Developing the future port of Buenos Aires

Buenos Aires port
The port of Buenos Aires. Source: Buenos Aires Government

The port of Buenos Aires, Argentina’s main container gateway, is developing to meet the challenges of today’s shipping industry: larger vessels, bigger call sizes, consolidation among the players. The Port Authority – La Administracion General de Puertos (AGP) – plans to deepen the access channel, to change the port’s current layout consisting of finger piers into a linear quay line through land reclamation and also to move from today’s three terminals to a single one. The latter means that only one out of three terminal operators will stay in Buenos Aires after the concessions expire in 2020. Or will it be a totally new entrant?

Some time ago we already wrote on the major changes that are going on in Buenos Aires. Currently the port hosts three container terminals located in Puerto Nuevo: Terminales Rio de la Plata operated by DP World at Terminals 1,2 and 3 (concession expires in November 2019); Terminal 4 operated by APMT (concession expires already in February 2019) and BACTSSA in Terminal 5 operated by Hutchison Port Holdings (concession expires in October 2019). Some sources say that AGP will extend all these existing concessions to 2020.

But a public tender to select the single terminal operator is scheduled to be announced by AGP in early 2019. The new concession’s term is said to be 35 years with a possible extension of 15 years more, which makes it up to 50 years in total. The investment into the port’s development project is evaluated at USD 1.2 bln, of which 50% is to be covered by the Argentinian government and 50% by the new terminal operator.

Some experts suggest that the most probable candidate to win would be APM Terminals. But will the development project proposed by AGP be appealing to APMT, or to any other potential bidder?

Olaf Merk in his work “The container port of Buenos Aires in the mega-ship era” analyses the proposed project and other possible strategies for the port’s development. Buenos Aires is by all means an interesting market for a terminal operator, not surprisingly we see all global players there: DP World, APMT, Hutchison Port Holdings, as well as TIL and PSA in the port’s other area called Dock Sud and ICTSI in La Plata. But this “interest of potential bidders cannot be taken for granted”.

He says: “The container port of the future needs to be deep and large with a fast turnaround. The port of Buenos Aires is at this moment none of the above. The AGP proposal will only solve these challenges partially… If other ports in the region – with deep sea access and larger terminals – would become more attractive, shipping companies might decide to cut Buenos Aires out some of their loops if they have cheaper alternatives available, e.g. in the form of hub-and-spoke networks.”

Therefore, he suggests to adopt a long-term vision on the question of the port’s future and use this moment of expiring concessions to discuss other strategic options, like for instance, a totally new container port in a different location, leaving Buenos Aires as a feeder port.

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