chile Building on the proven success of an operating concession awarded more than a decade ago, Chile’s northern port of Iquique is now preparing a tender for a second terminal
Second time round
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uilt 83 years ago and located around 1,000 miles north of Chile’s capital Santiago, the Port of Iquique was built for the specific purpose of handling exports of locally produced fertiliser, which was the region’s most important industry at that time. Gradually over the ensuing years the production of fertiliser based on nitrate declined throughout the world, causing the region to suffer economic hardship for a while. In the 1950s, Iquique underwent a revival with the growth of fishmeal exports, which it was adequately equipped to handle using the equipment previously used for bulk nitrate handling. In the 1970s, the area around Iquique was declared a Free Trade Zone, which gave the port another boost – this time mainly for imports of value-added products ranging from clothes to electronics and automobiles. Today Iquique occupies 30 ha and comprises two finger pier terminals, each with two berths. One is the public terminal Pier 1, which has a 9.3 m depth alongside and is owned by the landlord port authority Empresa Portuaria Iquique (EPI). It is operated by a number of
The Port of Iquique today
The Iquique expansion project
private stevedoring companies including Agunsa and Ultramar, which provide various cargohandling services for general cargo imports and exports, including some containers. The second is the Pier 2 container terminal, which also comprises two berths each 290 m long. This has been
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operated since 2000 under a 20+10-year concession by Iquique Terminal Internacional (ITI), which is 60% owned by Sudamericana Agencias Aereas y Maritimas (SAAM), which in turn is owned by Chile’s Claro group, and 40% by Urbaser, a subsidiary of Spain’s Dragados.
Today, following the recent completion of a new highway, the port not only serves northern Chile as would be expected, but also a number of surrounding countries in the Andean Macro Region – Bolivia, Peru, Paraguay, Argentina and eastern Brazil. More recently, the presidents of Chile, Bolivia and Brazil signed an agreement to create a new corridor from Santos to the Pacific, which means that in time Iquique will receive significant numbers of trucks from Bolivia with export cargoes including minerals and ores, cattle, timber and grain. As a result, the port that started from such humble beginnings has now been transformed, with increasing interest being shown in it by shippers because of its good hinterland links and market access. Currently the port is too small and under-equipped to handle additional anticipated cargoes as well as the increasing size of vessels. According to Alfredo Leiton, EPI’s general manager, while Iquique handles an average of 1.5 vessels a day to/from the Asia-Pacific markets, it is now vital that it expands in order to face the challenges of the future.
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The new Iquique concession area
Privatisation is the answer Since the concession was awarded in 2000, ITI has increased its berth capacity to service ships of up to 11.4 m draught and 337 m LOA. This has been matched by a corresponding increase in annual cargo volumes, from 1.33m tons in 2000 to 2.71m tons in 2011 (+103% for the period). Moreover, ship size (GRT) has also increased by 103%, while containerised volumes have increased by 133.4%, from 814,567 tons in 2000 to 1,900,917 tons in 2011, of which 94.8% were handled by ITI. Thus 10 years after the first concession and its proven success, Leiton believes that the only way to meet the increasing demands on the port’s facilities is to develop
Pier No 1, which has suffered years of under-investment by the state. “Only the private sector through an operating concession can provide the modern infrastructure and handling equipment needed to accommodate and handle the new Panamax vessels,” he said. The plan is for the eventual concessionaire to increase
Alfredo Leiton, EPI’s general manager
the capacity of Pier No 1, adding at least a new berth for Panamax vessels, through a 30-year concession – the maximum allowable by law. “The concessionaire will be required to develop, maintain and operate the terminal; to increase berthing length to 399 m, capable of handling vessels up to 11.4 m draught with an annual handling capacity 600,000 teu; and to increase total teu throughput to around 850,000 teu by 2025, up from the current 250,000 teu,” added Leiton. To be equipped with shipto-shore cranes in addition to the current four mobile harbour cranes, the plan is for the terminal to occupy 1.5 ha of operational space and a 5 ha support area, including three warehouses, within 10 years from the award of the concession. The bidding process Chile’s Law No 19.542 of 1998 sets out the bidding processes to modernise the state’s port sector and stipulates, in Article 19, “that the construction and development of new port terminals must be executed via port concessions through public bids”. Consequently the concessionaire must be one that operates with the highest of technological standards and outstanding levels of terminal efficiency and productivity. Any bidder (either domestic or international) meeting these technical and asset requirements may participate in the bid. “Bidders must have at
least three years of prior experience as port operators and have moved at least 100,000 teu during the last five years. Additionally the bidder must have a minimum owned asset value of US$60m,” said Leiton. Amongst other conditions, which include service quality requirements and maximum vessel stay for main load types, the concession contract will include safeguards to ensure that the required service quality is promptly achieved or is delivered within agreed milestones, including fines for non-compliance and eventual termination of the concession after predetermined time periods. To date, the concession bases are being reviewed by the Free Competence Defence Court (Tribunal de la Libre Competencia, TDLC) and are about to be made publicly available at www. licitacionpuertoiquique.com. Although the tender documents are being “put on the table” for as many interested parties as possible to look at, the public bidding process will not begin until sometime during Q2 2013, with the intention of announcing the successful bidder at the end of 2013. “We are proud of what we have achieved in Iquique and we are excited about the prospects of expanding the port through the concession process. We can hardly believe that in less than a year our long-awaited and planned dream will come true,” Leiton concluded. n
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