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Bigger is better

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Several ports situated on both sides of the Panama Canal are listed in our Top 100 Container Ports ranking. All of these ports, including Almirante, Balboa, Colon and Cristobal, saw a huge increase in their container throughput due to the global economic recovery in 2010. As a whole, Panama saw container throughput soar to over 5.5 million TEU – up 31.8% compared to 2009 when it handled 4.2 million TEU. Container throughput at Balboa reached 2,758,506 TEU – up 27.1%, while Colon (including Manzanillo Container Terminal, Evergreen Terminal and Panama Ports Terminals) handled a total of 2,121,605 TEU in 2010 – up 37.1% compared to 2009. The remainder was handled by both Almirante and Cristobal. The cause of these huge increases were a result of shipping lines like Maersk Line, APL, MOL Cosco and CMA CGM concentrating their trans-shipment operations on either side of the Panama Canal in preparation for the expansion of the Canal in 2014.

Perhaps one of the major decisions this year was made by the world’s second-largest shipping line, Mediterranean Shipping Co (MSC), to also strengthen its regional trans-shipment business in the ports of Balboa and Cristobal.

The widening of the Panama Canal is still on schedule and in July the concrete work for the Atlantic and Pacific new set of locks in the expansion programme started, marking one of the most important phases of the project’s construction.

The contractor, Grupo Unidos por el Canal SA (GUPCSA) started pouring lean concrete at both lock sites last March to level the surface in preparation for the permanent concrete work and in July GUPCSA poured structural marine concrete to shape the floor of the upper chamber in Gatun, on the Atlantic side. The concrete was poured into specialised industrial from work that included a significant amount of rebar (steel bars or rods used to reinforce concrete) to ultimately shape the 100 cubic meter blocks that make up the lock floor.

The concrete mix, designed to guarantee a minimum service life of 100 years of operation to the waterway, was transported to the site using agitator trucks lined with insulating material to ensure a maximum temperature of 12 degrees centigrade at the moment of the pouring.

On the Pacific side, concrete pouring activities also began with the construction of the pit for the first of three lock cross-unders or tunnels. Through these cross-unders, trays and pipes will carry communication and electric wires, drinking water pipelines and other components needed to operate the lock complex. Each set of locks will have three cross-unders.

Each of the pits is built by stacking 16 blocks made of structural concrete and rebar. The pits, at a height comparable to that of a 10-storey building, will include a series of steps and an elevator that will enable access to the cross-under. Once completed, the cross-unders will allow maintenance personnel to conduct their tasks in a safe environment. In its entirety, the new set of locks will require 4.8 million cubic meters of concrete.

East Coast Ports

The Canal expansion will have major impacts on port infrastructure on both sides of the US (and in the Gulf), and it remains unsure how this exactly will work out. In our October 2010 issue we reported that both Los Angeles and Long Beach are somewhat worried that that many importers will decide to bypass the ports on vessels coming from Asia and go through the Canal directly to East Coast or Gulf Coast ports instead. Currently, the majority of Asian traffic calls at Port of Los Angeles or Long Beach, where it is largely moved by rail and truck to the Midwest and East coast, providing a better transportation path given the current costs and time required for an all-water route.

Therefore, it is expected that the impact of the widening of the Canal will be mostly felt on the east Coast of the US. It is no wonder that those ports are lining up to sign partnerships with the Panama Canal Authority (ACP). The most recent one was at the end of July 2011 when ACP and the Georgia Ports Authority (GPA), which owns and operates the Port of Savannah, renewed their ties with the signing of a Memorandum of Understanding (MOU). The MOU, renewable for five years, was first signed in July 2003 and aims to unify efforts to encourage mutual economic benefits. The partnership also supports promotional efforts of the “All-Water Route,” the route from Asia to the US East Coast via the Panama Canal.  Georgia stands to benefit from the waterway’s expansion and according to the GPA’s market studies, the Canal’s new locks are expected to direct three times more ships to the Port of Savannah, currently the country’s fourth largest and fastest-growing port.

