BRACING FOR CHANGE

Colombia 2013 | TRANSPORT | INTERVIEW

TBY talks to Luis Fernando Andrade Moreno, President of the Agencia Nacional de Infraestructura (ANI), on the agency's latest progress in establishing transportation infrastructure in Colombia.

Luis Fernando Andrade Moreno
BIOGRAPHY
Luis Fernando Andrade Moreno has been the President of the Agencia Nacional de Infraestructura since August 2011. He was appointed by President Juan Manuel Santos after having presided successfully over the consultancy McKinsey & Company Colombia for almost 17 years. During that period, Andrade advised the reorganization of the most important companies in the country. He has also been Partner of McKinsey & Company in São Paulo, Brazil, and associate consultant for the same firm in New York. His career includes writing for an opinion column on management and business reorganization for the magazine Dinero. He has a degree in industrial engineering from the University of Florida and an MBA from the Wharton School of the University of Pennsylvania.

What are some of the future goals of Agencia Nacional Infraestructure (ANI's) future goals, and what strategies are you implementing to achieve them?

Essentially, our main objective is to increase the investment level per year from about $1.5 billion to $6 billion through programs that will improve roads, railways, ports, and airports. In the past, the average investment in transportation infrastructure had been around 1% of GDP, 50% of which was through public-private partnerships (PPPs). The current government aims to increase the rate of investment in transportation infrastructure to 3% of GDP, of which 2% would be through PPPs. We expect that by the end of the current government's term, we will have twice as many kilometers of dual-lane highways as we had at the beginning of this government. In other words, we will go from 800 kilometers of highways to 1,700 kilometers by 2014. In fact, by the end of the road program, we expect to have 3,400 kilometers of dual-lane highways in Colombia. In terms of ports, we are working on improving our merchandise handling capacity by 50% by 2014, and 50% in the next four years. We also expect to double railway capacity in the next six years.

What are the railway challenges and your prospects for the railroad in the Magdalena Valley?

The first thing to have in mind is that Colombia is only planning on the short run to develop railway infrastructure for cargo purposes. We are not planning right now on developing transportation for passengers by railroads. We are simultaneously working on all fronts: roads, ports, airports, and railway. We are working to maintain the infrastructure we already have in the Magdalena Valley, where only 300 kilometers of approximately 900 kilometers are being used. This first line does not require high levels of investment, as the infrastructure is already there, and we just need the operators to fix it and use it. The second line foresees a $6 billion plan to build new railway lines, and at ANI we are encouraging investors to take part in the projects through private initiatives via the new PPP law. In addition, we work closely with mining companies to develop railway projects so we can boost cargo transportation in the railway sector. Our strategy is for the private mining groups, who are the ones interested in developing railway infrastructure projects to invest in railways through private initiatives, but we are keeping in mind that in the future these railways need to be available to other sectors and companies. The next few years will be very important for the sector, and we expect to have the entire railway network connecting the coalmines from the Pacific, passing through the Boyacá region and continuing through the Magdalena Valley and reaching the Caribbean by 2019.

How would you assess the investment climate in the sector?

We have seen an increasing interest from foreign investors coming to Colombia, and we expect to have the participation of as many investors as possible as there is plenty of room and opportunities for everybody. Spanish, South Korean, and Brazilian companies have all shown a great deal of interest in our infrastructure projects and programs. However, there are companies from all over the world looking at Colombia. In this regard, we will soon open a round of negotiations with foreign companies to gradually tender about 25 to 30 projects.

“The current government aims to increase the rate of investment in transportation infrastructure to 3% of GDP. "

What are the main criteria you evaluate when tendering a project?

Increasing transparency in bidding processes has been one of the government's top priorities in the last few years, and we have successful experiences with Invías, our sister company, which tendered projects worth $1.3 billion. In this regard, we are setting registration processes publicly available that will be followed by a pre-qualification process in which we will tell companies one by one the criteria and minimum requirements to develop the project. That will enable us to create a shortlist of a maximum of six companies that will need to commit themselves to develop a proposal.