MSC is the largest liner operator in volume terms calling at the Port of Buenos Aires and has according to Luis Lajous, head of MSC’s Argentine operations, become increasingly frustrated with the high cost of port operations in Buenos Aires and the failure of the port authority to deliver on a number of key issues ranging from implementing key dredging works through to adding new terminal capacity. The MSC submission to the government agency, Comision Nacional de Defensa de la Competencia, covers over 30 pages and makes a number of key points, all of which, MSC believes, add up to clear evidence of the inability of the port to deliver competitive service,particularly in the area of terminal services.The key points are:

Contracting terminal sector Since 1994, the time when five container terminal concessions were originally issued in Puerto Nuevo, Buenos Aires, the number of terminal operators has shrunk to an effective level of two.This, MSC notes, has come about as a result of the bankruptcy of the operator of Terminal 6,Intefema,in 1996 after which the terminal was kept closed. Subsequently, in 2000, Terminal 4, owned by a consortium of companies headed by Gabriel & Cia, was acquired by Maersk and employed as what amounts to a dedicated terminal. Following on from this, in 2001,Terminales Rio de la Plata (TRP - P&0 Ports), operator of Terminals 1 & 2, acquired Terminal 3 from Terminales Portuarias Argentina. The net result was, MSC suggests, just two common user terminals – TRP and BACTSSA, the latter being a Hutchison-owned facility.

In Dock Sud, there is also Exolgan which entered the container terminal market in 1995, but MSC cites the lack of rate protection for shippers using this terminal as a big negative against its use, as well as internal rulings regarding environmental issues. Capacity review confirms no choice

An assessment of the capacity of the existing common user terminal undertaken by MSC, including Exolgan, on a theoretical basis, confirms the line’s limited choice. This concludes that the only terminal it can call at is TRP where its annual volume of 227,000 teu is presently handled. A move to BACTSSA would result in the saturation of the facility to over 150% of capacity and at Exolgan it would push the terminal’s utilisation level up to over 90%.

Also in a capacity context, MSC highlights what it sees as two major failings of Administracion General de Puertos (AGP), the Port Authority of Buenos Aires: the capacity planning undertaken for its Masterplan and ongoing draught constraints. On the former point, it says: “For the purpose of estimating infrastructure needs the Master Plan assumes growth rates of below 6.5%, a number that is ridiculously low considering the actual annual growth rate through Buenos Aires in the period 1991-2005 was around 15%.” It further points out that if traffic grows at 10% in the period 2005-2010 Buenos Aires will be short of 15 hectares of terminal operating area and with 20% growth it will be over 70 hectares short. Total container traffic through the Port of Buenos Aires in 2005 was 1.37m teu, more than double the volume handled 10 years earlier.

Aside from the lack of choice, says Mr Lajous, there is a real prospect that if serious steps are not taken then the port will come up against a capacity wall within two years. The Terminal 6 issue, as outlined in the following feature, must be resolved soon and, beyond this, serious measures must be put in place to provide adequate capacity to handle Argentina’s growing foreign trade over the medium to long term. The draught issues, for one, are seen as equally serious and already an impediment to the efficient conduct of Argentina’s foreign trade.

MSC is not alone in pointing a finger at the ineptitude of AGP. Patrick Campbell, secretary of the Argentine Chamber of Shipping,points out that it is not money that is preventing AGP from pressing ahead with essential tasks – “the port has money,” he emphasises – but suggests that it doesn’t have the authority to get things done efficiently and on time. This is a view shared by Gustavo Gordillo, president of the Private Port Operators Association; and one reminiscent of their views on the current Terminal 6 concessioning debacle.

Luis Angel Diez, Interventor, AGP, the port authority’s senior executive, highlights the fact that the port authority expects to invest some US$80m over the next two to three years spanning dredging works and other infrastructure improvements.In light of this,he contends that the port is not in any danger from a capacity standpoint, particularly with contingency plans being drawn up to utilise inland depot areas for container storage if necessary. For the longer term, he also points out that the port intends to realise an eastward expansion entailing moving the existing breakwater. The fact, though, that these projects are all still on the drawing board leads many industry participants to believe that too little is being done too late.