide.“Transportation price of consumer goods istoday a very small part of the price of productsand thus the success of the container mustalways be remembered as overwhelming. THECONTAINER IS RESPONSIBLE FORGLOBALIZATION.“The market of capitals and scale economy alsocaused a real revolution in the handling of grains atports.Pedro Brito, exministro de puertos de Brasil y director de la Agencia Nacional de Transporte Acuático; Juan MiguelDurán, Superintendente de Puertos y Transporte de Colombia; Richard Klien, presidente del comité ejecutivo deLatinports y de los consejos de administración de los terminales de contenedores Santos Brasil y Multirío; Julián Palacio,director ejecutivo de Latinports
  6. 6. September-December 2011“Our continent is young and has proven maturityand responsibility in the economic, financial, politicaland social fields. At our ports, the strong demandgenerated by a differentiated economic growth ofour region, imposes challenges to our governmentsand to our entrepreneurs. That is why I hopethis event has continuity, exchanging experiencesand discussing strategies to unite around real andeffective proposals, capable of promoting efficiencyalong the entire logistics chain that moves throughour ports”.The Superintendent of Ports and Transportation ofColombia, Juan Miguel Durán, upon declaring theopening of the event, stated the following in relationto the First Colombian Congress of Ports:“Today we are celebrating the First Congress ofPorts of Colombia with the participation of portcorporations and special guests, which shall be thefirst of many more we will have in our country. Thisis a space to exchange experiences and learn thegood practices of the ports of the world; we may beable to consolidate conclusions to better accomplishefficiency and competitiveness.“This congress coincides with a very special year forthe sector: 20 years ago was passed Law One, whichhas great significance as it determined decentralizingand privatizing ports in Colombia and the creationof the General Superintendence of Ports, today theSuperintendence of Ports and Transportation.“It is with great pride that the Superintendence seesthe good changes generated in these 20 years withinthe sector, extremely positive for the governmentand investors that believed in it. However, it is clearfor us that the success of this sector is based on thefact of being ever more competitive and that wemay be able to obtain these good global practicesand correct those that may not be the most efficientones.Chairman Executive Committee, Latinports Superintendent of Ports and Transportation
  7. 7. September-December 2011“We have great challenges, such as the free tradeagreements signed or about to be signed, whichare extremely valuable for Colombian economyand competitiveness. Ports have assumed this greatchallenge and with the investments and projectionswe have seen with good eyes not only resolve butfacts. That is why Colombia is being prepared tohave a drastic turn in its economy.“The Superintendence has especially focused onthe sector and we have been working with thedifferent port corporations (Sociedades Portuarias).This vision is not only Colombian but of the entireworld, where besides the port, the other actors ofthe chain are essential so it can be even better, withlower prices and maximized efficiency, being this inwhat we have been working at sector and regionallevels. Just sitting at the table with the SociedadesPortuarias, transporters, container yards, etc., wehave achieved important results as the willpowerand commitment of the sector exists to accomplishimportant results”.Presentations of the different lecturers mentionedbelow are available to all Latinports affiliates onwebpage www.latinports.orgMinisterio de Puertos de Brasil: AnálisisLogístico de una Política de EstadoMinistry of Ports of Brazil: Logistics Analysis of aState Policy- Pedro Brito, former Minister of Ports andDirector of the National Water TransportationAgencyGood Practices in the Port Node asDifferentiating Effect- Julián Villalba, Manager, Latin AmericanAssociation of Port Quality (AsociaciónLatinoamericana de Calidad Portuaria) (CAF-Valenciaport Foundation)- Joao Gilberto Campos, President, Instituteof Technical Professional Training, BrazilLogistics Activities Areas as Complement ofPort Activity- José María Langa, Director of LogisticsDevelopment, Port Authority of Valencia, SpainMultimodal Transportation: Effects of InternalTransportation of the International Logistics Chain- Jan Willem Koeman, General Director ofPharos, Holland- Alvaro Galli, Consultant Paraguay-ParanáWaterway, UruguayTendencias en el Transporte Marítimo: LargoCiclo de Negocios y Agitación a Corto Plazo- Ricardo Sánchez, Jefe de Infraestructura yPuertos, CepalSea Transportation Trends: Long BusinessCycle and Short-Term Turmoil- Hidefumi Ikeda, Special Investigator, Instituteof Ports and Airports Research, Ministry of theLand, Infrastructure, Transportation and Tourism,JapanBefore the end of the event, which was closed bythe Vice-minister of Infrastructure of Colombia,María Constanza García, there was an interestingdiscussion on the Latin American Port System,with the leadership of the Director of Latinports,Julián Palacio, and the participation of theExministro Pedro Brito
  8. 8. September-December 2011Superintendent of Ports and Transportationof Colombia, Juan Miguel Durán, the formerMinister of Ports of Brazil, and the Director ofthe National Water Transportation Agency, PedroBrito, the Chief of Infrastructure and Ports ofCepal, Ricardo Sánchez, the General Manager ofPursuant to the Declaration of Brasilia 2010, itwas found there have been significant advances inthe region during the last year, but there is still a lotmore to do to achieve the necessary competitivenessfor Latin American foreign trade. Below are theconclusions of the II Latin American Public-PrivatePort Congress held in Cartagena on December2011:Port Development:- The ports of the region require significantinvestments in infrastructure to have them readyto receive vessels up to 13,000 TEU, which operatetoday in the main sea routes of the world; this willrequire substantial financial contributions in worksto increase the capacity of terminals, especiallyregarding depth. However, if all ports must beprepared to receive increasingly larger vessels, caremust be taken on the magnitude of the investmentsto dredge because due to locations regardingtransshipment, and the markets regarding foreigntrade, mega-container vessels will only arrive to someports of the region.Sociedad Portuaria Regional de Buenaventura,Domingo Chinea, and the Director of Planning ofIntegral Port Management of Altamira, LeobardoRobles. Product of this debate and of previouspresentations was the Declaration of Cartagena2011, its conclusions transcribed below:DECLARATION OF CARTAGENA 2011Transportation Infrastructure:- The region has learned to confront externalvolatility, in particular the challenges of the financialand economic crisis now faced by some Europeancountries and the United States, but infrastructureand capacity development to meet challenges inthe long term is yet insufficient. According toCepal, infrastructure lacking amounts to aboutUS$170 billion per year up to 2020, which representmore than 5% of the region´s GDP, the mostrepresentative among them being transportationinfrastructure.Multimodality and Logistics:- Although important measures are being takenin relation to multimodality, basically regardingwaterways in countries such as Brazil and Colombia,the railroad sector still presents a considerable delay,and more attention should be given to this issue forthe sake of competitiveness. However, regardingintegral logistics, there is still much to be done, andfor this reason it is a topic to be seriously considered
  9. 9. September-December 2011Mayo - Agosto 2011
  10. 10. September-December 2011Domingo Chinea, Managing Director of Port Society of Buenaventura and Member of the ExecutiveCommittee of Latinports; Ricardo Sanchez from ECLAC; and Julian Villalba from CAFat the next annual congress of Latinports.Public-Private Association:- Worth mentioning is the approval by thecongress of Colombia of the Law of Public-PrivateAssociations, a scheme that in maximum 30 yearswill serve for the development of ports, airports,railway system and anything infrastructure-related;thus, the private sector will meet the economicincapacity of nations to substantially reduce itsretardation. This Colombian decision, already madeand successfully operating in other Latin Americancountries such as Brazil, Chile, Argentina and Perushould also be made by other Latin Americancountries coinciding with the motto of Latinports:Governments and private sector working togetherfor regional port logistics development.Particular Situation:- Recommendations of Eclac in relationto regional policies for ports, in particular, thedevelopment of cooperation mechanisms in afield of competence, were favorably welcomed,especially by the Superintendence of Ports andTransportation of Colombia that proposed its start-up as of the year 2012. Likewise well received wasthe approach of the Latin American Associationof Port Quality, also welcomed by the Colombianauthority that announced undertaking periodicalmeetings at the ports with the actors of the publicand private logistics chain to discuss the steps tofollow regarding guaranteeing service quality.
