UP AND RUNNING

Colombia 2017 | TRANSPORT | INTERVIEW

TBY talks to Miguel Centanaro, President of Ferrolat, on the urgent need to invest in Colombia's railways, construction of the Ferropetrol line, and the company's targets for the year.

 Miguel Centanaro
BIOGRAPHY
Miguel Centanaro was a business administrator at the University of Cartagena, a recipient of the National Research Award (Analdex), and a candidate for a doctorate of business administration at the University of Liverpool. He has over 30 years of experience in formulating, evaluating, and structuring projects. In addition to Cenconsas and Ferropetrol, he is also the President of Francolex, Kunzell, and Constructora Tibabita. He has been an advisor for more than 30 bills and has outlined four successful railway APPs as well as 12 building APPs, airports, roads, tunnels, and parks throughout Colombia.

How would you characterize the current state of Colombia's rail projects?

There are currently seven rail projects in Colombia and an additional three under preparation. Taken together, these amount to more than 2,500km and would make a complete national railroad system. The country already moves more than 300 million tons of freight each year, domestically and internationally; therefore, we need an efficient transport system such as railroads. We have a developed system of trucks, but the cost is higher and less efficient than rail. Since our goal is to develop an entire national railway system of more than 2,500km, we need the help of big investors such as JP Morgan or Goldman Sachs. We also need an excellent construction company that knows how to build railroads and the requisite infrastructure, not to mention the help we will need from manufacturers of locomotives such as GE and Bombardier. In addition to an excellent operator, we also need help from the producers of the freight and the companies that make and move the products. We have made some contacts with foreign companies; however, when they see the state of the Colombian railway system, they prefer to remain in a waiting position. We also need the support of the government, which cannot wait until firms simply come to Colombia of their own volition and develop the railroad system: it first has to help make it more attractive. It is not because we do not have a sovereign guarantee that we do not want one; not only do we need the signature of the Minister of Finance, we also need the assistance of the President, the Vice President—who is in charge of infrastructure development in Colombia—the Minister of Transport, and the Minister of the Environment. Indeed, we need the help of every manager in the Colombian government if we are ever to develop this country's railroads.

Despite the lack of a master plan, how would you describe the current level of interest from foreign firms?

I see that companies are interested; however, if there is no clear path for how to move forward with the project, they ultimately lose faith. For example, we had three large Chinese companies that expressed interest in winning a contract to build Colombia's railroad infrastructure; however, who will hand out this contract? We need investors; we need political and financial institutions, companies that will make the loans, and companies to handle the logistics and operations. We need many companies to be involved in the development of Colombia's railroads. There are companies that are interested; however, if they do not see concomitant interest on the part of the government, then the whole project looks like a mere private undertaking, when in reality it needs to be a national project.

What is the timeline for beginning construction of the Ferropetrol line?

We still do not know. The original date was January 2017, but that is no longer the case. What needs to happen is a great collective effort in which everyone joins forces: all the builders, generators, the entire government and all the financial institutions and investors—we need to bring them all together to develop Colombia's railway system. Maybe a year or two after all the relevant parties have sat down together the construction of the railroads can begin.

What goals do you hope to accomplish by the end of 2017?

By the end of 2017, we would like to have a structure and company that goes beyond our status as just the Ferropetrol project development company, but has become a fully fledged railroad holding company called Ferrolat and has brought all the relevant concessioners, builders, constructors, and operators into the fold of one company whose sole objective is to develop Colombia's railroad system. Not one but all seven projects. By the end of 2017, we will have this structure up and running in Colombia.