But it is not only Savannah that anticipates an increase in traffic, other ports are also working hard to increase their capacity, be it that they are awaiting approval or much needed funds from the Obama Government.

The Port of Miami has Federal permission to deepen the access channel to its port, but needs USD75 million to start the project’s first phase. While the Port of Charleston is looking in to deepening the approach channel from 45 to 50 feet and is in need of USD 400,000 in federal money for a feasibility study by the Army Corps to determine if this would be feasible. But if the outcome of the study would be positive it will be needing millions from the government to execute the complete project. The Port of New York/New Jersey has started on a USD2.3 billion project to deepen its harbour to 50 feet in order to accommodate larger container vessels. Unfortunately, it needs an additional USD1.3 billion from the Government to raise the Bayonne Bridge that fronts the channel to the port. In the Gulf of Mexico, the Port of Mobile is working hard to accommodate larger vessels by creating a larger turning basin and a new container terminal. In total, the USD600 million-project also includes upgrades of cargo handling equipment and neighbouring Port of New Orleans is planning an expansion which will cost an estimated USD250 million. The port will be able to finance USD33 million of that itself but is looking to the Federal Government or private investors for the remainder.

The Public-Private relationship – Latin America

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The 2009 crisis and recovery affected the different continents with varying magnitude and duration. Until very recently, most observations were showing a strong recovery of waterborne cargo flows up to and beyond pre-crisis levels, particularly in the emerging economies.  Recent developments signal the possible arrival of a new economic crisis. It is too early to comment in this article on the possible impact of a prospective new crisis.

Cargo is back, and so are the ships and… port congestion

With the welcome return of the cargo also came increased vessel calls, and inevitably… port congestion, especially in places where it already existed pre-crisis, as little additional capacity came on stream in the meantime. For example, on August 3rd 2010, observers reported 38 idle freighters waiting on roads in Santos, and 44 in Paranagua. On May 28th 2011, the figures reached 27 and 24 respectively. While containerships were waiting on average 12 hours to get a berth in Santos in 2008, the figure rose up to 16 hrs in March 2011 and still was 10 hrs in May. The industry standard is berthing on arrival.

Santos, 28 May 2011 : 24 vessels waiting on roads

 

                                                                                                                                                                Source:Datamar

 

Brazilian Ports at capacity limit

“In 2010, ports in Brazil handled 833.9 Mt, a 13.8% increase compared to 2009. This is the capacity limit of the ports and this year we are going to have to live with queues and delays. New investment is urgently needed, but the government’s General Concession Plan, which will list the most important infrastructure projects in the country, has yet to be “anything other than paper proposals.” ANTAQ has received 14 requests for the construction of private terminals for mixed use, which will be built outside existing port boundaries. This is a controversial question that has still not been settled judicially.”

 

National Waterways Transport Agency (Antaq)                                                Source: Guia Maritimo 20 May 2011

This statement made by a major Governmental Agency does unfortunately reflect the reality of the Brazilian port system. It is the first official acknowledgement of what many observers have reported over the years. Deeper analysis shows that the combination of three main factors: a lack of berths, a shortage of bonded storage area, and a twofold increase of containers dwell times, is at the root of the current situation.

Too little – too late

Minor additional port capacity has been or will be commissioned in Brazil. Both Rio Grande and Santos Brasil have commissioned one new berth in 2010. Itapoa has, after over 6 months’ delays, operated its first ship on June 16th 2011. It still lacks a proper access road, which should be completed by the end of 2011. The bigger terminal projects in Santos, DPW’s Embraport, and APMT/TIL’s BTP will only see the light by 2013 (or maybe 2014/15). Triunfo, main shareholder of the controverted Portonave terminal in Navegantes/Itajai, is spearheading yet another private endeavour to add port capacity in Santos. The Terminal Portuario Pedro Brites project involves the construction of a combined ethanol/containers terminal on a 50ha undeveloped privately-owned marshland, providing 0.9 million TEU capacity. In spite of having obtained a preliminary environmental license, this project still faces a number of regulatory hurdles, including its adequation with the Port of Santos Master Plan and the legal uncertainty surrounding the concept of private terminals for mixed use. Delivery in 2015 might be an optimistic forecast for this project.