  11. 11. September-December 2011INTERVIEW OF CONTAINER MANAGEMENT OF LONDONTO THE CHAIRMAN OF THE EXECUTIVE COMMITTEE OFLATINPORTS, RICHARD KLIENContainer Management presents the impressive progress of the ports and logistics industries of Brazil throughthe eyes of Richard Klien, President of Santos Brasil and Multiterminais, and Chairman of Latinports.Richard Klien, Chairman of the Executive Committee of LatinportsBRAZIL HAS GOOD REASONS TO BEOPTIMISTICDESPITE THE GLOBAL PANORAMA OFTODAY’S WORLDBrazil only adopted the containers market as of theend of 1990, once the Law of Port Modernizationwas enacted by Congress in 1993. Once the PortAuthorities (Companhias Docas, controlled eitherby the federal or state governments) opened publictenders at a dozen public ports, resulted in thedelivery of 17 terminals of containers to privateoperators.In 1997, Brazil only operated 11 ship-to-shore (STS)container cranes in all its container terminals, butby the end of that year the number would increaseto 103 and by 2015 there will be in operationapproximately 150 of these cranes. “Output ofmodern STS cranes is of 30 movement/hourin more than 18-21 lines, whereas former cranesmanaged less than 20 movement/hour in 13 lines,”explained Klien.
  12. 12. September-December 2011mientras las antiguas manejaban menos de 20movimientos/hora en 13 filas,” explicó Klien.AMAZING PROGRESS AFTER PORTPRIVATIZATION: 1997-2011• Output has moved from 1m to 5.5mcontainers.• International commerce flow, which stoppedat US$100bn during almost a decade, will increaseat an estimate of US$480bn this year (althoughthe increase in price of commodities has played animportant role).• Economic opening (flow of internationalcommerce/GDP) increased from 12% to 25%during the period..• Private operators have invested more thanUS$4bn in the reconstruction, expansion, andmodernization of 16 public container terminals.• BTP (a joint venture between MSC and APMTerminals) is building a new container terminal atthe Port of Santos that shall have 1.1m more TEUcapacity, which equals one third of the port’s currentoutput.In fact, in 2010, growth of international commerceof Brazil, compared to 2009, was the highestworldwide, according to the World TradeOrganization, showing a growth of 38% in exportsand 34% in imports – more than the percentagegrowth of China.REGULATORY ENVIRONMENT:STRONG INSTITUTIONS SUPPLY THEBASES FOR A LONG-TERM GROWTHLeônidas Cristino, the new Minister of Portsappointed by President Dilma Rousseff, in hislecture during the Second Seminar of Ports andWaterways on September 22, 2011, emphasizedthe creation of the Secretariat of Ports (SecretariaEspecial de Portos – SEP) in 2007 as thedetermining factor for this exceptional performance.Pedro Brito, the first Minister of Ports of thecountry, started the regulatory framework withDecree 6,620 of 2008, establishing regulations forthe development of new public ports.Minister Brito used great part of the time in hisposition visiting all Brazilian ports and talking toeveryone, until he had a clear idea of the industryand of the bottlenecks of the system. He alsotraveled extensively abroad, interacting withgovernment officials, port authorities, and terminalmanagers of almost all container ports of the world,and also structured the Secretariat of Ports andpromulgated the National Dredging Plan.Having recognized the deficiencies in the originalprivatization tenders, which resulted in berths250m long, while new vessels surpassed 300m longand required longer and deeper dock walls, andSTS cranes with a greater reach, he also publishedthe policy promoting the expansion of existingterminals to accommodate the new generation ofsuper post-Panamax vessels arriving at Brazilianports.
  13. 13. September-December 2011Minister Cristino also emphasized on governmentinvestments of R$2bn (US$1,064bn) to deepenthe maritime access channels with resources ofthe Program for the Acceleration of EconomicDevelopment (Programa de Aceleraҫão doCrescimento – PAC).In the same Seminar of Ports and Waterways,Fernando Fialho, chief of the National WaterTransportation Authority (ANTAQ) revealedthat in 2010, 99% of exported tons and 90% ofimported tons were handled through ports, whichcorresponded to 85% of exports and 73% ofimports, respectively, FOB value. The total outputof Brazilian ports in 2010 reached 834m tons, ofwhich 22% are domestic shipments (cabotage), 59%exports, 15% imports, and 4% internal waterways.IN THE BEGINNINGAs a result of the liberation of Brazilian portindustries, a number of new companies haveevolved of which Multiterminais has emergedas one of the principal players. A complexorganization, Multiterminais may be easily divided intwo principal business areas, terminals and logistics,which include an increasing number of interests incontainer terminals, vehicle terminals, and dry docksin the interior.In 1986, when Brazilian ports were operatedby port authorities owned by the government,Multiterminais opened the first dry dock privatelyoperated as bonded warehouse (TerminalRetroportuario Alfandegado – TRA), next to Teconof Rio deJaneiro. There were stored full containers andpacked cargo in warehouses, which are deliveredto importers after being liberated by customs.Eventually, 95% of all container imports of Riogoing through these facilities and the company’s arevery well known in the states of Rio de Janeiro andMinas Gerais, natural area to collect unloaded cargoat the Port of Rio.When the Port Privatization Law was enacted in1993, Multiterminais participated in the tendersof two container terminals in Rio de Janeiro.Multiterminais was granted the Tecon 2 concessionin 1997 and then also the adjacent ro-ro terminal forvehicles, which are currently operated by MultiRioand MultiCar, respectively. Nowadays, the companyis owned by the Gavea Investment Fund and theKlien family.According to the company, Multiterminais operatesone of the most sophisticated logistics platformsof Brazil, being pioneer in the integration of portlogistics with the interior. “We supply the automotiveindustry a complete service ship-to-plant, just intime (JIT) and just in sequence (JIS). Clients havecomplete visibility in real time at any point of thesupply chain at an individual part-by-part level. Thisenables client to have a constant monitoring ofthe cargo flow along the entire supply chain and toreadjust production schedules as required”, statesKlien.
  14. 14. September-December 2011Most recently, Stahllog, an affiliated companyspecialized in Logistics and Port Services for thesteel industry has been engaged to unload importedcoal and load export steel plaques at the new privateterminal of the Thyssen Krupp-CSA plant inItaguai, in the Bay of Sepetiba.TECON SANTOSMultiterminais has participated from the start inthe privatization of the Port of Santos and TeconSantos was granted to the Consortium of SantosBrasil during the public tender that was held by theStock Exchange – BOVESPA – in 1997.The dock of the container terminal has a length of500m and the third berth of 250m was finished in2006, thus complying with contractual obligations.In 2010 an extension of 230m must be built – thusproviding a total dock length of 980m – enabling thesimultaneous berthing of three super post-Panamaxvessels. On some occasions, the adjacent berth of310m of the Terminal of Vehicles (locally known asTEV – Terminal de Veiculos), opened in 2006 andawarded the tender to Santos Brasil in 2009, operatescontainer vessels when not used for ro-ro (roll-on –roll-off) vehicle vessels.THE PORT OF SANTOS BECOMES NO. 1IN THE SOUTHERN HEMISPHEREIn 2010, the Port of Santos became the largestcontainer port of the southern hemisphere,according to Better Container Ports of the Worldof CM. This was mainly possible because of theinvestments for R$1,8bn of Santos Brasil in theterminal.The first STS cranes with double lift in the Americaswere contracted by Santos Brail and have beenoperating in Tecon Santos since 2010. Its twospreaders-collectors lift containers of 2 x 40 feet or4 x 20 feet, driving output in 35% per movements/hour/vessel in 2011.Despite the expected growth of 11% for 2011,productivity gains, and the termination of thedredging of the basin at the Port of Santos hasvirtually eliminated waiting times of vessels, andthe shipping lines have expressed their thanks forthe levels of performance. One million boxes willbe handled by Tecon Santos in 2011, while themaximum capacity of the terminal is estimated in1.45m boxes.TECON IMBITUBAIn 2008, Santos Brasil was granted the concessionto build a deep-water container terminal within thePort of Imbituba, which includes two docks for atotal of 660m with a depth of the side of 15m andan annual capacity of 700,000 TEU. Total plannedinvestment for engineering works and equipmentamounts to R$312m for 2012 and R$278m havealready been invested.
