Infrastructure - Airports, Ports & Roads Sectors in Peru

An Expert's View about Transportation and Storage in Peru

Posted on: 5 Oct 2010

The expected growth creates the need for an adequate and efficient transport infrastructure. The Peruvian government will continue offering 30 year concessions for highways, port and airport projects around the country.

Sector briefing Infrastructure - Airports, Ports & Roads - Opportunities in Peru Why Peru? Peruvian freight transport turnover is projected to grow by an annual average of 7.3 per cent in the 2007-2011 period, faster than overall projected annual average GDP expansion of 4.9 per cent in the same period. By value, the transport sector is expected to grow to be worth US$2.95 bn in 2011 representing 9.7 per cent of Peru?s total GDP. The expected growth creates the need for an adequate and efficient transport infrastructure. To meet this need, the Peruvian government will continue offering 30 year concessions for highways, port and airport projects around the ? Peruvian economy among top performers country. in Latin America with average 6% GDP growth 2001 - 2009. ? UK is second largest investor in Peru with Find general information on the Peruvian a stock of US$3.8 bn in 2009 contributing market conditions on UKTI?s website. The 20% of total FDI stock. Doing Business Guide for Peru gives an ? Peruvian government encourages and overview of Peru?s economy, business culture, protects foreign investment. potential opportunities and an introduction to other relevant issue. UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru The plan is for a greenfield airport in an area Opportunities called Chinchero (3800metres above sea level) capable of taking at least medium haul flights Opportunities for UK infrastructure companies (the technical studies being conducted by ALG in Peru are growing ? key areas are detailed will help determine if long haul flights are below: possible at that altitude) 24 hours a day. For Peru, medium haul means direct flights from as AIRPORTS far away as Atlanta and Miami (and therefore The Peruvian airport system is composed of 56 connections to Europe and beyond). As tourist airports and airfields around the country. Many interest in Machu Pichu and surrounding foreign airlines, including European and US areas is high and growing (current passenger Carriers, serve Peru. The majority of foreign numbers at Cusco airport are growing by 10% airlines fly into Jorge Chavez International pa), this should mean a project of considerable airport in Lima. size, attracting international interest and key companies. In 2001, Lima Airport Partners (LAP) - basically the operators of Frankfurt airport, in They plan to present the project at the Global association with US construction company Airport Development conference in Dublin in Bechtel - won the bid to operate, maintain, November 2010. develop and expand Jorge Chavez Airport under a 30-year Government concession. PORTS In 2006 the consortium Aeropuertos del Peru Peru is located in the middle portion of South (ADP) was awarded a 25-year concession to America's Pacific coast thus providing natural run and develop twelve northern regional access to markets in Asia and the Pacific rim, airports. the USA and the Andean Community. The Peruvian port network is composed of 23 In July 2010, a 2nd package of 6 southern docks of which 20 are in marine port terminals regional airports will be offered for and three in river port terminals. The 20 concession (Andahuaylas, Arequipa, Ayacucho, marine docks are distributed among seven Juliaca, Puerto Maldonado and Tacna). The regional port terminals. estimated investment is US$266 million. Cusco Airport, the busiest of the provincial airports and In August 1999 Terminal Internacional del Sur the landing point for visitors to Peru?s main SA (TISUR), a private corporation won the tourist attraction, Machu Picchu, will be offered concession to run the Matarani Terminal Port, in a separate tender process. the principal port in the south of Peru. New International Airport in Cusco: Cusco In 2006 a consortium of P&O Dover and is the gateway to Machu Pichu and several of Uniport won the concession to build and Peru's other top tourist attractions. The current operate the South Pier of Callao Terminal port. Cusco airport can only take short haul flights P&O Dover, a holding company for Dubai Ports during daylight as it is surrounded by World, retains its headquarters in the United mountains and the suburbs of Cusco city. For Kingdom. many years there has been talk of a new airport (including a study by Currie and Brown The principal port in Peru is Callao, and its a few years ago) in Cusco but finally the upgrade is slowly taking shape. It is the ninth regional Govt and the Central Govt have port in Latin America and the Caribbean in decided that a new airport is a top priority. terms of container movement, and the largest They contracted a Spanish consultancy, on the Pacific coast of South America. Callao Advanced Logistics Group, ALG to carry out moved more than 1 million 20-foot containers technical studies which will help design the (TEUs) in 2009, and traffic during the first two project tender. months of this year was up nearly 30 percent compared to the same period last year. The