New Argentine government urged to analyse transport matrix before modernising Port of Buenos Aires

New Argentine government urged to analyse transport matrix before modernising Port of Buenos Aires

With the opening of offers for the tender to modernise the Port of Buenos Aires postponed until March 2020, the incoming Argentine government should prioritise creating a thorough transport plan for the whole country according to several port experts.

Olaf Merk, ports and shipping expert at the International Transport Forum (ITF), part of the OECD, told CM that he stands by the recommendations made in an ITF report on the port last year.

He stated that while the expiration of existing terminal concession requires an immediate response, possibly including the continuation and expansion of container operations in Puerto Nuevo, long-term planning is needed.

Merk said: “A strategic discussion is warranted on the benefits and costs of the different options for container terminal operations in Argentina in the longer term. Consultation between stakeholders to establish a common strategy for port development in the region will be essential for productive investment in new capacity.

“The government could benefit from a deeper reflection on the destination and origin of trade flows in Argentina and the most suitable container port system to accommodate these.”

The current strategy involves the consolidation of the Puerto Nuevo port area from three container terminals into one, involving a total investment of US$1.91bn over 50 years, with over US$800m to be paid by the new terminal operator.

Current operators DP World, Hutchison Ports and APM Terminals are thought to be bidding along with International Container Terminal Services, Inc. (ICTSI).

However, there have been doubts over the plan’s long-term suitability, with draught restrictions a major issue as larger ships cascade into regional trades and worries that Puerto Nuevo will become a feeder port in the long run.

Announcing the delay, Gonzalo Mórtola, controller of the Port of Buenos Aires, said: “In the face of the constant reception of economic and technical inquiries from possible operators, it seems reasonable and accurate to postpone the opening of offers.

“Thus, the interested parties are not only given more time to refine their projects but the incoming government will also have the possibility to internalise in depth the whole process that in itself is very complex.”

Antonio Zuidwijk, who has 50 years of experience in port-related companies including Dodero Group, Moor McCormack and Murchison, said that the outgoing Macri government had failed to prioritise transport policy.

He cited the lack of a comprehensive transport strategy that took intermodal links into account as well as the appointments of personnel, who he claimed, lacked transport experience.

Zuidwijk, who participated in working groups in the Peronist-government of 2010 and the think-tank of Presidential candidate Mauricio Macri between 2013 and 2015, is a fierce critic of Mórtola’s modernisation plan.

He told CM: “The competitiveness of a country depends on a good transportation system and Argentina with its railways and rivers and a coastline of 3,000 km where you have many ports should have intermodal transport policies.

“If you do not make transportation laws with fair competition between modes of transportation, you will never be able to have intermodal transport.”

In his opinion, the country should draw up transport policies first and only after that step, make a port plan for the whole country.

He cited the example of the US in the 1970s when a joint commission was formed including six senators, six deputies and seven technicians named by the President to design a transport plan until the start of the new century.

He noted: “The port plan must start with a study of the best use of waterways that connect the grain ports of Greater Rosario to the River Plate, featuring 230 km-long channels, which need constant and expensive dredging.”

One waterway is through the natural deepest and widest branch of the River Parana, the Parana-Guazu/Bravo and the Martin Garcia Channel, which is shared with Uruguay.

The other is a secondary branch, the River Parana de Las Palmas, which is much narrower and has many curves, but is now more used because it goes through the Emilio Mitre Channel, which is in Argentine territory.

Cost-benefit studies should be used to determine the optimal depths and widths, ensuring that producers and consumers are the final beneficiaries, he added.

Zuidwijk, who regularly shares his opinions on his personal website, also pointed out that there is substantial room for improvement in intermodal transport, with trucking now accounting for 93% of all cargoes, many of which are low value products travelling distances of 3,000 km.

More use could be made of railways, which used to transport goods 1,600 km from sugar mills in Jujuy to Buenos Aires, as well as utilising river fleets.

He stated: “When Paraguay started to produce soy-beans, its river fleet started to grow, with great participation from Argentine companies. These did not add vessels to their “Argentine-flag-companies” which lived on the “cabotage-rules”.

“This happened because the tax-system of Paraguay was very attractive for investors while strong Argentine labour-unions obtained excessively good conditions, resulting in high labour costs.”