  15. 15. September-December 2011Multiple user facilities have placed priority onmooring container vessels; these are currentlyequipped with two gantry cranes ZPMC super post-Panamax, which have been added to the two existingmobile Gottwald cranes.SANTOS BRASIL LOGISTICA In November 2007, Santos Brasil acquired Mesquita,later called Santos Brasil Logistica, which has twoCenters of Customs and Industrial Logistics (CentroLogístico e Industrial Aduaneiro – CLIAS), locatedat the two margins of the estuary of the Port ofSantos.It also has two distribution centers, one in SãoBernardo do Campo and the other in Jaguaré, bothnext to the city of São Paulo.“Today we are using Santos Brasil Logistica asan extension of Tecon Santos, which has alreadyproven beneficial for our clients thanks to a moreefficient supply chain now applied to all cargomovements going through our terminal,” says Klien.At Imbituba, Santos Brasil Logistica offers cargoservices for port operation projects, general cargoport operations, filling and emptying containers,storage of general cargo and door-to-door logisticsservices.MARKETS JOIN TO PARTICIPATEIN BRAZILIAN INFRASTRUCTUREPROJECTSSeveral companies have profited of the enthusiastcontribution to the market of capitals indevelopment of the industries of ports/terminalsand cabotage in Brazil. Santos Brasil, the first portoperator of Brazil to launch its IPO (Initial PublicOffering – first public offer of shares), was a pioneerin the stock market of Brazil and obtained R$933mby flotation of its shares. Wilson Sons, Long-Inand most recently LLX Logistica have followed theexample by listing its shares in the BOVESPA/BMFStock Exchange.Comparing Tecon Santos of today with that of 1997 if both interesting and illustrative:
  16. 16. September-December 2011Santos Brasil, with a capitalization market ofR$3,15bn, is under the control of the OpportunityGroup through IMI (Investments in InternationalMarkets), of PW 237 Group, and Multi-STS andBrasil Terminais, property of the Klien family.In February 2010, Multi-STS started an arbitrationprocess to dissolve the corporation, but Klienemphatically refused to make any comments on thismatter because of the confidentiality agreement.“We expect an acceptable award for both parties inthe near future”, was all he said.The partner of Multiterminais, the GaveaInvestment Fund, directed by the former presidentof the Central Bank, Arminio Fraga, has given thecompany a clear growth mandate in the markets ofRio de Janeiro and Minas Gerais.THE FORMULA FOR SUCCESS: PUBLICAND PRIVATE COOPERATIONDuring the first Seminar of Latinports heldin Brasilia in August 2011, the authorities andbusinessmen discussed how to comply withthe increasing challenges of ports and logisticsindustries. “A consensus was reached on the beliefthat public interest may be better achieved if privateand government sectors work in close cooperation– long-term planning and focused on theircorresponding responsibilities,” says Klien.According to Klien, this exactly is what happened inBrazil. “SEP established policies, assured resourcesfor the PAC program of the federal governmentto dredge sea access channels and developed(in close cooperation with municipalities) thenecessary improvements for port land accesses.This encouraged private port operators to deepenand expand dock walls and berths and to increaseproductivity and storage capacity at containerterminals.”In September 2011, ANTAQ approved theexpansion plan presented by the Port Authority ofRio (Companhia Docas do Rio de Janeiro - CDRJ)to extend the four existing berths for containersfrom 250m to 400m each and add a second ro-roberth. Thus, the Caju dock will be extended from1,258m to 1,960m, creating the most extensivecontinuous dock for super post-Panamax vessels inSouth America.
  17. 17. September-December 2011ECLAC URGES SIGNIFICANTINVESTMENT IN PORT INFRASTRUCTUREFOR LATIN AMERICAaction shall see ports capacity quickly taken over.However, Prado also emphasized that this situationis an opportunity to give a technological andqualitative leap in Latin America, for the benefit ofport competitiveness and its logistics connections,making emphasis in the need to reformulate publicpolicies to reach a better planning and projectimplementation. Connectivity provided throughmaritime transportation services, correspondinglogistics operations and transportation costs“determine our products competitiveness”,stated the Deputy Executive Secretary of Cepal,who also considered being a key factor for socialinclusion because better services in transportationinfrastructure in all its phases improve quality oflife of the less favored sectors and of those that arefar from urban or productive centers. Accordingto Prado, “although the region has learned to faceexternal volatility, and in particular the challenges ofthe financial and economic crisis now being facedby some European countries and the United States,development of infrastructures and capacities toface long-term challenges is still insufficient”.On this matter, the Chief of Infrastructure andPorts of Cepal, Ricardo Sánchez, also referredto this during the presentation of the II Public-Private Congress of Ports of Latinports, held inCartagena in the month of December. To thataforementioned, Ricardo Sánchez made clear thatcare must be taken on the magnitude of dredginginvestments, because as a result of the location ofthe east-west route in relation to transshipment, andthe market in reference to foreign trade, the megacontainerships will only be arriving to some portsThe study of the Economic Commission forLatin America and the Caribbean launched inmid-October in Santiago de Chile at the AnnualConference of the International Association ofMaritime Economists (IAME), concludes thatports of the region require significant investmentsin infrastructure to be suitable to receive vessels ofup to 13,000 TEU operating today in the principalsea routes of the world, require substantial financialcontributions in works to increase terminal capacity,in particular regarding depth.In fact, the Deputy Executive Secretary ofCepal, Antonio Prado, stated that the maritimeindustry, ports and logistics services play an evermore critical role as development and insertioninternational facilitators of Latin America, warningthat infrastructure deficiency is of the order ofUS$170bn per year until 2020, which represents 5%of the region’s GDP. Consequently, lack of
  18. 18. September-December 2011hardly any trains, stated Notteboom, who also addedthat “this type of system makes it more difficultto create dry docks where may concentrate thelogistics companies for the development of a typeof logistics system”. To improve competitivenessin the maritime transportation world market, LatinAmerica requires starting to consider ports as a partof an integrated system, instead of concentratingin developing each port individually, concluded theexpert.Latin America requires a new approach in relationto the internal logistics in order to compete withinthe international sphere, stated to BNAmericasTheo Notteboom, President of the InternationalAssociation of Maritime Economists (IAME).Whereas the region is making great efforts topotentiate port capacity, initiatives tending tostrengthen ports of the areas in the interior of thecountries have been forgotten. Most Latin Americancountries depend greatly on truck transportationto connect with the interior regions and there areof the region, although all its ports must be preparedto receive ever larger vessels, proportionately to thesize of their markets.Latin America Needs a New Approach inRelation to Internal Logistics: President ofIAMETheo Notteboom,President of IAME
  19. 19. September-December 2011Through its affiliate Ultramar InversionesNeltume, the principal containers operator ofChile, the Ultramar Group entered Latinports onChristmas Eve; thus this country, pioneer in portdecentralization and privatization in Latin America,becomes a symbol within our Association.Through Inversiones Neltume, the Ultramar Groupundertakes the operation and development of thebusiness of ports, and also the integral logisticsprojects of support to large mining, industrial andenergetic developments in Chile and Latin America.Its eight (8) Chilean terminals (Terminal SouthPacific, Terminal Port Arica, Port Angamos, PortCoronel, Port Mejillones, Terminal Mejillones,Terminal Graneles del Norte and the recentlyconcessioned Port Terminal Coquimbo) move morethan 20 million tons of cargo, including more than1.2 million TEU. Montecom operates abroad inMontevideo, Uruguay.The General Manager of Ultramar InversionesNeltume is Melvin Wegner and the Manager of Development, FernandoReveco freveco@ultramar.clULTRAMAR GROUP, PRINCIPALPORT OPERATOR OF CHILE, ENTERSLATINPORTS
