BY LARRY LUXNER
Journal of Commerce
LIMA, Peru -- Having generated more than $8 billion since 1991 from the
Peru's state-owned telecommunications firms, electric utilities, mines, fisheries and
banks, the government now plans to privatize all operations at the nation's major
ports by next year.
Jorge Gonzalez Izquierdo, Peru's minister of labor and president of state
agency Copri, says the process will begin by Dec. 15, with the concessioning of
operations at the southern ports of Ilo and Matarani. These two ports, which
together account for less than 3 percent of total sea traffic, see their future primarily
as a Pacific outlet to landlocked Bolivia.
``Since 1990, there has been growing participation of the private sector
terminals' complementing services, in preparation for their privatization,'' says a fact
sheet issued in mid-August by state-owned Empresa Nacional de Puertos SA,
known as Enapu.
``Today, activities such as pilotage, tugging and stevedoring are carried
out by Enapu
and by private-sector companies, which set their own prices. Nevertheless, Enapu's
prices are still determined by government regulation. Additionally, several companies
offer warehouse services outside of the terminals' area.''
First ports seen at $160M
Together, Ilo and Matarani are expected to generate $160 million in investment.
Other ports will later be included in the process, including Paita, Salaverry,
Chimbote, Callao and General San Martin -- which together account for 99 percent
of Peru's total cargo traffic.
``These two will be privatized by year's end,'' says Gustavo Caillaux,
of industry, commerce and tourism. ``These ports could be the main ports for Bolivia,
and we're going to finish the 80-kilometer (50-mile) road between Ilo and the
Peruvian-Bolivian border at Desaguaderos.'' Commodities expected from Bolivia
include soybeans, timber and minerals.
Peru is an increasingly important player in the trades serving the west
coast of South
America. U.S. containerized imports from the west coast of South America totaled
114,225 20-foot containers or their equivalent in the first half of 1998, according to
PIERS, the Port Import/Export Reporting Service of The Journal of Commerce.
That is almost on pace for last year's totals of 231,943 TEUs for all of
encouraging sign given this year's El Niño weather patterns that caused severe crop
losses in the region.
Disputing complaints of job losses, Caillaux said, ``The ports will move
now, so they'll end up with more employees than before.''
Better position now
Jaime Garcia, general manager of the American Chamber of Commerce of Peru,
says it is about time the government took the crucial step to privatize.
``We are in a better situation than five years ago, but compared with our
we still need to improve,'' he said. ``It's not enough to talk about the past, which is
what all the politicians do. They've been talking about this for seven years.''
Last year, according to Copri, Peru's seven ports handled a combined 13.9
metric tons of cargo, led by Callao (9.06 million tons), San Martin (1.46 million tons)
and Matarani (1.07 million tons).
In 1997, Callao handled 321,567 TEUs, or 86 percent of Peru's total, while
12,783 TEUs in 1997, has seen a 66.4 percent growth in containerized traffic during
the last five years.
Callao undoubtedly is the big prize -- and experts say it will need at
least $300 million
in port infrastructure investment. Principal commodities exported through Callao
include metals, minerals, fish meal, general cargo and containerized goods, while
leading imports are grains, petroleum, chemicals, fertilizers and containerized cargo.
Airports going private
Separately, the Peruvian government plans to begin transferring the operation
country's main airports to the private sector by year-end.
Corporacion Peruana de Aeropuertos y Aviacion Comerica (Corpac) oversees
airports and 28 aerodromes. With 1,600 workers -- 900 in Lima and 700 elsewhere
-- Corpac's main international airports are Aeropuerto Internacional Jorge Chavez in
Lima, Arequipa Chachani and Col. Francisco Secada International in Iquitos.
Corpac's total capacity is 7.5 million passengers, 200,000 flights and
tons of cargo a year. In 1997, the agency had income of $90 million, and handled
5.68 million passengers and 59,724 tons of cargo.
Planned investment at the Lima airport alone is $150 million to $200 million.
to be developed include main building improvement, aircraft fueling systems, freight
warehouses and runways. Jorge Chavez accounts for 97 percent of Peru's total
international passenger traffic, and 99 percent of its air cargo business.
Parsons Latin America has been selected as engineering consultants to prepare
basis for a 30-year concession. Total expected investment could reach $500 million.
Lima as the hub
``They really want to promote Lima as a passenger and cargo hub for South
America. It's ideally situated,'' says Kevin Tynes, vice president of Parsons Latin
America. In 1997, the airport accounted for 37,492 pounds of domestic cargo and
146,223 pounds of international cargo.
The private sector anxiously awaits airport privatization, said the Chamber
Commerce's Garcia, noting that exports of perishable products moving by air should
Most of the airlines providing scheduled passenger operations also carry
air cargo in
their lower deck, including American Airlines, Lan Chile, Ecuatoriana de Aviacion,
Aeromexico, KLM Royal Dutch Airlines, Alitalia and Lufthansa German Airlines.
But Arrow Air and Challenge Air Cargo provide regular all-cargo services
Lima and U.S. cities, and Martinair Holland provides similar cargo links to
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