Paracas doubles port investments with Terminal Investment Limited

The General Manager of Terminal Portuario Paracas (TPP), César Rojas, comments on the immediate impact of Terminal Investment Limited (TiL) becoming the new owner of the concessionaire. He also anticipates that an extension of the concession contract term is already being evaluated.

Photo: SEMANAeconómica

What investments does TiL foresee after purchasing TPP, in a deal exclusively reported by SEMANAeconómica (SE1989)?

I want to clarify that the port has not been sold, as has been stated elsewhere. The concession has been sold. The port still belongs to the State, and we remain regulated. The new shareholder will allow for accelerated investments that otherwise would not have happened now. We had planned an investment of around US$35 million for the next two years; today, that is increasing to US$70 million. The port has a lot of potential.

Were the previous shareholders looking to sell TPP?

The concession was bought, not sold. There was an invitation [from TiL] to sell. Also from other bidders. But the one that met expectations was TiL.

What will the US$70 million be allocated to?

At the beginning of the year, we bought one STS crane (ship-to-shore) and three RTC cranes (rubber-tyred gantry). In April, we added a second STS crane and two more RTC cranes. By August 2027, with all seven cranes operational, the Port of Paracas will have the same capacities as the Port of Callao. The cranes will double productivity.

How many TEU do you expect to move in 2027?

In 2025, we moved 90,000 TEU. This year will be a similar figure. We cannot handle more, even if we wanted to. In 2027, we can reach up to 120,000 TEU, with the cranes operational from August. And in 2028, we should be exceeding 150,000 TEU. There is demand.

What percentage of the investment commitment with the State will Terminal Portuario Paracas have executed by the end of 2027?

With the STS crane and two of the three RTC cranes we ordered in January, we have already fulfilled the mandatory investments for the entire concession over 12 years. However, by concession contract, we must fulfill complementary investments of US$80 million. These will be executed more or less by the end of 2027. We should start 2028 without any contractual investment commitment with the State.

What do these complementary investments consist of?

The pier is 700 meters long. The only way to handle more cargo is to increase productivity. To do this, we will bring 4 wheel loaders, 9 container trucks, 5 trucks for bulk cargo, and 1 conveyor belt for iron ore loading. We will increase the terminal's electricity points to 500 and develop a depot for empty containers. Additionally, we are building a second access to the port with technology. And we have been insisting with customs for the installation of a scanner to determine the contents of all refrigerated containers entering the port. We should have it by the end of the year.

Could the concession area be expanded?

Yes, there is an area next to the concession. It is approximately 350 linear meters of pier. Almost half of the current pier.

Can you do it without extending the concession term?

We could, but it requires an approximate investment of US$100 million. We cannot amortize that amount in the 17 years remaining on the concession, but we could in 47 years. And we would not only make that investment. There are many things to do, but obviously, we need the extension and environmental permits, which will surely be just as complicated as at the beginning. We hope the State will be a little more sensible regarding environmental licenses. We have been operating for 12 years without causing damage or environmental impact.

Will you request to extend the concession term by an additional 30 years?

Management has proposed it to the new shareholders. It is necessary to do so as soon as possible to deploy more investments and avoid creating a new Callao. The shareholders are evaluating it. The thing is, we are not the only ones. TiL operates more than 70 ports worldwide; they just bought one in Guayaquil and another in Mexico.

What will happen to investments made after 2028?

These are discretionary investments. The State may or may not recognize the purchases, but we can also lease. The official commitment with the State, based on which the concession contract was won, ends in December 2027 or January 2028. In 13 years of concession, we have been able to fulfill our obligations. We have been able to recover a business to the point of being attractive to a shareholder of TiL's caliber.

Has TiL's arrival brought changes to the port's management model?

We are a standalone port. We report to TiL, but it does not intervene in the operation. MSC [the shipping company and controlling shareholder of TiL] is just another client, like Maersk. We have an almost boutique management model that has yielded results. For us, the close relationship with our clients is extremely important.

Is it possible to maintain that boutique model when the port's cargo volume is practically going to double?

If the management philosophy is maintained, yes. On the one hand, it is important that our business partners feel that they are our priority. That they believe in and trust the port. And on the other hand, that our people grow. 90% of our workers are from Pisco and are super proud of their port. For us, the port is not concrete, it is not cranes or iron. The port is people. That is the big difference we have with other ports in the country.

@SemanaEconomica