December 5, 2013
‘Transport savings from bioceanic corridors may be no that significant’
An expert warns that in many cases connectivity between the Atlantic and the Pacific may not be cost-effective.
The UNASUR Union of South American Nations is considering a series of integration projects, among them, some that “seem” to seek to link the subcontinent’s two oceans so that commodities from the region can reach highly demanding Far East markets.
However, Alfredo Sesé, a Technical Secretary of the Rosario Stock Exchange, warns that in many cases those plans may not be cost-effective. “Some seem to forget that in many cases nothing less that the Andes mountains have to be crossed,” he told about 500 port and trade officials from South American countries during a forum organized by the Rosario Port Complex ENAPRO authority in that city in late September.
The expert was participating in a panel of the role of South American bioceanic corridor plans and the more than a dozen waterways as an opportunity for port connectivity. The 2012 project portfolio of the Initiative for Integration of Regional Infrastructure in South America (IIRSA) — a forum of dialogue for the 12 members of the UNASUR — is considering a series of integration axes: Andean, South Andean, Capricorn, Amazon, Guyana Shield, South, Paraná-Paraguay Waterway, Central Inter-Ocean, Mercosur-Chile and Peru-Brazil-Bolivia.
Sesé said that three of those axes serve as a starting -point to highlight the importance of region’s waterways, particularly that of the Paraná-Paraguay rivers running through Brazil, Bolivia, Paraguay, Argentina and Uruguay. The axes of Capricorn, Central Inter-Ocean and Mercosur-Chile aim to build infrastructure to develop some regions of South America, he said, adding that many of the areas’ products are commodities, whose cost of transportation significantly affects the income of producers.
‘NOT SO SURE ABOUT SAVINGS’
The integration axes considered by IIRSA include energy and other projects to foster connectivity between railways and roads, and “they seem to aim to connect the Atlantic and Pacific,” Sesé said, adding that they are valuable initiatives which seek to enhance development of many regions that are very rich but suffer from infrastructure problems.
“However, he warned, one must be careful when discussing Ocean corridors because sometimes some say that several of these products of lower relative value in relation to their volume for transportation, will go from the Atlantic coast to the Pacific to reach Far East markets and they forget that there are other mechanisms of transport and connection and that in many of these cases, the connection must pass through nothing less than the Andes mountains. We have to be careful when we say that products which could well go out through Atlantic ports or waterways, could easily cross the mountains and go out through Pacific ports.”
If one takes the distances to the destination ports, the savings on these distances by sea are not that significant and, in many cases, may not offset transportation costs because the efficiency of rail or truck, their load capacity, is not the same in the mountains as in plain terrain,” Sesé said.
GROWING CROPS & CARGO
The expert said that more or less since 2000 until the present the production of three of Argentina’s leading grains — wheat, corn and sorghum — has clearly shown an increasing trend, despite some factors such as a crippling drought in 2009, and that production borders have been expanding into northern Argentina, western and southwestern states of Brazil, Paraguay with a still latent potential in eastern Bolivia.
In the early 2000s the Rosario port complex area participated in more than 71 percent of the shipments of grain, oils and byproducts of Argentina and in recent years this share reached 75.6 percent, he said, adding that, however, what was more remarkable is the fact that shipments of all Argentine ports have been replicating the pattern of the increased production.
The number of vessels making international voyages — not domestic ones nor barge trips — which entered the area from Arroyo Seco to Timbúes have also shown an increasing trend, as well as the number of ships entering the areas of San Lorenzo-San Martín-Timbúes and Rosario-Arroyo Seco.
If production continues to grow, and it seems it will, the same will happen with shipments, that is, this will be a prolonged challenge which must be addressed, Sesé said.
“What connection is there between this and ocean corridors? It is crucial to work on the waterways field, particularly on that of the Paraná-Paraguay rivers. Over these waterways there is a chance not only to bring downstream soy or other grains and iron ore from their production areas in the heart of South America so they can go through these terminals to the sea, but also possibilities for vessels which bring overseas cargo to download in some local ports some containers and general cargo and then go upstream to meet the demand in those regions,” he said.
The expert added that when speaking of ocean corridors, plans must be consider how to improve infrastructure to turn a comparative, nature-bestowed, static advantage — the fact that the region’s rivers enter the continent — into a comparative advantage. That is, to see what chances there are of more profits, wealth, growth and development, and of improving port accesses and trans-shipment operations to these port terminals to generate an efficient mechanism which allows overseas vessels to move from cargo areas directly to their final destinations or to complete cargo as is done, for example, in Bahía Blanca, and from there to final destinations.
‘LET’S TAKE ADVANTAGE
The distance from regional ports to the final destination is not much larger than the difference from some Pacific ports to China.
“I’m not saying that this is a minor distance. I just say that it is not so different and that we must take advantage of the waterway, which has lower transportation costs, lower road accidents ratios, lower fossil fuel consumption and lower pollution than land transport.”
In 2010 it was estimated that the total cargo along the waterway stretch between Confluence (Chaco) and the port of Santa Fe was about 15 million tons and already over a year ago it was forecast to reach 24 million tons by 2015, which means that there is a major transport potential.
“o improve the use of the waterways we have to encourage inter-modality (combined transport), terrestrial-fluvial transport, improve transfer times and costs, increase road capacity and adapt and regulate road and rail accesses to port areas, and build on what has already been proposed and signed, deepening the 28-feet river-sea stretch depth from Santa Fe to San Martín and the 36 feet from San Martín to the sea, carrying out the additional work necessary for safe navigation,‘ Sesé said, also highlighting the importance of the River Paraná-Tietê and urging Paraguayan and Brazilian authorities to build locks at the Itaipú dam. Also, he said, there is the need for further development of river navigation through rationally intertwined rules and principles. The Committee for the Use and Development of the Waterway along many institutions is working on transport model contracts and private dispute resolution systems.