OBG talks to Luis Fernando Andrade Moreno, President, National Infrastructure Agency (ANI)

Interview: Luis Fernando Andrade Moreno

With only 1000 km of two-lane highways, what are your plans to extend the road network?

LUIS FERNANDO ANDRADE MORENO: We are carrying out several projects through concessions, which, by 2014, should allow us to increase the length of two-lane highways to 1700 km. This will still be insufficient for the country’s needs, and so the administration is launching the fourth generation of concessions to keep pace with the growth rate seen for the entire country. In 2018 we expect to have more than 3000 km of two-lane highways.

The programme also takes into account the renovation of existing single-lane roads for which expansion is not necessary because of their location and relatively low volumes of traffic. The issue with these roads is the 40 kph speed limit imposed because the roads are steep and winding. Upgrading these roads, by making greater use of tunnels and bridges, will make them straighter and ensure trucks can travel safely at 80 kph.

What port improvements are needed to account for the recent free trade agreements (FTAs) signed with the US, Canada and the EU?

ANDRADE: The port expansion aims to increase shipping capacity by 50% within the next four to six years. On the Pacific coast, Buenaventura Port will be renovated in conjunction with the Port Society of Buenaventura. Other plans include the construction of new terminals like the port of Agua Dulce (bulk and containers) and Solo (liquids like fuels and liquefied gases). Longer-term projects are also being considered, such as the development of the River Dagua terminal.

Overall, it is more important to develop ports in the Pacific rather than in the Caribbean. We want to accelerate improvements at Tumaco Port, where we are exploring the possible expansion of Ecopetrol’s oil outlet terminal. We are also investigating options closer to Panama, such as the development of green fields at Tribugá and Cupica bays. The environment is a big concern here, though, because of the close proximity to ecologically protected parks in the area.

At present, we have enough capacity in Buenaventura to meet current demand; however, we must anticipate new cargo volumes as a result of the FTAs. All the new projects will use the public-private partnership (PPP) model. In fact, since withdrawing from port management in 1994, the government has established a total of 55 PPPs for port terminals across the country.

How will improving navigability of the Magdalena River affect transportation time and costs?

ANDRADE: The river stretches from the Magdalena Valley to Barranquilla on the Caribbean coast, also passing through the Dique Canal to reach Cartagena. While the train system will be used to transport bulk cargo and minerals to Santa Marta, the Magdalena River will make the transportation of goods to Barranquilla and Cartagena much more cost efficient.

The one issue regarding river transport is the time it takes. Transporting a container from the interior of Colombia to Barranquilla can take up to six or seven days. By train, that same journey could take one day.

The decision comes down to the kind of freight being transported and its destination. Maritime transport is the world’s most cost-efficient means of delivery, followed by train and road transport, respectively.

Improving the navigability of the river from La Dorada in Caldas to Barranquilla is expected to require a total investment of over $600m. The bid is being tendered by the Magdalena River Corporation and ANI, which are in advanced stages of awarding the concession.

The highway concession programme launched in December 2012 will be the largest in Latin America.

We anticipate that this programme, along with the train and the Magdalena River projects, will generate significant opportunities for investors and companies. The insurance industry will gain from this construction activity, as ANI plans to insure new projects and assets to the tune of $30bn. The banking sector, too, will be given opportunities to provide financing. The best time to invest in infrastructure will be over the next two years.