  20. 20. September-December 2011the “Company of the Year” by the Lloyd’s Listin ceremony that took place on September 20 inLondon.The French line CMA-CGM announced inNovember an Alliance with the MediterraneanShipping Company MSC, its object being to face theexcess capacity of traffic between Asian, NorthernEurope, South African and South American routes.Following the world crisis, commercial exchangehas declined, pressing down maritime freights, heexplained, affirming that the cooperation is in favorof “operational synergies”, without mentioningmergers or acquisitions. Additionally, the cost of fuelincreased 40% in November 2011 compared to thesame month of 2010, according to market figures.Information shows that the agreement will start inMarch and initially shall be for two years. Altogether,MSC and CMA CGM shall have a fleet of 3.6million TEU, overcoming the 2.5 million TEU ofthe leader of this industry, Maersk. In number ofvessels, the agreement between MSC and CMA-CGM will total 877 ships, against 654 of Maersk.This association implies a vigorous cost-cutting plan,the goal being to cut US$400 million annually.The CMA CGM group was acknowledged asLARGE WORLD SHIPPING LINES COMBINE TOREDUCE COSTS: MSC AND CMA-CGM ENTER AGLOBAL COOPERATION AGREEMENT
  21. 21. September-December 2011This event was attended by three internationallecturers of the highest level, one of themthe General Director of the National WaterTransportation Agency of Brazil, Fernando Fialho.With the room full, presentations of foreignlecturers and national experts were excellentlyreceived and subject of the most interestingdiscussions, thus leaving the clear conviction of greatpossibilities for the Magdalena River to becomethe principal artery of Colombia, both from thetechnical-operational and economical-financialviewpoint. Below you may find the conclusions ofthe presentations of each of the lecturers:Tim Stater, Economic Counselor of the Embassyof the United States: Informed of the grant ofthe government of the United States to SociedadPortuaria Multimodal del Río Magdalena for thefinal studies that concluded with the viability of theproject, and states the government of the UnitedStates was willing to continue supporting the project.Fernando Fialho, General Director of the NationalWater Transportation Agency of Brazil: He showedwhat has been done by Brazil in waterway matters,where at present river transportation represents 13%of the total (compared to almost 0% in Colombia)and the decision of its government to reach 29%in 2025; at that time this mode of transportationmust represent the same percentage as road andrailroad transportation, in order to basically facilitateproviding productivity to the impoundment ofgrains.SUCCESS OF THE FIRST SPECIALIZED SEMINAROF LATINPORTS: REACTIVATION OF UPSTREAMNAVIGATION IN THE MAGDALENA RIVER INCOLOMBIA, A COUNTRY PROJECTFernando Fialho, General DirectorNational Water Transportation AgencyBrazil
  22. 22. September-December 2011Rob Davinroy, Director of the ApplicationCenter of Waterway Engineering of the Corps ofEngineers of the Army of the United States in St.Louis, Missouri, and Principal Consultant for CDGEngineers: Mr. Davinroy, as part of the team thatat the time of the conference was finishing thefeasibility study for channeling works to increasethe upstream depth to 6 feet, stated that thepresent situation of the Magdalena River upstream,regarding depth, is the same of the Mississippi River150 years back, but with an advantage: Colombia hasoil as basic cargo for a successful take-off, which wasnot the case of the Mississippi river at the time.Alvaro Galli, Uruguayan Consultant expert in theParaguay-Paraná waterway: As part of the team thatdeveloped the final study that resulted in the viabilityof the port and navigation project to and from thecenter of Colombia, he emphasized on the greatpossibilities of such project, with the advantage thatunlike the Paraguay-Paraná waterway, developmentof navigation in the Magdalena River implies easierdecisions as it depends on only one country, whereasthe great waterway south of the continent involvesfive countries. With all the difficulties implied for anagreement between five Latin American countries,in less than 20 years as of the creation of the RiverTransportation Agreement for the waterway ofthe Paraguay and Paraná Rivers in 1992, cargomovement moved from one million tons to 16million tons in 2010. In addition, he showed how thecountry with the largest fleet is Paraguay, upstreamof the waterway, where it has the lowest depth.Jorge Enrique Sáenz, Manager of EmdepaConsultoría de Colombia: A consultant withmore than 36-year experience in studies of theMagdalena River, presented an educational lecturecalled Myths and Realities, by which it destroyedall the myths that existed on the impossibility ofhaving an important upstream navigation, furthershowing the great difference in costs compared tonew roads, railroads and pipelines. He also madea comparison with the Mississippi River showingConsultores y conferencistas Jorge Enrique Sáenz (Colombia) y Alvaro Galli (Uruguay), enlos extremos, y Paulino Galindo, asesor técnico de Cormagdalena, en el centro.
  23. 23. September-December 2011how the Mississippi upstream and downstreamhad 4.5 feet in 1875 (where we wish to arrive atin 2012 in the Magdalena River), to 6 feet in 1990(what the Colombian Government expects toarrive at in two year time according to decision ofthe board of directors of the competent authority,Cormagdalena), and to 9 feet (which President ofColombia, Juan Manuel Santos hopes to achieve bythe river concession called “the large project”, with apublic-private association which is being structuredand is to be awarded prior to the end of the presentadministration, in 2014).Edgar Higuera, Executive Director of the Chamberof Large Users of Logistics Services of the ANDI(Asociación Nacional de Empresarios): In avery interesting presentation he showed how themultimodal node Puerto Salgar-La Dorada, locatedin the center of the country, has the basic conditionsrequired for inter-modality, and within the possiblenodes of multimodal integration detected by arecent study of the Ministry of Mining and Energy,called Integrated Infrastructure of Multimodal andLogistics Transportation for the Development ofthe Mining Industry in Colombia, the Puerto Salgar-La Dorada node, within the options studied in theMatrix of Physical Aptitude of the Potential Nodes,is the only one that, once the operation upstreamreactivates, would meet all requirements, basically asit has a railway intersection.As a result of the above, the Minister ofTransportation reiterated the wish of the Presidentof the Republic in the Project, creating a reducedpublic-private follow-up committee of which is partthe Executive Director of Latinports, Julián Palacio,to help in promoting in the shortest time possible,the following:Short Term: A minimum permanent draft of 4.5feet upstream (250 km), tender that was closed inDecember to develop works in 2012, thus an earlyoperation may be started by the end of 2012 orbeginning of 2013.Short-Medium Term: Managing regional andnational resources to make a minimum permanentdraft of 6 feet in the same stretch aforementionedthrough channeling works, procedures that up tothe completion of works would last two years. Asresources are expected to be obtained in December,this new phase would be operative in the firstsemester of 2014.Medium-Long Term (river concession from thefirst navigable port in the center of the country,Puerto Salgar, to the mouth of the river inBarranquilla/Cartagena, guaranteeing a minimumpermanent draft of 9 feet by means of channelingworks): A public-private, mostly private corporationwill be established, to be responsible not only ofchanneling and maintenance works of the navigablechannel, but also of the development of the basinin all its fronts. This project must be structured, andtender opened and awarded in 2013.
