By Andrés Orrego Siebert
Peru continues to add port milestones. The two most recent have taken place in the Arequipa area, as the addendum for the expansion of the Port of Matarani was signed there, the first port to be concessioned 30 years ago, renewing this contract for another three decades, which will guarantee an investment of more than 700 million dollars. In the same way, an inter-institutional agreement was signed to promote the development of the Port of Corío which, if materialized, would be another point on the maritime backbone with which this country seeks to establish itself as the great South American hub.
These two projects, however, are not the only ones the country has in its portfolio, as new ventures and developments are already emerging in Tacna, Ilo, Callao itself, or Lambayeque. PortalPortuario spoke about these challenges with Juan Ramón Arrisueño, the current president of the National Port Authority (APN) of Peru.
“Definitely, there is an immense challenge. What we must do now is give more power and decentralize the development of logistic-port areas. This is the goal we have and we are studying how to achieve it. Peru is a kind of pubescent country, because everything is becoming too small for it. It is a country that has already grown and everything is tight, the shoes don’t fit and the shirt doesn’t button. So, all the accessories must be worked on so that each zone, north, center, south, and east, can develop their own logistic-port dynamics. This is a good symptom that the country is growing and we must help it so that this growth is sustained,” commented Arrisueño, who arrived with over 20 years of experience in the sector to the presidency of the APN, a position he has held for four months.
Was the signing of the Matarani addendum a turning point?
Making a historical recount, in the 1970s the Empresa Nacional de Puertos del Perú was created, incorporating all the maritime terminals that existed on the coast with the aim of standardizing them. At that time, there was a military government that gave great importance to the state company that consolidated those 15 terminals, among which was also Matarani. Although each port had its own style and results, the potential of Callao was felt, which ended up, with its results, supporting the terminals that were not profitable. In 1998, the first concession was finalized, which was Matarani, and in its contract, made at that time, it was allowed to extend at the end for another 30 years. We have not yet reached those 30 years which are completed in 2029, but there are a series of mining demands that are about to enter production, which opened the imperative need for Matarani to start making additional investment to its contract in order to be ready when these projects begin to generate their production and, after technical analysis, it was deemed appropriate to grant the extension with a commitment of 705 million additional dollars. This addendum has been very meticulously evaluated for almost two years.
How strategic is Matarani for the Peruvian port system for your country and neighboring countries?
The function of Matarani is key for the development of southern Peru, because it is a port that already exists with productivity and efficiency conditions of an international level.
We have port projects such as Tacna or even the intention of the Regional Government of Arequipa to promote Corío and some other projects that are in the process of being studied, but, at this moment, the participation of Matarani is vital for the consolidation of all of Peru’s production.
It mentions Corío and Tacna. Will there be other major initiatives on the Peruvian coast?
The National Port Authority is focused on continuing to promote further port infrastructure development. We have, for example, the case of Lambayeque, in the north, where a private company has been granted temporary technical viability, and they are conducting all the studies to obtain their definitive technical viability. The dynamism that Peru has adopted in port infrastructure development is important beyond the reality that Chancay represents.
In this new Matarani project, what is the immediate next step? When does it start?
Upon signing, there is an initial investment commitment of USD 350 million. This means the development of new docks for mineral cargoes, breakwaters, infrastructure, equipment, and everything necessary to meet this new demand that the port will have.
You mentioned that Peru has adopted a dynamism in port development beyond Chancay, why? What is the reason for this?
It must be taken into account that almost 70% of international trade is now in the Asia-Pacific scenario, and this places us, in a way, on the front line regarding China, India, and that entire region of the world. The case of Tacna, for example, is an interesting project because the distance from the Peruvian coast at that point to Bolivia, Brazil, and Chile is immediate, which is why we see that it could be a supranational port beyond the tension that the southern zone may have in the requirements of those countries, especially Brazil and Bolivia, which have no contact with the Pacific and therefore see their logistics to Asia as complicated. On the other hand, Corío is another possible project that is very incipient in Arequipa, which is an area that has 524 kilometers of coastline and only has one port, which is Matarani, considering that Moquegua, which has 150 kilometers, has seven port terminals, so there is still room for inter-port competition in southern Peru.
How does the north fit into this logic of competition and port ventures?
If we go to San Martín, there you have Marcona which, soon, will have a mineral terminal, but there is also Paracas, now very focused on agribusiness. So, what will happen with Peru is what happened with Spain many years ago when terminals appeared, which – little by little – became specialized, focusing more on the content of the containers than on the movement of the boxes themselves, because each content has a temporality, so each terminal has to be prepared for those temporalities. Furthermore, there is Brazil’s need to access the Pacific via the closest route, which is through us. That makes developing ports in Peru tempting. Obviously, not all of them are going to be the size of Chancay, but the case of Lambayeque is interesting because it has five regions that have agreed to have a single exit with the projection of a railway line to connect the Amazon with the Pacific.