The sugar case

 Santos is by far the major outlet for sugar exports out of Brazil, which count for over 50% of the world’s sugar exports. The peak of the season takes place in Q2/Q3. Q3 2010 saw unprecedented queues of up to 60 vessels waiting on roads to operate at the Santos berths, many of them “açucareiros.” Exceptionally intense rains (120 days of rain, as compared to 90 days on average) were partly to blame. Private investments of USD 36 million have been planned to effectively boost the Rumo sugar terminals yearly capacity by 25 to 30% in 2011, but didn’t make it for the 2011 peak season, partly due to licensing delays. The project consists of two devices that will allow the vessels to operate even under heavy rain. One is a fixed metallic structure 138m long and 76m high, enabling Panamax and Capesize bulkers to operate in rain inclinations up to 41°. The other is best described as a cantilevered tensile canopy structure that will be able to protect vessels in winds up to 72km/h and in any rain inclination. In spite of the announced 9% drop in sugar cane production, the new devices will certainly be welcome for the 2012 season.

 

Private and institutional investors’ strong appetite for investing in Peru’s and Brazil’s port infrastructure

Callao, the biggest Peruvian port, is expected to handle close to 2M TEU by 2015. One of its terminals

is the new DP World Muelle Sur concession with a capacity of 850,000 TEU per year. To cater for the expected growth the Peruvian government prepared the tendering of Muelle Norte. The tender process got stranded in legal disputes over whether or not DP World should be allowed to bid, as it was feared that it could result in a private monopoly within the country. In early April, APMT was awarded the concession. Two majors like DPW and APMT off to a good start in El Callao within 2 years! Headwinds meantime started blowing: the new Government elected in June is not as favourable to concessions as its predecessor, and DPW is suing the Government on grounds of unfair competition. Capacity shortage has plagued the Brazilian port system for decades. It is not for a lack of interest on the part of the private initiative. The first wave of container terminal concessions took place in the late nineties and, somehow, attracted mostly national players. The recent past saw a breakthrough by foreign and institutional investors. In January 2011, the equity fund Advent took 50% ($480M) participation in the TCP container terminal in Paranaguá. In December 2010, the Inter-American Development Bank (IADB) approved a $100M loan to finance the Embraport project in Santos. (This loan will be coupled with a large syndicated loan from international commercial banks in excess of $400M). Earlier in 2010, APM Terminals (APMT) and Terminal Investment Ltd (TIL) formed a joint venture and together will manage BTP. In March 2011, BTP landed an International Finance Corporation (IFC) syndicated loan of $679M.

Two aspects of the maritime transport are undergoing far-reaching changes in the Region: vessel size and trans-shipment

The size of the vessels serving the South American ports is increasing significantly. This is partly linked to the deployment of the big post-panamax “ULCCs” (Ul
tra-Large Container Carriers) on the main East-West trade-lanes. This in turn frees up big vessels from the previous generations, which are gradually “cascaded” down to smaller trade-lanes. Major players on the South Atlantic have also designed purpose-built vessels specifically for the continent: Hamburg-Süd is deploying the 7100 TEU “Santa Class” and has plans for 9600 TEU vessels. Maersk has launched its own brand new 7450 TEU “Sammax class.” Cabotage, feedering and trans-shipment are receiving more and more attention. Part of this renewed interest in the concept has been prompted by the chaos caused in the liner shipping schedules by endemic port congestion in Brazil. Other factors at play are the increased vessel size, described above, and the search for alternatives to the heavily congested Brazilian road system. While still modest, the number of trans-shipped deep-sea containers reached 140,000 TEU in 2010, 60% more than in 2008. To be viable, a trans-shipment operation needs to be supported by shipping lines. Hamburg-Süd/Aliança now has a firm base in Itapoa (SC). Within two to three years, MSC and Maersk will have their respective sister-companies (TIL and APMT) operating in Santos. Both places will enjoy water-depths of -15/-16m.  The prerequisites for a significant hub-and-spoke model in the South Atlantic will be fulfilled. The same trends are observed on the West Coast of South America. While congestion has not significantly impacted WCSA ports, the port developments in Peru, combined with the wish, on the part of liner operators, to deploy bigger containerships indicate that the concession of two sizeable terminals in Callao might very well shape the future landscape of the South East Pacific maritime industry. With two major global terminal operators pushing each other up to the next level, under the approving eyes of many shipping lines, it can be expected that the “hub & spoke” concept will make headway in the region.  

