ITF offers policy suggestions for Buenos Aires

The International Transport Forum (ITF) has made a number of suggestions for policy in Buenos Aires in its Draft Discussion Paper 2017.

First, ITF said that infrastructure investments might solve bottlenecks and the focus on improving the port of Buenos Aires in particular could reduce transport costs and thus facilitate Argentina’s trade.

It noted that rather than extending existing concessions, the government has made a principled choice to open a public tender with competitive bids. The AGP has come up with a proposal based on the assumption that the port of Buenos Aires is only viable in the future if it has fewer but larger terminals with linear quays. While agreeing with this assumption, ITF raises concerns of whether the proposal in its current form will appeal to potential bidders.

Moreover, it said that the proposal for Puerto Nuevo is framed as a solution for the next two decades, but it is mostly only a temporary solution. The rapid increase of container ship size, consolidation of the container shipping sector and rationalisation of port networks means fewer but much larger call sizes. The container port of the future needs to be deep and large with a fast turnaround, it continued, adding that the port of Buenos Aires is, at the moment, none of the above.

ITF continued that the position of Buenos Aires within the port system on the East Coast of South America is under pressure. If other ports in the regions with deep sea access and larger terminals up their game, shipping companies might decide to cut out Buenos Aires altogether, in favour of cheaper options. This means that the task for AGP is delicate, ITF acknowledged.

This is not an issue for Buenos Aires alone, noted ITF. The question is what is the most effective future container transport system for Argentina as a whole? The trade competitiveness of Argentina would benefit from the lowest possible transport costs for its exports, suggested ITF. This might be achieved in different ways, including using Buenos Aires and also other ports that might not yet exist.

More frequent and faster feedering connections could also be a way to provide value added to Argentinian shippers, it said, avoiding some of the negative impacts of ever larger ships to a port that is highly constrained by its urban context.

In case the government decides that the tender procedure needs to go ahead quickly, ITF suggested that AGP build in some safeguards for potential bidders with regard to possible future port development.

Potential bidders for Puerto Nuevo terminals, it added, might want to be reassured that they would not be excluded from bidding or be disadvantaged in case there would be a future public tender in a few years for a new container port in Argentina.

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