Political and regulatory uncertainty has added at least 10–15% to the cost of investing in Latin American port infrastructure, Paulo Ruy of Hanseatic Global Terminals told TOC Americas in Cartagena.
“It’s hard for me to give you a figure, but … we’re talking about at least 10, 15%,” Ruy said, referring to the premium now built into the business case for port projects in the region.
The scale of that increase varies sharply by country. “There are countries that I’ve seen shift by almost 50%, and that representing kind of 5 percentage points,” Ruy said, adding that the change feeds directly into the interest rate, or WACC, that operators use to judge a project’s return.
Ruy said the risk is sharpened by a wave of concessions in Chile, Peru and Colombia reaching the end of their first cycle, often without clarity over who will own assets such as cranes once a contract expires. “There’s no certainty of what you will do with that asset,” he said, adding that without it, operators cannot be sure of recovering their investment.
Consolidation between terminal operators and carriers is starting to offset some of that uncertainty, Ruy said. Hanseatic’s tie to Hapag-Lloyd gives it some visibility over committed volume when it invests in new capacity, he said, adding that “there is a small level of certainty that you get when you are talking to the shipping line…”
Santos and Mexico in limbo
Ruy pointed to Brazil, where the long-delayed TECON Santos 10 expansion remains unresolved as the country awaits elections. “Today Santos is already in a situation where it’s flooded … there’s no more capacity available,” he said.
In Mexico, Hanseatic is tracking options at Manzanillo and Laguna Cuyutlán, where, Ruy said, “there is a little bit more clear path, but we don’t know the timings yet.”
Sustainability costs still unresolved
Asked whether sustainability had slipped down the industry’s priorities, Ruy said efforts to pass green costs on to customers had failed. “No one wants to pay that bill,” he said, arguing that regulation, rather than goodwill, would have to drive change, pointing to shore-power rules in California as an example.
“I don’t say that it has to go 100% to the customer, but it should be shared throughout the supply,” Ruy said.