It will propose to extend the contracts for another two years and if any terminal leaves, it will distribute the areas between the other two or take over directly
In the midst of the complicated social and economic situation that the country is going through in the framework of the fight against the coronavirus, the Government is looking for alternatives to sustain the concessions of the port of Buenos Aires.
Already last January, the new authorities canceled the process that the Mauricio Macri government had called, which aimed to deliver the activities of the Buenos Aires maritime terminal to a single international operator.
From the Ministry of Transport that guides Mario Meoni and the General Administration of Ports (AGP), a new scenario was then studied to prepare another tender document and to be able to call a tender before the end of the year.
That is to say, to completely put aside the initiative of the previous government of Cambiemos that was announced under the title “Modernization Plan of the Buenos Aires Port”, and that it was designed as one of the most ambitious works of former President Mauricio Macri due to the volume of planned investments of around US $ 1,800 millions and because, it was supposed, he was going to transcend his own management.
The initial objective was to have as soon as possible the new specifications aimed at the existence of two dealers and not three as at present, an idea far from Macri’s of a single operator. The authorities are clear that the port does not need another Terminal 6 given that bad experience.
But the arrival of the coronavirus pandemic and all the health and economic consequences that the fight against this virus left, forced the authorities to think of a transition strategy.
Now, the decision is to offer continuity for another two years to the terminals that currently operate since 1994 but whose contracts expire in mid-May.
The main one is Río de la Plata Terminals (TRP), which controls zones 1, 2 and 3 of New Port and is made up of Dubai Ports Word, the UAE’s state holding company, and the local group Roman. But they are also Maersk, in charge of Terminal 4, and Hutchinson Ports, from Terminal 5.
The pandemic complicates port operations
It will not be an easy task that awaits the authorities of the Ministry of Transport and the General Administration of Ports (AGP), taking into account two negative factors that today complicate the daily life of the area, such as the drop in international trade Y an internal dispute between the terminals TRP Y Maersk, linked to the delivery of containers during the next years.
The first obstacle is due to a drop of almost 30% in the volume of current operations of the port as a consequence of the recession dragged by the local economy and which has been deepened by the strong restrictions imposed in the supplier countries of Argentina and also by the local government to contain the spread of the coronavirus.
The port already came with lower operating volumes due to the local recession, but this scenario was further complicated by the closure of ports in China from the discovery of the coronavirus in that country, where it caused thousands of deaths and infections and forced the authorities to take extreme measures, including economic ones, to contain the pandemic.
It is that the Asian giant is the second largest trading partner of Argentina, second only to Brazil. In fact, last year Chinese products entered the country for just over $ 9.2 billion and were exported for $ 7.038 billion. Its influence is such that it represented in that period 10% of all local exports and was at the same time responsible for 19% of all Argentine purchases abroad, according to Indec data.
In fact, the experts consulted by iProfessional clarify that the current lower volumes reflect a fall due to the pandemic in the East. This increases the concern because an even worse scenario is predicted for the coming months and casts doubt on the current operating structure of the port of Buenos Aires due to the shrinking of the cake and the lower distribution of business among the three concessionaires.
In January, TRP moved 12,700 containers, which increased them in February to 13,500 and in March to 13,600. For this month, it projects a drop to 11,000 and 11,500 for May. In the case of Terminal 4 (Maersk), its volumes in the same months were 12,500; 10,000 and 11,000 for the first three months. For April it projects 9,500 and another 9,000 for May. And Terminal 5 (Hutchinson Ports), their data is 9,700; 9,500 and 10,000, while for this month it is estimated at 7,500 and another 8,000 during May.
Data that reflects the oscillations and the uncertainty with which the local port moves amid the global and local imbalances that the Covid-19 pandemic has generated, both in the health of the population and in the economies of the countries.
In Argentina, this is evidenced by the almost zero activity manifested by the economy, where 90% of activities are paralyzed and where the Government has had to announce a package of rescue measures that, in any case, seem to be insufficient.
In this context, the immediate future of the port business is also worrying. Those in the know anticipate that the drop due to the local effect will be reflected from June until at least September of this year. And, they say, it will be a drop of almost 50% of the operated volumes.
In any case, they estimate that from the spring, there will be a rearrangement of the stocks from a growth in imports, although they estimate that the situation of the year is complex and its closure depends on the local and international economic effects of the pandemic. .
Similarly, there is optimism in the sector. They know that the situation picture of the New Port is complex, but of favorable resolution despite the local and international context.