South West Atlantic trans-shipment growth chart

The state of Public-Private Partnering

With few exceptions, the landlord port model has been successfully adopted across the continent and remains the preferred model. The majority of the existing private port entities are doing fine, living the normal life of port concessions. A recent mapping of container terminals concessions in South America revealed however that a number of projects are confronted with delays and difficulties.  The list of problems includes: one concessionaire expropriated; two international operators breaking camp; two tenders without bidders; one tender with only one bidder; two tender processes delayed by incumbent competing concessionaires; one completed terminal without an access road; one completed terminal without an operator for more than three years.

 

Endangered terminal projects map

 

Some lessons can be learned from the analysis of the ailing port projects map :

Because public funding and capacity are themselves under pressure, it is still necessary to attract the private sector and the organisational resources, capacity, know-how and experience that normally come along.

Port projects can take from 2 to 5 years and more to be commissioned.

The life-span of concessions varies from 10 to 40 years, depending on the size of the investment.

Port projects need to be tailored to realistic and prudent combinations of costs and prospects, and at the same time include contingency plans and room for growth.

Over-ambitious or ill-timed public tenders run the risk to find few candidates, but they shouldn’t be too shy either.

Whenever possible, a project should be progressive and modular, with finely tuned market-related thresholds that trigger staggered phases of investment and expansion.

The legal frame should be in place, including a concession law and a maritime domain law.

It should provide for a level playing field between existing and new concessions.

The government structures in charge of implementing the legal and regulatory frameworks, including licensing, must be duly capacitated to ensure agile approval processes.

The respective goals & strategies of both the conceding power and the candidates need to be aligned right from the start of the tender process.

Clear rules must be published, a.o. concerning the development of new concessions.

 South America is currently favoured with a conjunction of economic growth and a renewed willingness on the part of private interests to invest in port development. To fully play the role assigned to a country’s port system in terms of timely capacity development, Governments need today to go out of their way to design, propose and facilitate the right projects that will attract the right private investors and operators. This is the only way to translate this positive encounter between the public needs and the private sector’s interest into concrete port installations.

Talking Trade: Latin America and the Caribbean

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Despite gleaning year-on-year growth in export trade levels, a recent report from the Economic Commission for Latin America and the Caribbean (ECLAC) is urging caution. Its report- Latin America and the Caribbean in the World Economy: the region in the decade of the emerging economies – projects that the value of goods exports will rise by 27% this calendar year. The report states prices will contribute the most to this rise (18 percentage points), whereas volumes will contribute 9 percentage points. This mirrors the rise in exports recorded in 2010, when an increment of 26.7% was recorded. Imports in the region are projected to rise by 22%, in comparison to a 29.5% rise in the previous year. Within this, fuel imports are set to rise by 46%. 

“Slower growth in imports than in exports may result in a regional trade surplus of around USD 80 billion at year-end, in particular with the United States and, to a lesser extent, with the European Union,” states the report. It adds that Latin America and the Caribbean will widen its trade deficit with China and the rest of Asia, but with a differentiated sub-regional pattern, as South America will register a surplus and the rest of the region a deficit.