The tender should be published Aug/Sep 2010 National Ports Company (ENAPU) anticipates and will include a long term DFBOT concession that growth will be around 15 percent for the to operate the new airport and also to operate year. the current airport for the 8-10 years they estimate it will take to complete technical New container-moving cranes were installed studies and build the airport from scratch. last year, and the pace of operations has UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru increased rapidly. Container movement has minimum investment of $50 million, while increased from twelve containers per hour Pucallpa, with a minimum investment of $14 before the cranes were installed to 26 per hour million, is scheduled for the fourth quarter. in early April. Ship-Loading Terminal for mineral The major change, however, came last May, concentrates in the Callao Port Terminal: when DP World inaugurated the new $500- A consortium known as Transportadora Callao, million southern terminal. This 650-meter dock including 2 mining companies have presented a has cranes capable of moving containers from project to design, finance, construct, operate Post-Panamax ships that carry as many as and maintain a mineral concentrates ship- 8,000 TEUs. loading terminal in the Port of Callao, Lima, under a 20 year concession. The Project DP World is also in a battle with authorities comprises the following important components: over its private initiative to modernize and - Construction of a dock to run parallel to the operate the northern terminal of Callao. north breakwater, between dock Nº 7 and dry Its $1.3-billion proposal has been awaiting a dock El Ancla of the Callao Port Terminal. - A decision by the Transportation and transfer tower located on the open access site Communication Ministry (MTC) for nearly two which will receive the mineral concentrates years. The MTC and ENAPU claim that DP from different storage deposits. - Installation of World cannot be awarded the project, because an airtight conveyor belt and its respective it would give the company a monopoly in structural support in sea and land to move the Callao. mineral concentrates between the open access point and the proposed dock. - A ship-loader - DP World?s proposal faces competition from Dredging of the manoeuvring area and the APM Terminals, a division of Danish berth location of the dock. Other companies, shipping giant Maersk, which has proposed either individually or in other consortia have an building and operating a multipurpose cargo opportunity to present alternative plans within terminal, as well as modernizing ENAPU?s the deadline of 90 working days after 29 April existing infrastructure at Callao. APM 2010. Estimated Investment required: US$ 120 Terminals? proposal would involve investments Million. of nearly $1.9 billion over the 30-year life of the northern terminal concession. Santa Sofia Puertos (SSP) is implementing the Ancon Terminal project in northern Lima and A third company, International Container is looking for a strategic partner. The project Terminal Services of the Philippines, has also involves the construction of a pier for presented a proposal for the northern terminal. containers and a ship-loading dock for bulk products. Estimated Investment required: US$ In March 2009 Terminales Portuarios 320 Million. Euroandinos (TPE) won the concession to run the Paita terminal port. They signed an agreement with the Peruvian government LAND TRANSPORTATION worth US$230 million. Stage one of the project Roads involves the construction of a pier and a Geographically, Peru is a country with container yard. A ship-to-shore crane will challenging and varied terrains. The Andes be put into operation and an divide the country from north to south into three environmental impact study will be distinct zones: the coast, the highlands and the conducted, among other projects. rain forest. According to the Ministry of Transport and Communications (MTC), Peru?s The remaining four sea port terminals road network comprises 79,800 km of (Salaverry, San Martin, Ilo and San Juan de roadways; however, less than 11,000 km of Marcona) and two of the river port these are paved. terminals (Pucallpa and Yurimaguas) operated by the government, are scheduled to be In August 2007 the final two sections of the awarded as concessions by the end of major $1.3-billion Interoceanic Highway project 2010. crossing southern Peru were awarded to a Peruvian consortium. When the project is Yurimaguas river port is scheduled to be completed in 2010, more than 2,600 km of offered in the third quarter, with a two-lane paved road will run from the coast of Peru to the border with Brazil. UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru The project main characteristics include the There are promis following: An existing 9.2 kms route and 7 built ing prospects for the passenger stations linking the districts of Villa construction of highways through concessions el Salvador and San Juan de Miraflores in 2010, such as section II of IIRSA Centro (Atocongo terminal), and 32 train cars. The (This road network is 870 km long and runs investment made in the existing section from the Ricardo Palma Bridge in Central Peru reaches US$ 320 million. The projected section to Pucallpa