You stated that Tacna could be a supranational port. Is Peru going to compete with Arica?
It is an inter-port competition like any other.
There are ports that, in some cases, compete for the same area of influence and in others they do not. Tacna has the projection to build a train that goes straight to Brazil, stopping in the southern area of Brazil, specifically, Rondônia, where there is a very important production that has no way to reach the sea. If it goes through Santos, the route is very long, but if it is through the Pacific it is the opposite. That is the option that the Tacna terminal has, which already has its project and Master Plan approved, so it will compete with Arica for being very close, just as Ilo competes with Matarani, so these are competitions that occur and that, in the end, benefit the user.
He made a reference to the Spanish port system and its specialization. How will the Peruvian port system look in the coming decades?
Very easy. Just by differentiating between mineral load ports and containerized ports. With that single difference, the ports will be more agile and efficient. That is what we are going to tend towards. At some point we will reach a point where new ports will emerge and one of them will give a negative marginal and will have to disappear, because that is how crude competition is. However, the presence of options for the producer improves the production and economic pace of a region or a country.
Chancay is already positioning itself as a reference port. The curious thing is that its activity decreased Callao’s participation, without the terminals of that port reducing the transferred load. Why does this paradox occur?
Prior to Chancay starting operations, we had the idea that a lot of cargo from Callao would go to Chancay, because Cosco had its own dynamic through Callao, but we are being surprised by how positive it has been, because Chancay appears with new cargo that arrives at that port, which frees up space for DP World and APM Terminals to receive other cargo that might have moved and that makes the pie have grown. That is what happens when you place a dock anywhere on the coast, as it generates a synergy, a development engine and the emergence of a lot of activities around the terminal.
What about the land side? Is it a pending task?
Land connectivity is a pending task and is fundamental for an adequate supply for the production levels that the terminals may have. It is a task of the Peruvian State to promote those physical connections that make logistics flow as it should. Nowadays, we have that big problem of cargo that leaves the south and goes to the north, Lima not being its point of arrival, but it has to cross it. Crossing Lima with a truck can take from five to seven hours depending on the time you try to do it. Obviously, the Ministry of Transport is very concerned about overcoming this and it is a problem that has been generated by a lot of production in the ports. Although Chancay does not have the adequate land connection, it relies on the maritime connection thanks to our Cabotage Law, which -in some way- gives us a breather for the moment.
Another pending issue is the Antepuerto in Callao…
We have that pending and we are looking at it with DP World and APM Terminals to work on this antepuerto of about 30 hectares to be able to untangle the congestion of trucks that exists in the surroundings of the Port of Callao, which will allow us to remove them from the street, take them to an orderly space and, through appointments, they can enter the terminal where they are required.
All supervision and control tasks would be carried out in this area, which is very close to the port terminal, thus providing a solution to a congestion that, at times, is difficult to manage and which increases logistics costs.
How will this space be managed? How will two competing terminals come to an agreement?
One thing is for these two operators to enable the space for this logistics activity zone, and another is for a third party to come and operate it. We are in those conversations to define the dynamics, but it would not be either of the two who administers it, but rather a third party through a concession to provide operationality.
To address all these challenges, how is the human capital that integrates into Peruvian ports?
I would say that in Peru, in general, the population is extremely entrepreneurial and that makes everything move forward, but training is always a challenge. That is why we have had an approach with the Spanish port system and our workers are going to train and specialize in Spanish ports. Efforts are being made to specialize the Peruvian workforce in logistics and port matters, especially because ports are modernizing and systems are too, and we are left with the workforce of the old port operator.
Another thing that has also been updated is sustainable development. Where is the Peruvian port system in this aspect?
We have made an important leap in sustainability and there are ports that have made investments to make this a reality. DP World has a whole set of electrical equipment and a station that supplies electricity to its equipment. The other is Chancay, where everything is electric, nothing there uses fossil fuels and they have their own electrical network, so they do not consume energy from the city, and in Paracas Port Terminal there is an electric hopper for unloading clinker, and with Paita they are working to transform the cranes they have to convert them to electric, while APM Terminals is also evaluating investments. This is important because it helps the country meet the Sustainable Development Goals, for which, in the same way, we are looking at electrical supply systems for vessels, perhaps not from the dock, but through barges as is done in the United States.
