How would you assess Colombia's port infrastructure?
MAURICIO SUÁREZ RAMÍREZ The government came to concession companies, such as the one we have in Santa Marta, and negotiated significant investments of over $1 billion for the four main port terminals. In Santa Marta, we made a compromise for $127 million, $100 million of which had to be invested between 2008 and 2013. The same had to be done at the three other terminals. We are now finishing the first stage of the second phase of concessions. We were also paying royalties to the government of $2.5 million. Now there is new technology, more efficiency, increased investment, and better infrastructure—it is an entirely new system as a result of these investments. The success has been complemented by the government, which has made investments outside of the terminals, specifically in terms of connectivity between them. More than 70% of the Colombian market is located over 800 kilometers from the coast, and it is very expensive to transport goods because of the topography and roads in Colombia.
RENE PUCHE Since the privatization of the Sociadades Portuaria back in 1993 there has been a complete turnaround and change in the way the ports are servicing the community. The profitability of the port is higher than it was before, and the productivity and efficiency of the port's facilities have increased dramatically. The change has been fantastic in terms of facilities and in terms of the infrastructure inside the port. The limitation, however, comes once you leave the port. That is where we are still lagging behind. We do not use the rail or the Magdalena River because there is a lack of infrastructure in Colombia. To give an example, to bring a vessel from the Baltic with 25,000-30,000 tons to Colombia will cost you $35 or $40 per ton. To bring one truck from Barranquilla to Bogotá will cost you almost $100 per ton. You are talking about 1,000 kilometers versus 10,000 kilometers.
Do you have any new alliances on the horizon?
MSR There is one potential alliance that is very promising, and we are betting on its formation. It is with a Colombian logistics company, OPL Cargo, which handles more than 2 million tons of cargo in Colombia. It operates trucks and coordinate logistics for its customers. We are working to make an investment with it, and bought 300 acres of land with 2.4 kilometers of river for a dock terminal. It is 400 kilometers south from the mouth of the Magdalena River. Railroads cross over the 300 acres we bought, so we expect to build a multi-modal terminal for the railway to connect with Santa Marta as well as a river to connect to our terminal in Barranquilla. There, we are making new investments with SSA Marine in a container terminal, a project slated to begin in April 2013.
What are some advantages of having the Rio Magdalena to transport goods inside Colombia?
RP The farthest you can go by the river is Barrancabermeja, but you cannot go everyday of the year. For example, in February, there is no water there. You have to wait for the rainy season. We have to work on the port. If you look at Barranquilla, it is not facing the river. It would be more efficient and cheaper to go from point A to point B, because no one else has that. Santa Marta or Buenaventura don't have that. We should be able to transport goods around the country cheaper, but we need to work together.