Put into perspective, these increases came after drops of -22.6% and -25% in exports and imports respectively as the dismal global economic situation of the time took its toll in 2009. Many forecasts of worldwide fiscal recovery since then have at best seemed optimistic and at worst naïve, so the caution urged by ECLAC is understandable. It points to continued instability in the US economy, and particularly in Europe with the crises in Greece, Ireland and Portugal, as an ever-present cause for concern. Add to this instability in North Africa and other factors pushing up fuel prices, and the global financial effects of the tsunami tragedy in Japan, and ECLAC seems justified in stating that “volatility and uncertainty are again reaching worrying levels.”

MACROECONOMIC PRUDENCE

The report notes how data for mid-2011 suggests that slower growth in industrialised nations is beginning to act as a drag on the main emerging economies of China, Brazil and India. It notes how this global situation is likely to result in “slack” economic growth across the world in 2012, particularly given the complex period of consolidation required to sort out problems in the US and Europe. Despite this, ECLAC argues that the decade of 2011–2020 could still be a boom period for emerging economies: “The engines of the global economy will depend increasingly on growth in the emerging economies and on South-South trade and investment. As emerging economies achieve high and stable growth rates and their population growth slows, their per capita income will rise and move towards convergence with the industrialised economies, particularly for the middle class in these countries.” However, the report notes that the great instability across the world’s economies means that the main recommendation for Latin American and Caribbean economies is macroeconomic prudence. Fiscal volatility is affecting economies with deep financial and stock markets in the region, ECLAC states, and the slowdown in Europe and the US will limit export growth and depress commodity prices. The report reasons that Latin American and Caribbean economies should strengthen macroeconomic management, pursue sustainable fiscal and external accounts, reinforce macro-prudential measures, and steer their policy decisions by the long-term behaviour of main economic variables. If these trends continue, exports to Europe and the United States should be expected to slow in 2012 and export growth will be compromised in economies whose exports depend heavily on those markets. As growth slows in the emerging economies and the industrialised economies show increasing weakness, the report states, international commodity prices are likely to fall, affecting the trade and current account balances of net commodity exporters.

RISES BY REGION

In terms of regions, the report notes the importance of trade with Asia over the past decade. In particular, Latin America has recorded a notable rise in trade with China. Moreover, it notes how South-South trade, led by China and the rest of emerging Asia, is the main engine of world trade growth. In 2005–2010, the region was the fastest-growing trading partner for China and the second fastest for Japan. During this period, China’s exports to and imports from Latin America and the Caribbean grew at almost twice the rate of its total trade for the time, accounting for almost 6% of the nation’s exports and imports in 2010. During this time, Japan’s exports to Latin America and the Caribbean outgrew those to any other destination market and its imports from the region were surpassed only by those from the Community of Independent States (CIS). The report recommends that nations in the region should continue to attempt to optimise these trade levels and “redouble their efforts to forge a new trans-Pacific relationship.”

Additionally, the report also notes that the region is becoming an increasingly important trading partner for the US. Over the past 20 years, the US’s trade with the region has increased at a rate only surpassed by China, and in 2010 it became the largest buyer of US goods exports, accounting for 23% of the total. In that same year, 19% of total US goods imports were sourced from the region, positioning it similarly to China in the US’s import ranking. Within this, Mexico accounts for more than two thirds of the region’s exports to and half of its imports from that market. However, the region’s trade with the EU is less notable, hovering at around a 3% share over the past three decades. Although the EU is still the region’s second largest trading partner, it could lose this position to China towards 2015. This being said, the report reflects that the two regions have sought to enliven their trade relationship in recent years. In 2010, the EU completed negotiations for an associate agreement with Central American countries, including Panama, and a trade agreement with Colombia and Peru. Further to this, last year also saw the resumption of negotiations on an association agreement between the EU and Southern Common Market (MERCOSUR). In addition to agreements already in place with Chile, Mexico and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM), by 2012 or 2013 the European Union could have preferential agreements with 30 countries in the region. The report also notes how commodity prices have been booming since early 2009, until being interrupted midway through this year amid global financial instability. These higher commodity prices, it explains, are highly positive for most South American countries but negative for most countries in Central America and the Caribbean. The largest benefits accrue to South America, particularly Paraguay and Uruguay in the case of food and beverages, Chile, Peru and the Plurinational State of Bolivia in the case of metals and minerals; and the Bolivarian Republic of Venezuela, Colombia, Ecuador and, again, the Plurinational State of Bolivia in the case of energy products. In contrast, higher commodity prices hurt terms of trade for most Central American and Caribbean countries. The Caribbean countries are even more vulnerable than those of Central America, ECLAC details, because they run a trade deficit in food and beverages, metals and minerals, and energy products, whereas the trade deficit of the Central American countries is concentrated in this last category.