  24. 24. September-December 2011EXECUTIVE DIRECTOR OF LATINPORTS MEETS WITHTHE MANAGEMENT COUNCIL OF THE ASSOCIATIONOF TERMINALS AND PORT OPERATORS OF MEXICO(ATOP)PUpon the invitation of the new President andExecutive Director of ATOP, León Fregoso andJaime Aguilar, respectively, the Executive Director ofLatinports, Julián Palacio met during the last weekof October in Mexico D.F. with the managementcouncil of this association in full, during whichtime was discussed the interest of the associationof holding in 2012 a specialized seminar on themodification of the law of ports in this country,and also the postulation of Mexico as host of theIV Latin American Public-Private Port Congress in2013, to be jointly held with the Annual Congressof ATOP. This coincides with the Presidency of theExecutive Committee of Latinports that will be nextyear in the head of its present Vice-president, ArturoLópez, founder of the Association of Terminaland Port Operators of Mexico, ATOP and alsoPresident of Altamira Port Terminal.ATOP, one of the greatest promoters of Latinports,has defined as its main purpose since its creation 15years ago to safeguard and promote the interests ofits affiliates, by means of different tasks that go fromthe institutionalization of a permanent forum toexchange experiences, knowledge and disseminationof the best entrepreneurial practices for thesector at international level, up to the preparation,management and lobbying of laws and regulationsapplicable to the port activity, among many otheractions towards the consolidation, strengtheningand development of its companies. In matterof legislation, the association recently prepared aproposal for the modification of the Law of Ports,its contents currently being debated in the Congressof the Union.In its relationship with port authorities, ATOP isacknowledged as speaker of the sector of terminalsand port operators, validated by the representationgranted by 40 terminals of the country affiliated tothe organization and operation of container cargo,agriculture grains, minerals and liquids, generalcargo and cruisers. At the present national occasion,ATOP is convinced that the joint, coordinated andconsensual action of companies, authorities, serviceproviders and other actors of the port community,constitute the best policy to find solutions for theproblematic now being faced by the sector andrepresenting an equal challenge for all.
  25. 25. September-December 2011The Executive Director of Latinports, Julián Palacio,represented the region in this industry-leaderevent with a conference on “Investments in LatinAmerican Ports”, organized annually by InformaMaritime Events in association with Lloyd´sMaritime Academy. In this event, held on November30-December 1st in London, principal actors of thesector discussed the last developments in emergingmarket investments, global trends and infrastructureconstruction, which served to obtain answers to keyquestions that define the sector of ports worldwide,such as global port sector trends, the changing phaseof shipping lines, the increasing markets and theiropportunities, and investments in Latin Americanand African emerging markets.Regarding the conference of the ExecutiveDirector of Latinports, the panel was sharedwith Patrick Verhoeven, General Secretary ofESPO (European Seaports Organization), andwas focused to the opportunities Latin Americarepresents as an emerging region, unique in theworld that (quoting Moisés Naím, expert of theProgram of International Economics of theCarnegie Endowment for International Peace ofWashington), “has known how to navigate throughthe world crisis without derailing, to handle itspublic finances with caution and also has knownhow to regulate its banks”. The producer of theevent, Shelley Bullen, stated the conference ofJulián Palacio “was very informative and very wellreceived”.EXECUTIVE DIRECTOR OF LATINPORTSREPRESENTS LATIN AMERICA IN THE GLOBALPORTS CONFERENCE IN LONDON
  26. 26. September-December 2011TrainingNew Era for Infrastructure Investments in theAndean Region and Central AmericaThe Andean region and Central America showimportant investment opportunities for large-sizeinfrastructure projects.Regional governments are supporting privateinvestment as never before. New laws andregulations, in addition to existing modifications,have been approved to render a safe return toinvestments in energetic, social, transportation andwater infrastructure.The scenario for opportunities is now more suitablethan ever. Do not miss this great opportunity toparticipate where the opportunities to be discussedwill forge your business for the years to come.The executive director of Latinports, JuliánPalacio, will participate in a round table onPort Infrastructure and Sea and WaterwayTransportation with a conference on theWaterway Project of the Magdalena River.To obtain more information please contactAndrea Briones /(+562) 9410450Bogotá, 28th and 29th of March, 2012 May 21- 25Hotel Riu Plaza, PanamaMaritime Week Americas 2012 will take place inPanama, one of the most important maritimecenters of the world and core of some of themost interesting changes that will impact world’snavigation, and ports and bunkering industries.The executive director of Latinports, JuliánPalacio, will participate in a lecture on Post-Panamax Vessels Economy: Will the LargestSurvive?, and will be the moderator of theSession of the Regional Ports Round Table:Challenges in an Uncertain World.For more information on this event please clickon or
  27. 27.
  28. 28. September-December 2011Latin American Port NewsArgentinaNegotiation for Extension of Concessions inBuenos AiresAccording to Container Management, theconcession to Hutchison of the Buenos AiresContainer Terminal Services SA (BACTSSA)for Terminal 5 expires in 2012, while that of theDP World (Terminal Rio de La Plata) and ofAPMTerminals (T4) will expire in 2019. Untilnow there have been little signs of progress onthe decision if these concessions will be renewedand when, greatly as a result of an ongoing disputebetween the federal government and the city ofBuenos Aires on which will have jurisdiction onthem. The insecurity inherent to the deadline ofthese concessions has caused these terminals not tocontinue making any significant investments at theirfacilities. However, according to CM, a temporarysolution has been reached by signing an extensionof the concession of BACTSSA for a term equalto 20% of the original 18-year concession, whichapparently is allowed by the original agreement.According to the above, the final conditions willsupposedly be known very soon.TECPLATA Foresees Starting Operations theSecond Semester of 2012Implementation of the first phase of theTECPLATA project of International ContainerTerminal Services ICTSI, at the mouth of La PlataRiver, 60 kilometers from Buenos Aires, is on trackas informed by Container Management. This phase,with two 600-meter docks, 10.4 meters deep and aUS$234 million investment, shall have capacity for450,000 TEU and will be in operation in August2012. The second phase foresees 220 additionalmeters of dock for a total of 820, which shall enablehandling one million TEU. Total investment isestimated in US$370 millions.BrazilOdebrecht Participates in the Expansion of thePort of MiamiAccording to the Miami Herald, the US affiliateof the Brazilian construction company is startingimprovement works at the port of Miami. Budgetfor these works is estimated in US$57 millions, and
  29. 29. September-December 2011Secretary of Logistics and Transportationof the State of São Paulo Announces theConstruction of a Tunnel Joining the Port ofSantos to GuarujáSeveral newspapers announced that themunicipalities of the Baixada Santista will be grantedinvestments for almost US$1 billion from the stategovernment for the construction of a 900-meterprefabricated tunnel between Santos and Guarujá,for truck transit, which had been discarded in theproject of the suspension bridge. Estimates arethat the new structure will be inaugurated in 2016.The Secretary Saulo Abreu explained that the drybinding will have a capacity for truck movement anddid not discard the proposal of the bridge from theCouncil of Port Management (CAP): “We are notsaying that the other suggested route, upon futureport growth, is not important. This option benefitsthe port area and will decongest a very large trafficof vehicles to Santos (seven thousand daily) thatwould make it intransitable”, he clarified. However,according to Folha, the project does not meet thedemands of Companhia Docas do Estado de SãoLatin American Port NewsPaulo, CODESP, or of the companies operating inthe port. “We are going to accelerate actions for asecond connection” said Sérgio Aquino, presidentof the CAP of CODESP and Secretary of Ports ofthe State of São Paulo.Tribuna interviewed the President of the CAP ofCODESP and Secretary of Ports and Sea Mattersof the Municipality of Santos, Sérgio Aquino(candidate for Mayor of the city), who emphasizedthat for him the Chinese model shows theimportance generated by Brazilian ports of a newregulatory framework towards the modernizationof port management, and thus, guarantee thedynamics required of the sector by the market.“The infrastructure is the one that will generateopportunities for the growth of a country”, statedthe high official, who added that “no countrywanting to become a competitive and developedcountry may achieve this without infrastructure”.Aquino concluded stating that China has beenillustrating this from some time now, showing it isserious in matters of infrastructure in all its aspects.President of the Council of Port Management,CAP, of the Companhia Docas do Estado deSão Paulo Defends Regulation on the Model ofManagement and Portsworks include steel and concrete reinforcement ofthe berthing docks structure prior to dredging theport the beginning of next year. Depth will passfrom present 14 meters to almost 16.5 meters.
