NEW PORT COULD BOOST PERUVIAN FRUIT EXPORTS

COSCO vessel CSP has big plans for Chancay Port

Cosco Shipping is developing its $3billion deep-water general cargo and 1million TEU capacity container port at Chancay. Rob Ward explains further.

Work on this new port is expected to start by April of next year, a senior executive in Lima confirmed, after Cosco Shipping Ports filed a revised environmental impact study in October.

“We can now expect government approval for February 2020, said CSP’s CEO Carlos Tejada.” Cosco Shipping Ports aims to start construction on the US$1.3bn first stage of its Chancay port, which will have 16m depth, by April 2020, he said, adding that the project will boost the Belt and Road initiative to foster improved transportation links between China and Peru plus the rest of West Coast South America.

Various sources in Callao, the biggest port for containers along the West Coast of South America (WCSA) and main gateway to Lima and Peru, told Port Strategy that Cosco is already planning to move deep-sea services there to “avoid congestion at Callao” as well as “to bring down costs” and better serve the fast-growing fruit and vegetable exports from Peru.

A manager for Inca Lines, one the biggest NVOCCs in Peru, stated that Chancay will be a massive boost for key Peruvian exports such as avocadoes (Peru is third largest exporter in the world), blueberries, guava, oranges, grapes, potatoes, seafood and fishmeal.

“The main reason the Chancay project will be such a benefit to shippers is, I believe, that it will help them to drastically reduce costs for many of our important exports,” he stated, adding, “This is especially the case for fruit exporters from the central regions of Peru, who have to take the long journey north to Paita and it could also become an alternative to Callao.”

Peru's fruit exports, subdivided into fresh, frozen, canned, and juice, make up over 50% of Peru’s agricultural shipments and they grew by 9.5% during the first quarter of this year compared to the same period in 2018, according to Deputy Foreign Trade Minister Sayuri Bayona, adding pressure onto existing export corridors.

The Inca executive added that imports from Asia, especially machinery and mining equipment, should also receive cost reductions and better transport logistics with the development.

One Lima based shipping agent, who did not wish to be identified, added that the Chinese and Peruvian governments were keen to bolster relations between the two Pacific countries, especially via infrastructure projects such as Chancay.

“Peru and China are forging ever closer links and Chancay is a perfect example of that,” said the Lima agent. “We also think this will shake up those setting the box handling charges in Callao and it will reduce pollution in the cities of Callao and Lima if fewer trucks have battle through congested roads of Lima to get to Callao. I think Cosco might be able to move some of their services there by 2022.”

He added that Cosco Shipping would probably first drag over to Chancay its Asia to WCSA service, which also includes CMA CGM, Evergreen, OOCL and Pacific International Lines (PIL).

It was only in May of this year that Shanghai-based Cosco acquired a 60% stake in the port from Volcan, a Peruvian mining company that exports zinc, lead and silver. Together the two companies now intend to build the four berth US$3bn port facility some 58 km north of Lima, where it will compete with DP World Callao and AP Moeller Callao.

The new environmental impact study is being modified to include a tunnel, and an increase to four terminals compared to one in the original project. The companies are advancing all relevant permitting simultaneously and don’t expect delays, according to Tejada, adding: “Our vision is to convert this port into a Pacific coast hub, bring cargo directly from Asia and then distribute it around the region.”

As if to emphasize the importance of the Peruvian-Chinese connections, the President of Peru, Martin Vizcarra, attended the Chancy Project Official Transfer Ceremony earlier this year and extolled its virtues.

Mr Vizcarra said, “The signing of the closing certificate by companies from Peru and China is a milestone. The companies from China and Peru jointly invested and developed the Chancay Project, which laid a solid foundation for Peruvian economic development, as well as trade cooperation between China and Peru.

“The construction of the Port of Chancay will contribute to the regional development and we expect to develop Port of Chancay into one of the most important hub ports in South America and logistics center near the Pacific Coast, which will promote the regional trade and the trade between China and the Latin America.”

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