Interview: Colombia’s New Puerto Antioquia Ocean Port Will Lower Costs & Boost Competitiveness

A new seaport is under construction in Antioquia, Colombia that will increase Colombia’s maritime connectivity via the Caribbean Sea, Atlantic Ocean, and through nearby Panamá, Pacific destinations as well. Antioquia is best known for Colombia’s second largest city of Medellín, but many people don’t realize that the department also descends from the mountainous coffee region to the Gulf of Urabá on the Atlantic Ocean.

Colombia already has major ports in Buenaventura on the Pacific Ocean, and Atlantic ports in Cartagena, Barranquilla and Santa Marta; not to mention riparian ports along the navigable Magdalena River. This new port, along with major highway construction projects upgrading the road connectivity, is expected to increase the competitiveness and lower the transportation cost for the export and import of goods into Colombia.

Finance Colombia executive editor Loren Moss was able to speak with the project manager Andrés Bustos (above) to learn more about the historic project.

Finance Colombia: Tell us a little bit about yourself and your role within the project, what responsibilities do you have in the Puerto Antioquia project?

Andrés Bustos: I represent the firm PIO Puertos: Puertos Inversiones y Obras within the project, we manage the project.

Finance Colombia: Why did they conceive of making another port in the Atlantic coast, connecting it to Antioquia? We have ports in Cartagena, we have ports in Barranquilla and in the Magdalena River. Why did they decide to build another port, this time in the UrabáGulf, connected with the Department of Antioquia?

Andrés Bustos: The answer, really Loren, is very simple. We decided to get into it, and work on this project, basically because it makes sense, because it’s socially viable, and economically viable. Urabá has a strategic location in the country compared to the other ports in the Atlantic coast, it’s 350km closer to 70%-75% of Colombia’s GDP, which means in the future, the logistical savings and the improvement in competitiveness make this a well-conceived project. On the other hand, Urabá by itself has a commercial and productive dynamic which is interesting enough for the existing base that allows this project to have a very important cargo volume assured. Third and not least, the institutional framework and the need to carry out this project for the regional social development of the community in Urabá. That was what motivated us, basically.

Finance Colombia: You just made a deal with Global Infrastructure Partners and received an additional $110 million USD project funding. How is the construction going and what stage of construction are you in? When do you expect to have the project done and open for cargo? And tell me about the usage of this funding and its importance.

Andrés Bustos: The importance of the deal with Global Infrastructure Partners in the project is that this is one of the largest infrastructure funds in the world, and they are demonstrating their belief in Colombia, which has honored us already with the trust they place in us by approving these resources and this credit, as you’re saying. $110 million USD gives a very important boost to the development of the project. We can tell you that the works contract is signed with COTEMA Consortium, represented by Eiffage and Termotécnica Coindustrial, and that leads us to the final stage for construction to begin. The target date is something that we are not necessarily communicating openly, so we prefer to keep going until we have all the details done and not commit to a specific deadline yet, but we certainly are in the final stages.

Finance Colombia: How has the progress of the construction been affected by the COVID pandemic we are facing? Has this pandemic affected the progress of the project?

Andrés Bustos: No doubt the COVID-19 issue changes our schedules and demands additional plans and changes we didn’t have in mind. We’ve faced it with efficiency. The premise has been to take care of the workforce, of the people, not only the project team but the business partners, of the builders, and the contractors. We have developed a series of contingency plans so by the time they start work, all the necessary precautionary measures are taken. Of course assuming that there is such turbulence in the economy, the indicators are suffering considerable damage, but the project as such in its financing is not being affected at the moment. We hope, we expect that this situation improves soon so that the contractors can move and complete the work.

Finance Colombia: Exactly, and I imagine it is very important. I imagine it is key as the progress they are making in Ruta al Mar, because that would be like a main road to connect Urabá with Medellin and with the rest of the country, right? I think it’s going very well, the construction of the road from here, from Medellin, to there in Urabá.

Andrés Bustos: Yes, Ruta al Mar 1, Ruta al Mar 2 and the Toyo Bypass; those three works are advancing very well, we have high optimism in those works, and also Pacific 1, Pacific 2 and Pacific 3 because they will allow us to connect not only Antioquia but also the Eje Cafetero (coffee region) and the center of the country with Urabá, so we see that those works are advancing and of course, that is positive for us.

Yesterday, for example, they announced what they call El Cale, the union of the two ends in the second western tunnel, which is the one that will allow the completion of the four-lane highway between Medellin and Santa Fe de Antioquia, that’s very important.

Finance Colombia: I imagine that with all of that, the port will change the import and export traffic of Colombia, because until now, Medellin and the Eje Cafetero don’t have connectivity to the sea. They have to go through Buenaventura or to Cartagena or Barranquilla, I don’t know what the traffic flow is, but throughout that important region of the country, Medellin, Eje Cafetero, we talk about Pereira, we talk about Manizales, we talk about everything. We are talking about all of the industry that we have is already growing in export of cattle. Colombia just signed a free trade agreement with Israel. For fruit it has always been about bananas and plantains, but now avocados, and I imagine that this port is going to change the traffic flow, so I wonder, what would be the effect for Medellin and the southern departments of Antioquia, who until now haven’t had direct access to the sea, I imagine the impact will be big.

Andrés Bustos: Yes, that is what we have seen, that is what the financiers have seen as well, and definitively Puerto Antioquia is a project that we have already categorized, and the banks have as well, as having a high impact for development, and that has several meanings. First, it effectively contributes to competitiveness of the country, both the producers and the exporters, that is to say, to reduce the distance by 350km because that makes both import and export products more competitive and that will have a positive impact to the final consumer in the costs and prices. It has a direct impact on the competitiveness of the country, and the second reason, no less important, is the very high impact for the development of the Urabá region in terms of employment, but not only quantity of employment but the quality of it and the establishment of new companies, and the final goal is economic development and progress. It’s a big social responsibility we have.

Finance Colombia: I’m glad to hear that because I remember my first time in Buenaventura, which was around 15 years ago, 2004, or 2005, and a very sad thing I saw is that there was a lot of traffic in the port, but it wasn’t contributing to Buenaventura. The wealth went to Cali and the rest of the country, but Buenaventura stayed underdeveloped. You have a role to play, a commitment to improve and develop the Gulf of Urabá because I don’t know very well, but I know the region a little and I’ve seen a lot of potential but little attention. And I’m glad to hear that this project has a great role to develop the Gulf, the region, Apartadó, Turbó, those areas where you are and provide employment to the people in the north of Antioquia.

That would be very important, and I hope that not only you but this project and the development we are experiencing is going to make some positive changes. I hope you keep us posted and I’d like to know about the progress.

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