Port Modernization Projects 2011

An Expert's View about Ports in Mexico

Posted on: 27 Dec 2011

SUMMARY

The Mexican transportation sector is facing one of the most important challenges in its history. The huge increase in Mexico’s foreign trade, as well as the increase in merchandise transiting through Mexican ports to the U.S. and Canada is generating demand for greater efficiency, cost savings and cargo security.

In July 2007 President Calderon announced a National Infrastructure Program describing the projects that will receive priority during his presidential term. The plan proposes USD 6 billion for the construction of five new ports (some are new terminals at current ports) and 22 port modernization projects. Although most of these projects were severely affected by the economic crisis, the gradual economic recovery is enabling the public and private sectors to continue with the development of some important transportation infrastructure projects.

This document includes information on upcoming infrastructure projects as well as port modernization projects that have already been announced.

THE MEXICAN PORT SYSTEM

Mexico has 16 commercial ports:

With the exception of Puerto Vallarta that focuses on cruise ships, all of these ports handle cargo, although some focus mainly on domestic intra-port movement. Public institutions called Integral Port Administrations (APIs) manage all these ports.

APIs are responsible for overseeing the use and commercialization of all the facilities and goods in the port precinct that belong to the federal government as well as services offered and fees charged by private port operators.. They also prepare the Port Master 5-year Plan, assuring that the ports are in compliance with Federal plans and regulations, APIs also are in charge of port operation efficiency and improvements, environmental compliance and community liaison issues. They are empowered to subcontract the operation of the terminals and related services to third parties.

Port activities and services are granted as concessions to private operators. Operators are responsible for building infrastructure, purchasing equipment and implementing the necessary processes to offer efficient services.

During the last decade, Mexican ports have gone through a modernizing process that has allowed them to significantly increase cargo movement. Although most of these projects were severely affected by the economic crisis, the gradual economic recovery is allowing the continued development of some important transportation infrastructure projects. The Federal Government has promoted port project development, as part of an effort to improve logistics efficiency and respond to demand generated by increased international trade.

The following is an overview of port projects that have already been publicly announced:

PORT OF ALTAMIRA

The Port Authority of Altamira and the private terminal operators are always looking to improve and modernize their facilities. Some of the projects being developed include:

- An annual dredging project to maintain port depth. In 2011 the port dredged an area of 16 hectares within the 2.12 kilometers of the access channel to ensure a depth of 13.4 meters.

- A 600 meters extension of the channel breakwater barrier

- Continuation of the Cactus-Reynosa gas ducts relocation

- Building and improving the internal port ways

- Expansion of the Vopak Terminal for petrochemicals handling

- Improving of the J.Ray MCDermott manufacturing platform

- Expansion of the Cooper T. Smith Terminal for mineral bulks

- DuPont will invest US$ 500 million to expand its titanium dioxide manufacturing plant. This project is expected to be finished by 2014

- POSCO is investing US$ 250 million to expand its facilities to manufacture galvanized steel for the automotive industry

Additionally, the API Altamira is in negotiations to develop a new rail barge (ferrobuque) route between Altamira and Mobile, Alabama for petrochemical products. This service is in high demand, as most of the manufacturing companies operating in the port import high volumes of unrefined petrochemicals for their manufacturing process.

In March 2012, API Altamira will issue a public tender for the operating concession of a newly built terminal. This terminal will be used for bulk minerals or general cargo.

PORT OF TAMPICO

The Port of Tampico has a plan to reactivate its port operations and cargo movement. As part of this plan, the port has recovered some facilities that were operated by the stevedoring union and were not used at full capacity. They are planning to open two more docks in its multiple purpose terminal and develop programs to increase the port’s competitiveness.

PORT OF TUXPAN

The Federal Secretariat of Communications and Transportation (SCT) is currently building a new highway that will connect the Port of Tuxpan to Mexico City. When this project is completed in the second or third quarter of 2012, the Port of Tuxpan will be the closest port to Mexico City.

The Port of Tuxpan is looking to expand its infrastructure capacity in order to accommodate the increased demand that will be generated with the opening of the highway. Projects being developed include:

- API Tuxpan is expanding the fiscal warehousing facilitiesxx - The second quarter of 2012, API Tuxpan will issue a public tender for the concession of a new dock for fertilizers

- PEMEX is finishing the evaluation of a project to build a new dock to move petrochemicals. The project is expected to begin the first quarter of 2012

- The company Graneles Internacionales will expand the bulk terminal facilities

- The company Termigas is building a gas handling facility. Operations are expected to begin early 2012

- Grupo TMM is building a private terminal to move containers and liquids. Estimated investment is US$ 500 million

- The U.S. company Stevedoring Services of America (SSA Marine) was awarded a concession to build and operate a public container terminal. The firm is waiting for the environmental impact approval to begin construction

- API Tuxpan is negotiating its port as a cruise ship destination with some of the major cruise ship companies for 2012

PORT OF VERACRUZ

The Port of Veracruz has started a major expansion project, to improve efficiency and productivity. The project has a 15-20 year timeline, will cost more than US $1.2 billion and was listed as a strategic project in the National Infrastructure Program announced by President Calderon in July 2007. The project includes the construction of new port facilities in the Vergara Bay just next to the current port location.

x In the last 2-3 years, the port of Veracruz has invested in expanding general cargo and container capacity, and increasing port efficiency, including new customs facilities, modern gamma ray inspection and detection equipment, security and surveillance systems, expanding berths, building a 13-kilometer bypass for the City of Veracruz, improving railroad access, improving intra-port transit roads and remodeling the administration building. At the same time, private operators have invested in modern equipment and IT systems for their facilities.

API Veracruz recently inaugurated a 295 hectare industrial and logistic park, 2.5 kilometers north of the port’s precinct. 155 hectares will be concessioned out to companies interested in building logistics centers for containers, agricultural and bulk minerals, general cargo, intermodal transfer, an automotive logistics, and related services. This facility had an estimated cost of US $600 million.
 

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Posted: 27 December 2011

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