in the Amazon basin, linking Peru will stretch over 11.7 kms between Atocongo and Brazil) the stretch to be given in terminal and the Dos de Mayo Hospital station, concession next July is 370km long and the as well as 9 additional stations. estimated investment is US$160. Cajamarca-Bayovar Railway: this railway Costa-Sierra Programme consists of will be given in concession on second quarter granting a concession of 28 existing inland 2010. The project comprises the operation, roads that connect the production centres administration and maintenance of the railway located in the valleys with the trading centres infrastructure, upgrading and acquisition of located in 10 departments of the Peruvian rolling stock and the supervision of the train coast. Each road will be granted in concession. transport service (passengers and freight). Estimated investment: US$17 million. This stretch begins in Cajamarca (a mining area in the Northern highlands) and goes to Railways Bayovar, a northern Peruvian port in Piura. There are two regional railway networks: the Pre-investment studies, taking into account the Central railroad and the Southern railroad. In Norandino Railway, are been carried out by 1999 the government of Peru awarded the 30- National Mining Society using resources from year concession of the Central railroad and the the Cajamarca Solidarity Fund , and might Southern railroad to Ferrovías Central Andina conclude in the forthcoming months. A S.A and Ferrocarril Transandino S.A. subsequent evaluation and approval will be respectively. Ferrocarril Trasandino is 50 carried out by the Peruvian Ministry of percent owned by Orient Express Group. Transport. The Huancayo ? Huancavelica train project There are four other proposals for railroads comprises the operation, administration and pending in Congress. The most advanced maintenance of its infrastructure, upgrading would declare ?in the national interest? the and acquisition of rolling material and the construction of the Tacna-Tumbes Pacific supervision of the development of the service Railroad. This line, if built, would run along (passengers and cargo). the Pacific Coast, linking the country?s northern and southernmost regions. It has been Huancayo ? Huancavelica train has 128 km approved by the congressional Transportation length approximately that connects Huancayo Committee and should be debated by the full and Huancavelica and interconnects through legislature in April. standard section to the Central railway network, between Huancayo and Callao cities. The Government of Peru, aiming at catering for Estimated investment is US$3 million. the increasing demand for public use infrastructure has been promoting concessions Lima Mass Transport Electric System: In through Private Public Partnerships (PPP) the last decade, Lima has experienced such a aiming at ensuring, through a private operator, urban, economic and population growth that the supply of a certain public service or the use has resulted in a greater need for of public infrastructure respecting quality and transportation from one location to another. Bu coverage criteria. t this increase is not accompanied by an adequate supply of publ ic transportation. Large infrastructure projects for airports, ports This project was proposed as a way to correct and land trasportation have created a need for the imbalances within the public transport feasibility studies, trade and traffic forecasts, system. The project includes providing the financial analysis, environmental impact and technical facilities and investing in connected litigation support by international engineering infrastructure and services for the type of and management companies specialised in transport included in the tender. infrastructure projects. UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru Include this text as final paragraph: If you have any questions on the opportunities above, contact the UKTI contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. More on UKTI?s business opportunities service UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru Major events and activities UKTI contacts Find full details of all events in this Miguel Olivera country and sector on the UKTI website. Business Development Manager New export events are added daily to the site British Embassy Lima and you can register to be alerted to them on a Tel: (00511) 617 3033 daily, weekly or monthly basis Email: miguel.olivera@fco.gov.uk www.ukti.gov.uk UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Andrew Morris Medium Sized Enterprises (SME's) to attend Trade & Investment Director trade shows overseas. Find out more about British Embassy Lima UKTI support for attendance at overseas Tel: (00511) 617 3031 events Email: andrew.morris2@fco.gov.uk www.ukti.gov.uk UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Peruvian market are advised to you to meet contacts and promote your undertake as much market research and company in the Peruvian market planning as possible in the UK. UKTI?s team in Peru, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in the Peruvian market. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Peruvian market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Infrastructure opportunities in Peru
Posted: 05 October 2010