Concession call

Neither state nor private enterprise entirely controls operations at three of Latin America's most important Pacific coast ports, however the trend is definitely for more concessions to be issued as ports recognise the need to be more competitive.

In Chile, various port companies, whose mandates are open-ended, were created in December 1997 and according to Alvaro Espinosa, general manager of San Antonio Port Company (EPSA), there is no desire to sell them off. “Any decision to privatise them or even allow private sector companies to take an equity stake would require a change to the law,” he says. But the privatisation of operations is a different matter entirely, and something that Chile has heartily embraced.

In Mr Espinosa's opinion, the existing structure has worked well, since it means that investment in new facilities is restricted to private sector companies. Within San Antonio, for example, two distinct forms of operator co-exist. San Antonio Terminal International (STI) was awarded a concession to operate the port's box handling facility in 2000 and is a joint venture between private sector partners. In contrast, in other terminals, handling activities are undertaken by various private companies using infrastructure that is administered directly by EPSA.

“If demand so warrants it, in the future, it is possible that all terminals will be managed by private companies operating under specific concessions,” he says.

With this system in place, San Antonio has become Chile's leading container port, with traffic rising 6% last year to 729,033 teu. Mr Espinosa explains that this was mainly due to two shipping lines switching traffic to STI from rival ports. He adds that, in times of crisis, companies make strident efforts to cut costs. In this respect, San Antonio is a much more affordable and efficient port than some others in Chile with whom it competes for traffic.

“For this year, we are hoping for double digit growth, allowing us to pass the 850,000 teu mark,” he says.

Significantly, EPSA is due to issue a tender this year for the Frente Costanera Espigón concession, which will be for 30 years. This entirely new private sector initiative will provide competition for STI in terms of both the container and general cargo sector.

The private sector is also playing a significant part in boosting box traffic at the Ecuadorian port of Guayaquil, where Contecon Guayaquil SA (CGSA), which is part of ICTSI, assumed management responsibility for the container and multi-purpose terminal as part of a 20-year concession as of August 1, 2007. The contract also contained a possible 20-year extension period. According to chief executive, Luis Cao, Guayaquil was an attractive business proposition given that it already had a good level of cargo volume in place and the company had been able to negotiate a good agreement with the government.

Indeed, Guayaquil has proved to be somewhat recession proof, reporting traffic of 900,000 teu in 2009, of which CGSA accounted for 625,000 teu, an increase of 2% on 2008. For 2010, Mr Cao forecasts a 6% increase.

However, the major impediment to growth is the draught of 9.6 metres in the port's access channel, where at least 11 metres is needed.

“The port authority is undertaking studies and has expressed its intention of increasing the draught in the near future,” says Mr Cao.

The lack of water to accommodate deep draught vessels is perhaps reflected in the fact that only about 1% of CGSA's total traffic is currently transhipment. This means that the vast majority of boxes passing through the company's installations are for use locally. Indeed, Mr Cao points out that around 87% of Ecuador's total box market is concentrated on just two cities: Quito, the capital, and Guayaquil, its main port. Additionally, Mr Cao describes the terrestrial access to the port as only “acceptable”.

Since assuming control of the terminal, CGSA has invested around $160m in both civil works and equipment. This has resulted in the creation of 1,700 metres of linear berth, of which 700 metres are exclusively set aside for full container vessels. The container stacking area now accounts for 130,000 m2, with a further 50,000 metres available for containers and multi-purpose cargo.

Two mobile harbour cranes (MHC) and three quayside gantry cranes normally take the brunt of the quayside lift, although one of the latter was put out of action following an accident on April 5; a replacement has been sourced. Mr Cao claims an hourly vessel productivity rate of 45-50 moves. The yard is equipped with eight rubber-tyred gantry cranes (RTGs) and 16 reachstackers.

A further Gottwald MHC is due to be commissioned on August 14, while June 7, 2011 will see the arrival of a new ZPMC gantry crane and four RTGs.

Meanwhile, further north at Buenaventura in Colombia, private sector investment is shortly due to radically transform container handling. The port, which is located some 120 km from the regional capital of Cali, is currently the country's only major Pacific coast deep water facility, handling containers, dry and liquid bulk, as well as a variety of general cargo.

At the end of this year, the new Terminal de Contenedores de Buenaventura (TCBUEN) will come on stream and will go head-to-head with the existing dedicated container terminal operated by port company Sociedad Portuaria Regional de Buenaventura S.A. (SPRBUN). Significantly, the Barcelona-based TCB group holds a 30% stake in the new venture.

Source: Port Strategy