The decision from the IADB to approve the finance has been welcomed by the National Ports Authority (NPA) enabling them to proceed with contracts established in the procurement plan. This plan seeks to expand the port’s cargo handling capacity by building a multi-purpose wharf and deepening the access channel to allow access for larger vessels. The Port of Montevideo is Uruguay’s principal port and is centrally positioned in the MERCOSUR-Chile Integration and Development Hub of the Initiative for the Integration of South American Regional Infrastructure. But Montevideo is not only the main gateway through which most of Uruguay’s exports pass, it is also the centerpiece of the country’s efforts to become a major player in regional transport logistics. Over the years, the port has been growing rapidly and steadily at an average annual rate of 14 percent, from 64,000 TEU in 1990 to 675,000 TEU in 2008, due to an increase in foreign trade.
The Master Plan
According to the master plan outlined by NPA the Port of Montevideo is set to consolidate itself as the logistical hub for regional distribution. It currently ranks fourth in the region in terms of container traffic (after Santos, Buenos Aires, and Rio Grande) and has one of the most efficient container terminals in South America. The port is the main hub for refrigerated containers in the region, and its operations have a strong transnational impact, as more than half of its activity (54%) involves the trans-shipment of containers from neighbouring countries. To achieve these plans, Montevideo needs to improve its port efficiency and to achieve this major investments are needed in wharves, terminals, and dredging, given the current condition of the port. At present, the port is able to handle vessels with an 11m draught, compared with depths of 13m and almost 10m, respectively, for the ports of Rio Grande and Buenos Aires. With the global trend related to freight flows in the market, as well as the decision of some major shipping companies to operate larger vessels on the principal routes, the port believes that it needs to upgrade its infrastructure and increase its depth so it can serve vessels with a draught of 12m in the short term and vessels with a draught of 13m in the medium term.
Furthermore, the Uruguayan authorities are developing a multi-modal transport strategy for regional integration of road and railway networks with the national system of commercial ports, among which the Port of Montevideo is an essential link.
Investments
Last October, the Belgian group Katoen Natie Terminal Cuenca del Plata, which manages Montevideo’s port terminal, inaugurated its new port facilities. The new facilities include an additional 15.7 hectares of land for container storage and a quay with a length of 350m by 35m wide capable of handling vessels with a 14m draught. A total of nine straddle cranes, four of them which can operate with 11.000 TEU vessels (double the current capacity) have been incorporated, which means 80 to 100 movements per hour. The new facilities have an annual capacity of 1.1 million TEU making it the most advanced terminal in South America. The importance of the new terminal for the country was reflected by the attendance at the inauguration of Uruguayan president Tabare Vazquez and three former heads of state. “This is an example of private and public successful understanding which has brought together foreign and Uruguayan investors,” said Vazquez. “Uruguay is a serious, responsible country which honours its commitments and obligations and grants security and confidence.” Victor Rossi, Public Works Minister, said: “Without funds and know-how from the private sector the government would not have been able to complete this ambitious project.”
The legal framework for the new port administration was drafted and approved in 1992 under the administration of former president Luis Alberto Lacalle and eight years later in 2000, under the administration of ex-President Jorge Batlle the terminal was auctioned opening the way for the current expansion.
Finance
For ANP there is one major obstacle in their plans –financing – that is why they turned to the IADB [for the second time]. The new financing complements a previous USD 40million loan approved by the IADB in October 2008 for the project. The new loan is for a 25-year term, with a four-year disbursement and grace periods, and carries a Libor-bases interest rate. Expected local counterpart funds will total USD 11million. The new loan will finance the construction of the deep-water wharf, the dredging of turning basins and the access channel in the Port of Montevideo. Specifically, the Bank is financing the civil works for the construction of the wharf and apron, widening of the inner channel (partial removal of piers A and B), and the initial dredging of the turning basin. The program has not yet entered execution, as no works has started, but the ANP has initiated the process to procure the works, having issued the call for proposals for selection of the appropriate contractor.