  30. 30. September-December 2011Plan of Unasur Included Railway betweenParanaguá and AntofagastaBased on the information supplied by the System ofEnterprises SEP, the firm Ultramar was awarded theconcession of the Port of Coquimbo –for 20 years,Folha informed that the 12 Ministers of Planningof Unasur (Union of South American Nations)launched in Brasilia a new plan for the integration ofregional infrastructure, with 31 priority projects forthe next ten years, including 88 works among whichChileUltramar Group Obtains Concession of Port ofCoquimboLatin American Port NewsAn article of Tribuna informs that the Minister ofPorts received in December the representativeof the IBRD in Brazil to discuss proposalsand investments of the group in the sector ofBrazilian transportation. According to the article,the executives of the bank targeted cabotage asa form to integrate the transportation systemsfor the existing cargo in the country. At the sametime, the Singapore Group visited the ports ofSantos, Vitória and Itajaí, looking for informationon the development of an integrated system thatwould served as support to the PIC of the SpecialSecretariat of Ports, SEP. The idea of SEP is thatSingapore may cooperate to change the scenario ofBrazilian ports, for which a final study is expected inthe first quarter of 2012 with the solution proposal.Works will include the complexes of Santos, SãoSebastião, Porto Alegre, Itajaí, Mucuripe and Pecém(these two in Ceará), Suape, Rio de Janeiro, Vitóriaand Manaus.Project of Incentive of Cabotage (PIC)are waterways, railways and road transportationlines, at a cost of US$16 billions. The project ofgreatest interest for Brazil is the construction of tworailway lines to join the ports of Paranaguá, Brazil,and Antofagasta, Chile. João Mendes, responsibleof this matter at the Ministry of Foreign Relationsof Brazil stated that the focus of the Program ofStrategic Action of the Council of Infrastructureand Planning of Unasur, shall be different to theIIRSA (Initiative for the Integration of SouthAmerican Regional Infrastructure), as instead ofproduct export corridors leaving the subcontinent,the internal development of the region shall beprivileged.
  31. 31. September-December 2011To face the boom of exports of Latin America,so-called by Container Management, MaerskContainer Industry MCI is building a new plant forrefrigerated containers in San Antonio, amountingto US$170 millions, the first of its class in the region.Programmed to be operative by the end of 2013,and with an annual production capacity of 40,000containers, the new plant will create 1,800 new jobswithin the area.More extensively, the company states this plantwill help correct the refrigerated trade unbalance,affecting exporters of fresh products (fish andmeat) of the west of South America, which annuallyshows tens of thousands of empty containersloaded in Asia and other parts. The new plantwill complement production of the MCI plant inQingdao, China, which is now being expanded.Maersk Builds the First Plant for RefrigeratedContainers in Latin AmericaLatin American Port Newsextendible to 10 more–, after being the only operatorthat presented offers for the terminal of the FourthRegion, despite the 12 conglomerates that acquiredtender specifications. The company committedinvestments for US$80 millions, with which it willadd 25,000 square meters to port tasks. Amongother works, a passenger terminal will be built.Likewise, equipment for transferring fruit of theregion will be renewed and a new site for berthingof grains will be constructed, besides building a lastgeneration negative pressure warehouse of 6,000square meters.Ultramar will receive the port between May andJune 2012, and estimates are that the constructionprocess will extend for a 30-month period, alignedwith tender specifications, as informed the company.Melvin Wenger, General Manager of InvestmentsNeltume, corporation through which Ultramardevelops port management, stated that “it is a greathonor for us and an immense responsibility todevelop the project we have planned for the Port ofCoquimbo. Our objective is to provide the city witha complete terminal, harmonizing and adequatelypotentiating cargo activities and passenger cruisers”.Two million tons are expected to be moved inthe next five years and for the end of the tenderperiod this amount will be four million tons. It isrecalled that during 2010, 168 vessels made landfallat the Port of Coquimbo and 396,121 tons weretransferred.
  32. 32. September-December 2011SCF Marine, the operative unit of the division ofInland River Services of Seacor Holdings Inc.,purchased the majority of shares of the Colombiancompany Naviera Central, thus becoming animportant player in the reactivation of the navigationThe idea is to concentrate them getting them closerto the river through the ports of Puerto Salgar andPuerto Berrío (Antioquia), and to transport productseconomically to the ports of the ColombianCaribbean coast, allowing them to export at“better prices”, stated the Executive Director ofCormagdalena.Today, the Magdalena River transports 2% ofthe national cargo that is, basically, oil moved byEmpresa Colombiana de Petróleos, Ecopetrol, fromBarrancabermeja to Cartagena (2 million tons).The goal is to move transported amount by theriver to 6 million tons in 2014, thus cargo currentlytransported will be tripled. “Entry of the FTAwith the United States will make possible that moremerchandise, both imports and exports, may bemoved by the great national route of Colombia”,emphasized the Executive Director.SCF Marine Inc. of the United States StartsOperations in the Magdalena RiverLatin American Port NewsIn December was awarded the contract forMaintenance Works to Deepen the Navigable Canalin the Magdalena River, in the stretch betweenPuerto Salgar (Cundinamarca) and Barrancabermeja(Santander), equal to 256 kilometers in the centerof the country, to be executed in a term of twelvemonths. Dredging must guarantee a depth of 4.5feet (1.37 meters). The Executive Director of theCorporación Autónoma Regional del Río Grandede la Magdalena, Cormagdalena, Augusto García,stated that the goal is for the Magdalena River to benavigable 365 days of the year with a depth of 6 feetfrom Puerto Salgar to Barrancabermeja, and 40 feetat the Access Channel of the Port of Barranquilla.The Executive Director of Cormagdalena statedthat upon the initiation of these works fulfills theGovernment Plan of President Juan Manuel Santosof making the Magdalena River the great routeof the country, enabling competitiveness to theColombian entrepreneur, helping to reduce costsby using waterway transportation. “We owe a debtto Colombian entrepreneurs by not offering a routeallowing them to transport products at low costs.ColombiaWorks Start for the Magdalena River to Becomethe Principal Transportation Route of theCountry
  33. 33. September-December 2011Colombia’s deficient physical infrastructure,altogether with the low human capital and strictlabor markets are hindering productivity of thecountry and limiting its growing capacity, accordingto a report of Standard & Poor’s (S&P). “The recentfree trade agreement will decrease or abolish importtariffs, but will not alleviate high transportation costs,which are a considerable barrier for Colombianexports”, states S&P. IDB studies show that costto transport Colombian products to the USA,expressed as part of the value of exports, exceededthe cost of paying import tariffs to the Governmentof the USA prior to signing the bilateral free tradeagreement in 2006.Despite the strong political support and fundingavailability, Colombia has faced problems byimplementing ambitious infrastructure projects,said the credit risk agency, although public sectorinvestment has picked up recently thanks to thestrong support of President Juan Manuel Santos.Some of the measures supported by presentadministration have been the creation of the Agencyof National Infrastructure (ANI), which replacedthe Institute of National Concessions (INCO).“This maneuver reflects the need to overcomedelays in the implementation of public-privateassociations, especially in transportation projects,and approaches corruption accusations of previousprojects”, stated S&P. To develop even more thefinancial markets and infrastructure, Colombianeeds a better project design and a more effectiveimplementation, which shall enable local pensionfunds to invest in infrastructure, according to thecredit risk agency.Deficient Infrastructure Hinders Productivityand Growthin the Magdalena River to and from the center of thecountry, which the national government is currentlydetermined to achieve. SCF Marine is one of theprincipal shipping lines operating dry and liquid cargoin the Mississippi River and its tributaries, where itcontrols 1,200 barges, as well as the Paraguay-Paranáwaterway.The Minister of Transportation, Germán Cardona,-altogether with the President of the Agency ofNational Infrastructure, Luis Andrade- explainedthe principal benefits the country will have with theCongress of the Republic Passed in Decemberthe Law of Public-Private AssociationsLatin American Port News
