Colombia's river of dreams

Monday, August 10, 2015

A new US$1bn multimodal transport system in Colombia will link the country's main ports with its economic heartland by road, rail and a major barging operation along the Magdalena River, according to developer Impala Terminals Colombia.

A subsidiary of Dutch multinational Trafigura, Impala will use trucks to carry oil products to the custom-built Barrancabermeja river terminal, where cargo will be unloaded onto barges. The vessels will then travel north to the coastal port of Barranquilla for storage or barge-to-ship transfer operations. On return trips, they will import naphtha, steel and other cargo. Impala general manager Alejandro Costa told BNamericas the system, due to begin operating next year, will transform Colombia's international trade prospects and competitiveness.

BNamericas: Will the multimodal transport system be fully owned and operated by Impala/Trafigura?

Costa: Impala is responsible for integrating multimodal transport, complementing its investment in the country with existing strategic partners such as ocean and overland transport firms. We are investing more than US$1bn in this multimodal transport system. One of the project's main focuses is the Barrancabermeja terminal, whose construction began in November 2013 in an area of 50 hectares for its initial phase.

The terminal began operating mid-March, mobilizing liquid cargo, and will be fully completed by the end of the year. To serve this terminal, which will be crucial to reviving the navigability and trade along the Magdalena river, we have a modern fleet of tug boats and double hull barges.

BNamericas:  Have any agreements already been made with companies interested in using it?

Costa: About 70% of our current transport capacity is already committed to Trafigura. For the remaining 30%, which will be dedicated to dry cargo, we are in the process of structuring negotiations with national and international companies that have shown great interest in our offer.

BNamericas: Do you have figures for the system's expected transport capacity, especially for crude oil and gas?

Costa: Our logistics infrastructure will enable us to transport more than 30Mb a year. 

BNamericas: Where are the vessels being built, how much will they cost and when will they be ready?

Costa: Some 136 vessels [tugboats and barges] are being financed, with 124 already in Colombia. We expect to receive the other 12 in the coming months. The fleet that we are financing has a total cost of US$389mn and includes tugboats made in the Netherlands and United States, and barges built in Croatia and Argentina. All our barges comply with national and international standards for double-hull tankers using the highest operational and environmental standards to ensure the protection of the river and its ecosystems.

The banks of the Magdalena river near Mompox, Bolívar department (CREDIT: AFP).

BNamericas: How important is Odebrecht's Magdalena river waterway project to your multimodal system?

Costa: We think that the projects planned by the government to modernize the Magdalena river will have significant positive effects on domestic and international trade. Dredging works to be carried out by the [Odebrecht-led] Navelena consortium will increase the capacity of our fleet. When work on the river - which extends for 908km - is completed, the Magdalena will become a mega highway.

BNamericas: Are Impala Terminals and Trafigura concerned that the waterway project could be affected by Odebrecht's involvement in Brazil's 'Lava Jato' corruption scandal?

Costa: We have no comments that differ from those made by the Colombian government, which has said there is no need for concern about the contract.

BNamericas: Colombia has for years been constrained by a congested and limited road network. This has been exacerbated by security issues and landslides, which have often led to road closures. Has there been any estimate on how much time and money will be saved by the country's new investments in river transport?

Costa: There are many advantages in multimodal transport for a country like Colombia, given the issues that you have pointed out. For example, while a convoy of six barges can load 9,000 tons of dry cargo, about 280 trucks are needed to transport the same amount by land. As for liquid cargo, while a convoy of six barges carry about 60,000b of naphtha, 250 trucks would be needed to transport the same amount by road. That is why our multimodal proposal will complement the work done today by trucking companies, leading to far greater efficiency.

About Alejandro Costa

The general manager of Impala Terminals Colombia since 2012, Costa previously worked in senior management positions for multinationals such as Royal Dutch Shell in Puerto Rico, the United States and the United Kingdom. Costa has a degree in mechanical engineering from Pontificia Universidad Bolivariana de Medellín.

About the company

A subsidiary of Trafigura, Impala Terminals is a fully integrated multimodal logistics service provider. It owns and operates ports, port terminals and warehouses.

BNamericas will host its 5th LatAm Power Generation Summit in Lima, Peru, on August 19-20 and its 9th South America Infrastructure & Energy Summit in Bogotá, Colombia, on September 9-10. Click here to download the agendas.