Isaac Wingfield, head of ports and global transportation at AECOM, said expiring concessions across Latin America will force new operators into major capital spending within six years.
With a spate of Latin American concessions from the privatization of ports in the 1990s due to reach expiry within the next six years, billions of dollars of new investment will unlock when new or existing operators are confirmed for the next term, says Isaac Ray Wingfield, head of ports and global transportation at AECOM, told TOC Americas in Cartagena.
“Concession periods are getting ready to expire over the next 6 years, and I think it’s going to cause a tremendous amount of reinvestment,” Wingfield said.
He said operators nearing the end of their current terms have little incentive to spend heavily, producing what he called “somewhat of a chronic disinvestment” in parts of the Caribbean and North Latin America. “Sweating assets is probably not the right word, but more of just absolutely bare maintenance, just maintaining what you’ve got,” he said.
What the next cycle demands
Wingfield said the operators that win the next round of concessions will face a different calculation. “For those that then become cruise and win the next cycle of concessions, then it’s part of that concession is you really do need billions of dollars of investments,” he said. “Those assets, it could be new quay walls, it could be new cranes… and digitization, a whole lot of the technology.”
He pointed to Peru as an example of what that investment can look like. “We know there’s new ports in Peru that have gone online that have become automated or included a lot of digital technologies that are now ready for deployment in other locations,” he said.
But Wingfield cautioned that not every market is ready to follow. “The level of administrative maturity to be able to adopt some of those technologies is a bit more of a challenge, and some of those technologies are developed for much more robust applications,” he said. “It’s really trying to find the sweet spot for the solutions that exist in the industry to match what the country has.”
He added that some of the coming investment need has no precedent to build from. “In some cases, there’s whole new mineral assets that are coming on that need tens of millions of exports in tons per year that don’t exist right now,” he said.