  34. 34. September-December 2011Latin American Port NewsCosta RicaAPM Terminals Signs Construction Contractfor the Terminal of Containers of MoínCaptain Paul J. Galli, General Director of APMTerminals Moín, recent concessionaire of theterminal of Moín for 33 years, informed in Panamaduring the TOC Americas in November that ithad just signed with CH2MHill of the UnitedStates (company recently acquired by Halcrow ofLondon), the construction contract, thus denyingrumors that project development was delayed, whichis considered the largest infrastructure project inCouncil of Economic and Social Policies) to beanalyzed by the economic authorities of the Nation.“We expect many national and international playerscoming to invest in Colombia; this scheme shallserve for the development of ports, airports, railwaysystems, and anything related to infrastructure.This is a scheme that Colombia needed and that inother countries is in operation”, concluded Law of Public-Private Associations – PPA,passed by the Congress of the Republic. Cardonaconfirmed that the PPA Law will serve for roadinfrastructure works and also to build prisons,schools, hospitals and aqueducts, among others. “Wewish to benefit not only the National Governmentbut also the Offices of Mayors and Governors,so private investors may also make proposals toterritorial entities”, assured the Minister.The project has two components: One, the PPAwith public resource contributions, which may notsurpass 20 percent of project value. The individualmust present a detailed proposal to be studied bythe Agency of National Infrastructure, and if sodecided, the Agency will open a tender where anyperson may participate, “but bidder entering theinitial proposal shall have an advantage in pointsbetween 3 and 10%. If another bidder improves theoriginal offer, the first may improve it in 10 days. Ifthis is not done and bidder withdraws, a value willsimply be paid for the original offer”, complementedthe Minister. The other component is when theinvestor makes a proposal without requestingpublic resources, that is, 100% private capital; in thiscase, the Agency will be in charge of analyzing thepossibilities to develop the project.Another advantage offered by the PPA schemeis that a private investor offering the NationalGovernment to execute the works must also operateit and maintain it during a certain time, thus obligingthis investor to prepare exact studies and designs sothis operation and maintenance will not generateextra costs on his behalf. The maximum term forpublic-private associations will be 30 years, but ifthe project does not accomplish financial closureduring this time, it will go to the CONPES (National
  35. 35. September-December 2011foresees that the concession will be awarded twomonths after specifications have been uploadedto the portal, and after the subscription phase forcontracts, the government estimates that the entireprocess will be concluded by the middle of the year,when the port will be operated by private parties.Until now, the concession analyzed is for 20-25years, but potential investors consider it is shortand suggest 30 years or more, with an investmentof more than US$100 millions. Up to now thereare five international consortiums interested in theconcession, including three Chinese firms, oneBrazilian consortium and one Chilean consortium.Originally programmed to be launched inNovember and awarded in January, the initiativepoints out transforming the port in a logistics polefor the Manta-Manaus corridor and increasing thecapacity to 3 million TEU per year for 2030. As maybe remembered, in 2006 the concession of the portof Manta was granted to Terminales Internacionalesde Ecuador (TIDE), controlled by the firm withregistered office in Hong Kong, Hutchison PortHoldings HPH, for a 30-year term. However, inFebruary 2009, Tide withdrew from the concessionand accused the authorities of undergoing unilateralmodifications to the contractLatin American Port NewsEcuadorPuerto de Manta will be tendered in Early 2012all the history of Costa Rica. On the other hand,Captain Galli stated that “some of the ports ofthe region are 20 year back and are now paying theprice”, and gave Costa Rica as example, which hasone of the highest tariffs of the region as a resultof inefficiency. Captain Galli added that to improveefficiency APM Terminals is investing almostUS$1,000 million in Moín, including US$124 millionin the construction of a 1.5 kilometer breakwaterto enable all year round operation, US$192 millionto dredge 500,000 cubic meters and US$344 inequipment. During the first phase of the project,the terminal will have 600 meters of dock dedicatedto containers with 6 STS post-Panamax cranes and40 hectares of yards, and the depth of the channeland surroundings will be 16 meters. In the finalconstruction phase, the terminal will have 1,500meters of docks, 80 hectares of yards, and a depthof 18 meters. Operations are foreseen to start in2015.According to Business News Americas, the state-owned Port Authority of Manta – APM – expectsto open and award in the first quarter of 2012 theconcession of a project that aims to modernizeand expand the port, and for this reason theyare completing details related to the biddingspecifications in order to upload bidding bases to thepublic acquisition portal in January. The APM
  36. 36. September-December 2011Latin American Port NewsEl Salvador MexicoMexico requires investing approximately US$38,000million in transportation infrastructure during thenext six years, including ports, stated Jorge de laMadrid of the School of Civil Engineers of Mexico(CICM, in Spanish), during the presentation of anew proposal for the national infrastructure plan of2013-2018, highlighted by Business News Americas.Regarding port infrastructure, the questionedconstruction of the Punta Colonet Port, at thenorthwest of the country, is still in the agenda, aconcession foreseen for 45 years. Although theSecretariat of Communications and Transportationincluded the project in the national infrastructureplan for the years 2007-2012, with an original budgetof US$3,700 millions, it could not be tenderedduring the present administration. The proposalsof CICM in relation to ports include continuing theexpansion of Port Lázaro Cárdenas, located in theState of Michoacán.According to Container Management, the Congressof El Salvador passed a new law in Septemberthat was subsequently ratified by the President ofthe Republic for the concession of the Port ofLa Unión, at the Gulf of Fonseca, to a companyspecialized in the operation of sea terminals. TheInternational Finance Corporation (IFC) hasbeen engaged by the government to cooperate inthe preparation of the project, find investors andadvise in the transaction. According to EnriqueCórdova, President of the Autonomous ExecutiveCommission of Ports (CEPA, in Spanish), thisauthority is now in the process of preparing the newtender that will enable a more open privatization.As may be recollected, construction of this newport with 900 meters of docks with a depth of 9.5to 15 meters, and a handling capacity of 850,000TEU, was completed in 2008 but a first tenderfor its concession, promoted by the previousgovernment, did not attract offers. This newcontainer terminal is considered the most modernof Central America, after PanamaSecond Attempt for the Concession of the Portof La UniónITransportation Infrastructure RequiresInvestments of US$38,000 Millions
