- Category: Business
- Published on Friday, December 17 2010 05:55
- Written by Rod Hughes
- Hits: 969
Nowhere is the phrase "time is money" more apt than in water-borne shipping. Every hour in port waiting in the harbor for a turn at the loading dock is a serious loss in profits.
This is why the government is considering a private company's bid to build a giant, costly new dock at the Caribbean port of Limon to compete with the state-owned Moin dock. The decision on accepting the bid of the only contender, the Dutch-owned APM Terminals, is expected in January. APM promises to move 800,000 containers during its first year of operation.
APM, the second largest firm of its type in the world with concessions at 50 ports in 34 countries, promises to be able to move 1,000 containers in 13 hours with three cranes. The JAPDEVA port currently in operation moves the same number in 50 hours with one crane. (Another crane is currently out of operation.)
Moreover, APM proposes to have six cranes and three docking spaces in operation by 2015. As Minister of the Presidency Marco Varvas says, "We're looking at in investment of $950 million and a substantial improvement in the competitiveness for this country..."
The snail's pace of the JAPDEVA dock facility has long received failing marks from shipping companies from all over the world, along with the tendency of its longshoreman's union to go out on strike the moment it does not get everything it asks for.
An attempt to oust the union from its entrenched position during the Arias Administration resulted in bringing the wrath of the labor movement abroad down upon the country and a bloody nose for the government's image when the Constitutional Chamber (Sala IV) of the Supreme Court nullified the move.
The APM dock would be completely anchored to Limon Bay across from the petroleum refinery dock, surrounded by water and connected to land by a broad causeway. The new dock could service big freighters capable of accommodating 7,000 to 12,000 containers, contrasted with the current Limon dock that can only dock smaller Feeder-class ships of 1,000 container capacity.
But the plan already has the local Chamber of Exporters worried about the estimated service fee of $246 per container, as opposed to Japdeva's charge of $123. Chamber President Monica Araya told the newspaper La Nacion that the price differential might impact badly on micro- and small businesses engaged in export/import.
But the estimated APM charge would include such extras as loading/unloading, moving the container on the dock, rights to two days' storage and internal security. The smaller Limon dock charge includes no extras and containers must be moved immediately to rental storage facilities along the Limon highway, the extra cost absorbed by the importer/exporter.
While the benefits appear substantial and would solve one of the nation's worst bottlenecks to business, the price tag of $949 million is staggering to a small country, even though the proposed construction would the broken into three stages.
But taking into account that the construction of the San Jose-Caldera tollways took 30 years between the first and second stages (and then was not quite ready for prime time), perhaps one should not hold his breath to avoid asphyxiation...