Greenfield opportunity in Brazil

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The Inter-American Development Bank (IDB) has been mandated by Embraport (Empresa Brasileira de Terminais Portua?rios SA) regarding the development, construction and operation of a fully-private green-field container and liquid bulk port complex located in Santos on the coast of the State of Sao Paulo in Brazil. The IDB has spent more than a year evaluating potential financing for the development, construction, operation and maintenance of the new port complex. The financing would take the form of a long-term IDB A-Loan facility of approximately USD100 million as well as a parallel B-Loan facility from Banco Nacional de Desenvolvimento Econo?mico e Social (“BNDES”) of approximately USD250 million. The total project cost is estimated at approximately USD1.020 million with a total long-term financing package of approximately USD765 million. The financing will include a USD430 million A/B-Loan from the IDB consisting of USD100 million from the IDB’s own capital and USD330 million B-loan. In parallel, the Bank is partnering with Caixa Economica Federal (CEF) of Brazil for an additional USD335 million (equivalent) in local currency, through an on-lending facility of BNDES, to complete the total long-term debt package.

Project outline
The project consists of a new terminal for various use with the basic purpose of handling containers, liquid bulk (ethanol), and general cargo under all customs regimes both for import and domestic shipping and coastal navigation. The estimated annual throughput for the container terminal is 1.25 million TEU and up to 2 million tonnes of ethanol with 850 vessel dockings per year. The project includes two docking berths along the quay for general cargo (mainly containers) and one pier for liquid bulk. In Phase I the length of the docking quay is 650m with a 250m pier. The container storage area will be 206,900sqm and the liquid bulk storage area will be 29,300sqm with a total of six 10,000m3 tanks, resulting in a total storage capacity of 60,000m3. The project will also include an internal roadway system and truck waiting area with support area for drivers as well as an internal railway system with car loading/unloading facilities. The port will also include facilities for administrative functions, support, customs processing as well as auxiliary infrastructure (water, sanitation, energy, etc.). It is anticipated that the terminal will handle third party traffic as well as its own cargo. Once fully completed, the new port complex will feature a 1.1km quay, 250m mooring pier for liquid bulk cargo, container storage yard of 600,000sqm, a 100,000m3 tank storage park, administrative buildings and a bonded warehouse. The new terminal will be located in one of the few large waterfront sites on the northeast bank of the Port of Santos, a site of approximately 1,000,000sqm. There is access to the project site both via railroad and two major roads that currently serve Port of Santos.

Economy
When finished, Embraport will be the largest private port terminal in Brazil and has the opportunity to capitalise on a growing need for a port in a national and international community increasingly dependent on trade. Brazil’s export economy has greatly increased the importance of container ports. This is largely attributable to the increase of exported manufactured goods that are mainly containerised and which have grown at an average rate of 10.4% per year since 1996. As the leading port in Brazil for handling containers, Santos has increasingly grown through its utilisation of specialised container terminals, wholly operated by private enterprises. Additionally, Embraport will also be able to enhance Brazil’s exports of ethanol by operating their dedicated pier for liquid bulk cargo. As the ethanol market develops in Brazil and around the world, as the result of growing environmental concerns, rising oil prices, and interest in energy security, the transport of ethanol both domestically and worldwide will need to be serviced. As the country with the lowest total production costs from raw material to final product due to strong sugar production and longstanding experience (over 30 years) with ethanol production, Brazil looks to continue to advance itself as the world’s leading ethanol exporter. Sao Paulo plays an influential role in this trade as it is responsible for 65% of national ethanol exports. The IDB says that their development objective is to create much-needed container and liquid bulk capacity at the most critical port facility in Brazil, which is currently stretched to its limit capacity. The project would allow for sheer additional capacity and increase overall specialisation at Santos by adding a well-designed facility with state-of-the-art equipment and management. The project was first identified as a critical project in the Port of Santos Master Plan 2009-2024 funded by the IDB in 2008. The results of the plan indicated that the Port of Santos must triple its capacity in the next 15 years. At present, there are lines of 100-150 ships anchored outside the port awaiting calls with average waiting times of anywhere from five to ten days. This is particularly problematic for container vessels that operate on tight schedules, with delays at one port causing missed arrival windows at subsequent ports of call. This creates hundreds of millions of dollars of additional costs annually, all of which is passed on to the consumer, resulting in increased costs of imports and less competitive Brazilian exports.

