Ports Prepare To Meet Demand From FTAs
Significant investment in Barranquilla Port is in response to greater demand from expanding trade. With Colombia having recently signed a growing number of Free Trade Agreements (FTAs), increased pressure on ports infrastructure was to be expected. This investment will contribute to bridging Colombia's transport infrastructure gap, making the country's exports more competitive.
Barranquilla Port is receiving US$180mn in investment in order to become the most advanced multipurpose cargo port in the region. This investment became possible after the Chilean investment fund Southern Cross bought more than a 50% stake in the Sociedad Portuaria Regional de Barranquilla in January 2013. The investment package includes the purchase of two multipurpose cranes that will double hourly container handling capacity. Also, two new 300m deep docks will be built by the end of the year in order to increase the capacity and serve a larger number of ships. In 2013, the port is expected to handle 4.3mn tonnes, including bulk load and containers. At present, the port serves 16 different shipping companies, with this number expected to rise in the future as Asian companies have expressed an interest in operating in the country.
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Increased trade resulting from trade agreements has significantly expanded the number of containers in Colombian ports. We anticipate this demand to continue to grow as the country now has an FTA with the US and trade agreements with South Korea and China. Furthermore, there are ongoing negotiations with Japan and an FTA with the EU is pending approval. This is in addition to the Pacific Alliance framework agreed in May 2013 with the aim of increasing trade with Asia.
Moreover, BMI believes that the mining sector, in particular coal, will continue to lead the development of Colombian dry bulk ports in 2013 ( see ' Coal Powered Growth In Ports Sector', 25 Jan). T here has been significant global interest in the Colombian mining sector. The Latin American country, with coastlines on both sides of the continent, is one of the top coal exporters in the world, and the government is hoping to up its exports of other minerals as well. Recent government moves are aimed at increasing total mining output by attracting more foreign investment into the country. To that effect, the government recently announced it will allow both foreign and domestic investors to bid for as much as 20.5mn hectares of land.
Demand at the Barranquilla Port is also expected to rise as a result of the investment made into recovering navigability in the Magdalena River. As the main river in Colombia, this artery runs from the south to the north and it is expected to transport containers in and out of Barranquilla Port. The investment required to rehabilitate the river is estimated at US$600mn and ten construction companies have already been pre-qualified in the tendering process.