Wharf support: Port developments encourage growth of export industries

Economic development over the past decade has in part been driven by the rising demand for exports from Peru’s expanding extractive industries, as well as its diverse agriculture sector. Thus, in 2005 the National Port Authority (Autoridad Portuaria Nacional, APN), with the Ministry of Transportation and Communications (MTC), released Peru’s National Port Development Plan (Plan Nacional de Desarrollo Portuario, PNDP) to steer the progress of the national port system.

PNDP: Three of the primary objectives presented in the PNDP include promoting and guaranteeing private sector investment and operation within the national port system, upgrading port infrastructure in Callao and ensuring improvements to smaller regional ports. The APN has made significant progress in these areas, although there is still much work to be done.

The inclusion and promotion of private sector operation and investment has resulted in several concession agreements with major private sector operators, such as Dubai Ports World (DPW) and APM Terminals. As a result, several ports have been greatly improved, particularly Callao, which is increasingly being as an important trading centre. The decentralisation of port administration will be vital to the success of the sector. Investments are expected to reach $3bn between 2011 and 2015, according to the APN, with nearly half of the total coming directly from the private sector and the other half through public-private partnerships.

CALLAO: The port of Callao is undergoing a massive transformation following the entrance of two globally recognised port operators, DPW in 2008 and APM Terminals in 2011. Competition between the two is expected to bring down export costs and improve efficiency.

Since taking over in 2008, DPW has constructed a new $700m, 21-ha greenfield terminal at the South Dock Terminal, which now features two container berths, and a 650-metre quay with a depth of 16 metres. The second phase will see the addition of 310 metres of quay, as well as three gantry cranes. Total investment over the next three to five years is estimated to be $1.5bn. APM, meanwhile, is pouring $850m into the North Terminal to modernise infrastructure and expand services. Volume growth is expected to rise by 10% per year, doubling its figures over the next eight years.

APM announced the first two phases of development would garner an investment of $307m to upgrade Callao’s North Terminal. APM, which signed a 30-year concession agreement to run the terminal, earmarked $206m for the first phase and $101m for the second, which is to be completed by 2014. The concession will see the government take 51% of APM’s earnings for the duration of the agreement, at which point the terminal and its operations will be handed back. APM Terminals’ CEO Henrik Kristensen, told OBG that, “by the end of 2013 the port will have deep draft of 16 metres – meaning Callao will be able to accommodate the biggest ships in the world.” This will reinforce Callao’s position as a trans-shipment point, as neighbouring Chile and Ecuador cannot as yet accommodate such ships.

REGIONAL EXPANSION: Indeed, while much attention has been drawn to the improvements at Callao, it was not the primary port of call in the country. According to figures from the APN, the inland Amazonian port of Iquitos received the largest share of ships in 2010 with 31%, followed closely by Callao (30%), Pucallpa (14%), Yurimaguas (7%), Paita (5%), Matarani (4%), Pisco (3%) and Salaverry (3%). Fernando Fauche, country manager of Alconsa, a Maersk subsidiary, said, “In light of recent improvements at Callao the decentralisation of port infrastructure is an integral part of the PNDP.”

Increasing capacity in the regional ports and the development of inland transport infrastructure projects is seen as key to maintaining the growth of domestic and international trade. To this end, several expansion projects have been announced, including a $250m expansion at Paita and a $262m expansion at Matarani.

The government’s investment promotion agency, ProInversión, has announced plans to add a further concession for a maritime port. This will occur in the next year, at the port of General San Martín (Pisco).