Previously, any company operating at either Valparaiso or San Antonio had been excluded from participating in the tender, resulting in no bids received in the initial process launched in 2011. Now, members of any of one of three groups linked to existing operations are effectively freed up to take part in the process.
However, the controversial ruling – with the president\’s casting vote effectively ensuring it took place – comes with a series of four caveats.
A parallel bidding process will take place, with incumbents\’ bids opened first. Potential bidders from outside the port will then have the opportunity to match such a bid. Should they do so then their bid will be favoured over the incumbents.
The guiding principal will be that the lowest tariffs put forward will determine the final outcome of who should be awarded the concession.
Should the concession ultimately be picked up by an incumbent, Valparaiso Port Authority (EPV) must submit a report every two years to the competition regulator, the Fiscalía Nacional Económica, confirming that agreed levels of investment are indeed taking place.
However, the concession winner must continue to maintain it using the same ownership structure as was prevalent at the time of the bid. No other companies involved in the bidding process who failed to secure the concession will be allowed to take control of the terminal through other avenues, including equity stakes.
Terminal Pacífico Sur (TPS), which currently operates Valparaiso\’s existing Terminal 1 container handling facility, is broadly in favour of the ruling, although stresses it will have to look into the overall feasibility of bidding before deciding to enter the process or not. However, Puerto Central, which manages the Port of San Antonio on behalf of the Matte group, has rejected the ruling, calling it “dangerous”, given that TPS would have a major advantage. The other potential incumbent bidder, Luksic, which operates within San Antonio, has so far failed to comment.
Commenting on the ruling, the TDLC stresses that, by allowing incumbents to bid – albeit under stringent restrictions – it is ensuring that the largest number of companies will be able to compete for the Terminal 2 concession, which is slated to commence operations in 2018. “From the point of view of free competition, it is preferable to expand the range of potential participants in the tender,” it says.
Quite how successful this revamped bidding process eventually is will be seen on December 7 when financial bids are opened. Terminal 2 is expected to need up to US$350m of investment and forms part of an overall US$1.5bn development plan for the port as a whole being promoted by EPV.