Background
Embraport was incorporated in Brazil as a sociedad anonima with the purpose of managing the design, financing, construction and maintenance of a private mixed-use terminal. The ownership of the company will include Odebrecht Transport Participacoes SA of Brazil (57.9%), Dubai Ports World (DP World) of the United Arab Emirates (26.9%), and the Coimex Group of Brazil (15.3%). Embraport is being integrated into the Santos Port Complex on the northeast bank of the estuary in an area named Sitio Sandi located between the Sandi and Diana Rivers near Barnabe Island. The total area of the property destined for the terminal is currently 101.9 hectares (ha), with planned expansion of the area via ocean landfill of 30.9ha, increasing the total area to 132.8ha. In this area, approximately 80ha will be developed for the port and approximately 50ha will remain as a preservation area around the developed port area. The project will be divided into three areas. The North Area – Retro-area and Access to Terminal (Area 1) located in the flatter and dryer area, with required filling of approximately 3.5m, is the terminal’s entrance where truck loading and unloading areas will be constructed along with several buildings and gates. Area 1 will consist of 194,130sqm with 169,293sqm of usable area and 8.7ha for future expansion. The Central Area (Area 2) is the rail yard and will require filling similar to Area 1 with final level of 3.5m. Area 2 will consist of 91,330sqm of which 75,159sqm is usable area. The South Area (Area 3) is where the storage tanks for liquid bulk and the facilities for handling and storage of containers will be constructed. Area 3 will be the largest usable area consisting of 517,540sqm with 342,800sqm of usable area. Construction includes dredging of contaminated and non-contaminated material as well as backfilling and rock filling. The dredging will consist of approximately 580,000m3 of contaminated material that will be deposited in geo-tubes and used as landfill at the Confined Disposal Facility (CDF) located in Area 3 destined for the container yard and 3,620,000m3 of non-contaminated material to be disposed of in an existing designated ocean dumping site located off the coast. Area 3 will be surrounded by a dike and will be divided into four small areas by three smaller earth dike barriers. The backfilling and rock filling will cover almost all of the terminal area, with an estimated total volume of 2,375,000m3 in Phase 1. The approximate quantities to be used in the different layers of the fill are: geo-textile 683,000sqm, geo
-grids 368,000sqm, rock fill for protection 74,000m3, and a drainage bed 160,000m3. Construction will be completed in two phases. The completion of Phase 1 of the Project is expected 34 months from the start of construction. The commercial operation at Embraport will begin in the twenty-fifth month. The implementation timeline for Phase 1 of the project includes the following three stages for delivery of the retro-area for containers: Stage 1 an estimated 50,000sqm at 24 months; Stage 2 an estimated 70,000sqm at 29 months; and Stage 3 an estimated 211,305sqm at 34 months. The Phase 2 construction activities will be financed separately upon completion of further economic analysis. Preparatory activities being conducted at the site include vegetation clearing and landfill activities using material from the rock quarry for which a total of 67 people are employed. During the construction phase, the project is expected to employ a peak work force of 634 people during months 13 through 17. During the operational phase (after Phase 1), the project is expected to employ over 1,000 workers.