  37. 37. September-December 2011Latin American Port NewsNicaraguaHutchison Ports Holdings Wins Appeal againstthe Concession of the Terminal at LázaroCárdenas:According to BNAmericas, on December 27the court of appeals ruled in favor of HutchisonPort Holdings HPH and ordered the indefinitecancellation of the concession of the secondterminal at the port of Lázaro Cárdenas in thePacific coast of Mexico, thus stopping signing of thenew concession granted on December 15 to APMTerminals B.V. and Controladora de Operaciones deInfraestructura, S.A de C.V., which has been awardedthe tender with an investment proposal of US$ 651million, an amount considered insufficient.In January 2011, the Federal Tribunal of Mexicoruled against the validity of the tender, honoringthe argument of HPH that the port authority(Administración Portuaria Integral de LázaroCárdenas -APILAC) had arbitrarily modified itsmaster plan of development. Instead of stoppingthe process, the Secretariat of Communicationsand Transportation SCT presented the cause to acourt of appeals, and without having ruled the case,APILAC, arguing that the resolution or sentenceimplying suspension of the contest had not beennotified, thus awarded on December 15th thecontract for the construction, exploitation, operationand maintenance of the second SpecializedContainers Terminal (TEC2) to the group underthe leadership of APM Terminals, second globaloperator of containers terminals after HPH, andaffiliate of the Danish global leader shipping line,Maersk.A Brazilian consortium under the leadership ofthe construction company Andrade Gutiérrez, wasawarded the contract to develop in a six-monthperiod the prefeasibility studies of this project inthe Nicaraguan Caribbean, which shall be followedby a feasibility study with a duration of 18 months,informed Container Management. Total studieswill cost US$5 million and, if results are positive,the consortium shall be granted a concession for25-30 years for the development of the port. Thetotal cost of the project will be US$20/300 millionsand, when fully developed, will be in condition tomobilize two million tons. In addition, the port willhave two “dry channels”: one corresponding to a70 km road to Nueva Guinea, from where it wouldcontinue to the capital, Managua, by the existing238 km road, and from there to the port of Corintothrough the existing highway of 158 km; the otherdry channel would be a railroad between MonkeyAnother Attempt to Revive the Project ofMonkey Point
  38. 38. September-December 2011Latin American Port NewsPoint and Corinto, 500 km long and would costUS$250 millions.Previous attempts to further this Project havefailed: investors from South Korea signed a letterof intention but did not develop any works.However, Virgilio Silva, President of the NationalPort Company (EPN, in Spanish), stated theBrazilian proposal is much more favorable thanthat of the South Koreans. According to OrlandoSolórzano, Minister of Development, Industry andCommerce, Monkey Point is seen as a strategicdevelopment for Nicaragua lacks facilities in theCaribbean, obliging entrepreneurs to use exits bythe Pacific. The Minister also stated that at presentthe exports containers trade must be done throughneighbor Caribbean ports of Honduras (Cortés)and Costa Rica (Limón), which represents an extracost of 12.5% and 20%, as each frontier pass costsUS$950 per container, due to security and thelengthy transportation by road. With the change oftraffic to a national deep-water port, estimates arethat the private sector would save US$100 millionannually. On the other hand, Dean García, ExecutiveDirector of the Nicaraguan Association for theTextile Industry, states the sector is very happy withthe possibility of the construction of this new portin the Caribbean.Congratulations for the Congress.Ricardo SánchezChief of Infrastructure and PortsCepal, ChileCongratulations for the excellent seminar.Richard KlienChairman Executive CommitteeLatinportsPresident Administration Councils ofContainers Terminals of Santos Brasil andMultiRíoBrazilMail1.- II Latin American Public-Private Congress of Ports and I ColombianCongress of Ports
  39. 39. September-December 2011It was very interesting to know the situationof the Latin American maritime-portlogistics, comparing it with our experiencesand thus concluding there are very interestingways to cooperate between the two parts ofthe Iberian-American continent.José María LangaDirector of Logistics DevelopmentValenciaportSpainI must thank you for organizing the eventand offering me the possibility of presentingsome of the experiences we have achieved inHolland.Jan Willem KoemanGeneral DirectorPharos Port ConsultancyRotterdam, HolandaI hope next year we may be able to developnew projects with Latinports.Rodrigo IsazaAdviser Office of the SuperintendentSuperintendence of Ports andTransportationBogotá, ColombiaI must say that the meeting in Cartagenahad an excellent academic and technicalquality, with pertinent information of worldclass port models; excellent motivation todevelop port and logistics projects requiredby Colombia; information we were able toregister first-hand, we the persons who makedecisions for the future of Colombian ports.Héctor LasernaGeneral ManagerTerminal de Graneles Líquidos del CaribeSanta Marta, Colombia
  40. 40. September-December 2011Thanks for the opportunity of coexistingwith Latinports.Leobardo RoblesManager of Planning and DevelopmentAdministración Portuaria Integral deAltamiraMéxicoI am sure we will continue working veryhard for the success of the association.Domingo ChineaGeneral ManagerSociedad Portuaria Regional deBuenaventuraColombiaThe event was of the highest level.Miguel AbisambraGeneral ManagerPuerto Industrial AguadulceBogotá, ColombiaI appreciate the opportunity given to myinstitute.Joao Gilberto CamposPresidentInstitute of Professional TechnicalTrainingSantos, BrasilEverything turned just fine; excellent event.Alvaro GalliPort & LogisticMontes del PlataMontevideo, Uruguay
  41. 41. September-December 2011Development of the Magdalena River isone of the greatest dreams of PresidentJuan Manuel Santos and one of mygreatest commitments.Germán CardonaMinister of TransportationColombia2.- Specialized Seminar on Upstream Navigation in theMagdalena River in ColombiaIt was an excellent seminar and I learnedvery much.Tim StaterEconomic CounselorEmbassy of the United States ofAmericaColombiaI believe the seminar was a great effort onyour part and I congratulate youEdgar HigueraExecutive DirectorChamber of Large Users of LogisticsServicesAsociación Nacional de EmpresariosANDIColombiaIt was a real pleasure having participatedin the seminar organized by you, whichI consider a complete success. It is veryinteresting to see there are titans like youthat are convinced of the benefits of the riverand how we are wasting them.Nelson CadenaConsultant in Logistics andTransportationColombia
  42. 42. September-December 2011I really liked the event and it has beengratifying for me to know that my work hasbeen of use for the project..Alvaro GalliConsultant Paraguay-Paraná WaterwayUruguayI wish to say that I can see and feel thepassion you all have to achieve navigationupstream in the Magdalena River. Pleasekeep yourselves positive and do not fail. Yourpersistence is very important for Colombia. Ispoke of champions and you surely are someof them..Rob DavinroyDirector of the Center of WaterwayEngineering ApplicationCorps of Engineers of the Army of theUnited StatesPrincipal Consultant of CDG EngineersSt. Louis, MissouriUSAI like to follow developments in theMagdalena River and at the same time willcontinue analyzing the market in Colombiaand see if we can do something in the shortterm as APM Terminals.Robert BosmanManager Development of NewBusinesses in AmericaAPM TerminalsPanamáVery interesting the information onLatinports.Germán SilvaManagerSilva Carreño AsociadosColombia
  43. 43. September-December 2011I was really happy to be able to contribute alittle in such an important discussion for thedevelopment of Colombia.Fernando FialhoGeneral DirectorNational Water TransportationAgencyBrazilEl Superintendente quedó feliz con larevista que nos dieron en el evento del ríoMagdalena publicada por Latinports.Rodrigo IsazaAdviser Superintendent of Ports andTransportationColombia