Fernando Puntigliano, president of the National Port Administration (NPA) of Uruguay (which has a staff of 800), is enthusiastic. Never in the history of Uruguay have such high investments been made in port infrastructure since the port of Montevideo was built 100 years ago. Approximately USD 130 million in state funds and USD 130 million in private investments are to be poured into upgrading seven ports which come under the roof of the NPA over the next six years. They are Salto, Paysandu, Fray Bonitos, Nueva Palmira, Colonia, Puerto Sauce (Juan Lacaze) and Montevideo. Negotiations are in progress concerning further private investments.

The first four ports are located on the River Uruguay, while the other three are situated in the Rio de la Plata estuary and have direct access to the southern Atlantic Ocean. The total volume of freight handled in the ports was nearly 10 million t in 2006, 18% more than the previous year. Massive growth of 150% is predicted in the hinterland (Paraguay, Bolivia, northern Argentina and southwest Brazil) over the next five years. Approximately 80% of the current volume passes through the port of Montevideo (up 14% to 500,000 teu in 2006). Around 54% of the containers and 50% of the total volume of freight are destined for markets other than Uruguay.

Gateway to Argentina, Paraguay,Bolivia and Brazil

The port of Colonia serves mainly as a ferry and ro-ro facility, with heavy traffic to Argentina. About 125,000 vehicles were loaded or unloaded in Colonia in 2006. This was 26% more than the year before. Meanwhile, vehicle handling has stagnated in the port of Montevideo. The overall volume of freight passing through Colonia shot up by 173% in 2006. The surge was caused by political confrontation between Uruguay and Argentina, which led to the closure of roads and bridges between the countries. The slack was taken up by the shipping industry.

The major part of the earmarked funds will be invested in the port of Montevideo, which stands out as the import and export port for Uruguay, as well as a transhipment hub for Argentina, Paraguay, Bolivia and Brazil. One of the projects will be to deepen the access channel to allow larger vessels operated by the most important shipping lines (Hamburg Süd, Maersk, MSC) to dock. Progress has already been made in that the channel was deepened from 10 m to 10.5 m. In addition, construction is under way on a 350 m quay wall and a berth with a water depth of 14 m. This will be ready for use by containerships from 2009. A further quay facility is being built for multipurpose vessels. This one will be 275 m long and will also have a water depth of 14 m. Plans also exist for a 275 m private terminal quay (water depth 14 m) for forestry products. This is scheduled to open for operations by 2010. The requisite, long-drawn-out process of calling for tenders adds an element of uncertainty to these plans.

The fishing port is to be moved to an area outside of the existing port to make room for more breakbulk handling. The NPA hopes that the new USD 30 million facility, which is scheduled to open for operations by 2010, will serve as a base for the domestic fishing industry as well as for Spanish and Korean fishing fleets. Both countries have already signalled interest.

The river ports are to be upgraded too, in order to promote the exchange of goods with neighbouring countries via the Uruguay and the Parana. Approximately 49 million t of freight are transported on the Parana annually, and another 12 million t sail through Argentina on the Uruguay.

Improving hinterland connections

The port of Montevideo has regular river feeder services reaching up to 300 km into the hinterland. The routes are operated by shipping lines such as Hamburg Süd, Maersk, Cosco and others. So far it has not been possible to develop reliable, just-in-time intermodal hinterland connections. The private economy lacks public start-up financing of the kind that the NPA has observed with its partner port Hamburg (Germany), with which it signed a cooperation agreement in October 2005. Nevertheless, the port of Hamburg serves as a model for how a public-private partnership can be established to provide port marketing services. Such a venture is now to be launched in cooperation with private port businesses in Uruguay.

Puntigliano is convinced that in the medium term he will be able to market his port as a gateway to South America just as successfully as the port of Hamburg positions itself as an entryway to Scandinavia and Central and Eastern Europe. «We are the most productive port on the east coast of South America,» he was proud to say. «We fulfil all requirements of the international ship and port facility security code (ISPS) and we are currently working to meet the stipulations for CSI (Container Security Initiative) certification. We will also soon have a container scanner at our disposal. Our port fees are about 40% lower than Argentina’s.»

The economy is what is driving growth in port handling. Last year the Uruguayan and Argentinean economies grew by 7% and 9% respectively. Nevertheless, the NPA and the ministry of transport and economics are aware that economic growth alone is not enough to secure sustainable increases in port business volumes. That is why they are working to raise the standards of the port, create free trade zones, erect a cellulose factory and build dry ports (inland terminals) as can be found in Spain (e.g. Madrid). There is already close cooperation with the Spanish national port authority.