A conflict as a background scenario
An open end, they predict, to a hard year and with an international tender in between which also has as an additional problem the conflict between the partners of TRP and Maersk threatens to further deepen the crisis that the maritime loading and unloading business is already suffering .
The fight is old. It started in 2018 between the Maerks and Dubai Ports World groups, the main shareholders of two of the port’s three terminals. The first, a shareholder of Terminal 4, is also one of the largest clients of the other two Buenos Aires operators and a world leader in the business of operating port and ship terminals. In the case of the UAE state holding company, it is associated with the local company owned by Alfredo Román in TRP.
The dispute between the two stems from Maersk’s decision to withdraw the cargoes that it currently directs towards the TRP-controlled docks from May 15 to concentrate all its activities on Terminal 4.
A decision by the Danish conglomerate to concentrate ship shipments at its own terminal was anticipated in 2018 to TRP partners. It is not a minor fact, if one takes into account that what the operator where Alfredo Román participates receives represents 78% of the total of its operations.
In a recessive context like the current one, it would be a source of complications for TRP, which two years ago exerted pressure from the authorities to prevent Maersk from ending the contract. He even appeared before the Ministry of Labor to request the opening of a crisis prevention procedure with which he threatened to fire half of its almost 1,000 workers, paying 50% of the compensation.
He had also accused Maersk before the National Commission for the Defense of Competition (CNDC) through a document describing the existence of an alleged “dominant position and its abuse derived from a recent economic concentration that aims to restrict and distort competition in that market affecting the general interest. “
In this context, he managed to get help from the authorities and some unions and forced Maersk to continue sending the ships from Hamburg Sud coming from northern Europe and the east coast of Latin America to the terminals controlled by the Arab holding company. In exchange, he gave up firing personnel and presenting a crisis prevention procedure.
Now, Maersk intends to enforce the contract and as of May 15 it will stop sending the ships to TRP, which generated a new advance from its shareholders, such as Alfredo Román, who threatens to fire 800 workers and abandon the concessions along with its other partners.
The suspicion behind this advance has to do with the possibility that Dubai Ports wants to withdraw from Argentina, understanding that in the current context of crisis, the port of Buenos Aires has ceased to be a good business and, thus, transfer its operations to Chile, where they have just bought several terminals.
But despite these threats, Maersk will enforce the agreement and the ships will be redirected to Terminal 4. And to avoid future union conflict, the group also offered to take affected personnel to the ships to be canceled, which will be 200 workers. In this way, all employees who are part of the service that would pass to APM would retain their source of work since the company assures that they are in a position to guarantee it.
From the Government they follow the conflict closely, but they warn that it is a fight between two multinational groups, despite being a conflict that is generating much uncertainty in the workers of all the terminals.
However, in the sector they assure that this difficult cocktail has a solution, according to the position taken by officials and unions seeking to find a non-traumatic solution. It reassures them that the transport ministers, Mario Meoni, and of job, Claudio Moroni, are closely following what is happening in the sector.
“It is clear that, currently with the problem of the pandemic (COVID-19), the occupations are greater, but they have not ignored this issue that is so sensitive for the country’s foreign trade,” says a leading port businessman.
They also put chips on the management of the current General Manager of the AGP, José Beni, who follows the day to day of the problem. They say that, despite the fact that there is no designated auditor to replace Gonzalo Mórtola, has experience in conflictive situations such as Terminal 6 in the Government between the years 2003 to 2015.
“It is important that at this time the appointment is not an obstacle but quite the opposite, imagine a change of helm in the middle of the storm, it would only delay decision-making,” they advise in the port sector.
As for the extension of the contracts for another two more years, it will be the decision of each concessionaire if they accept or not. But in both options, the Government has taken a position on this matter, understanding that the conflict between Maersk and TRP is a commercial issue and that it does not depend on or correspond to an official definition.
Anyway, government sources clarified to iProfessional that the labor continuity of all TRP personnel is guaranteed and that, in the event that this group desists from continuing with its concession, a way will be sought for the preservation of labor sources and that the three terminals continue to operate. In this context, the alternatives are to distribute the three terminals that TRP operates, they can be distributed between the other two concessionaires or directly managed by the national State itself.
In the analyzes that the authorities evaluate, everyone has the idea that it will be with the accompaniment of the unions in the sector and the workers, with no loss of jobs, despite the current local and global situation.
For this, much work is being done, despite the quarantine, through video-conferences and meetings to evaluate the scenario that the port of Buenos Aires is going through.
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