The Port of Guayaquil is Ecuador's economic lifeline and handles 70 percent of the national import-export cargo.

With a growing international volume of trade, principally due to China’s economic take-off, the port is modernizing its infrastructure and management to strengthen its leading position

N A BID to become one of South America’s top Pacific ports, especially in light of a rapidly growing Chinese market, the Port of Guayaquil is gearing up to increase its cargo capacity and boost its technological edge and overall competitiveness through privatization. Already with a significant presence in Latin America (it is currently ranked 11th largest port in the Latin America and Caribbean region), the Port of Guayaquil is Ecuador’s lifeline and the center of a great deal of the country’s economic activity. It handles 70 percent of Ecuador’s total import-export cargo and 93 percent of its in/out container traffic.

Still, the city of Guayaquil and its Port Authority believe that there is much more untapped potential in what is Ecuador’s largest and most important port. Measures are being taken to ensure that the Port of Guayaquil becomes the most efficient in the region and a continental leader in security, technology and trade facilitation.
Port of Guayaquil’s strategic location close the main north-south shipping routes make it a logistically smart choice for carriers in the U.S., South American and Far East trade lanes. The port offers year-round service and is open 24 hours a day. Its facilities include a container terminal with four 600-foot berths and nearly 3 million square feet of paved container area. A multipurpose terminal has five 600-foot berths and 900,000 square feet of warehouse space for general cargo, including 43,000 square feet for refrigerated cargo and 58,000 feet for dangerous cargo. Finally, the port boasts a bulk terminal, under concession since 1999, with one 500-foot marginal pier, three silos, two general warehouses, and a grain warehouse. The bulk terminal also has four tanks, one of which is for vegetable oil and three others that are suitable for heavy liquids such as molasses.

The Guayaquil Port Authority, which was founded in 1958 and has since been managing the port, is currently in the process of offering the container terminal and the multipurpose terminal up in a single concession. Now in its pre-qualifying stage, the landlord concession, which the Port Authority hopes to finalize before the end of the year, will grant the winning bidder the right to use and commercially exploit both terminals for a period of 20 years.

The terminals, along with the bulk terminal, currently handle more than 5.6 million tons of import-export cargo per year, representing $14 billion, and 435,000 TEUs (standard 20-foot equivalent units) of container traffic. Through the concession, the Port Authority, while retaining ownership of the port, will hand over the responsibility for port operations to the concessionaire, and will limit its role to that of a regulator. The successful concessionaire will be responsible for carrying out a $150 million investment in construction and maintenance of the terminals and for new equipment. This way, the Port Authority hopes to maximize the quality and capacity of the port’s services through a continued upgrading of its facilities and technology, boost its trade volume, and secure it a position among the top ten Latin American ports.
The Port of Guayaquil began its upgrading and restructuring when the national Law of Modernization was passed in 1995. Since then, the Port Authority has drastically reduced its staff from an original 3500 to just 100 employees. In 2003, the port began dredging its access canal as part of a $19 million project to enable the passing of vessels of up to 37 feet during high tides. The port has also been working to upgrade its international security ratings and to introduce compliance with the International Maritime Organization’s ISPS regulations, which it achieved in mid-2004. This certification entails specific security against smuggling, drug trafficking and terrorism. New security projects are now underway such as the creation of a warranty seal for port services, which is being developed in conjunction with a Spanish university and the Andean Development Corporation.

The port will soon be home to a new tax-free zone.

Other projects in the pipeline for the Port of Guayaquil include the expansion of its container facilities through the construction of a new container dock and an agreement with the city of Guayaquil to build and operate a passenger terminal in the boardwalk area of Malecón 2000. The new container dock, which the Port of Guayaquil will self-finance, will be located in Posorja, near the city of Guayaquil. The project will cost $80 million and is expected to be carried out over a four-year period. The new dock will provide facilities for ships with a deep draft. Port officials, including President of the Port Authority’s board of directors Luis Varas, are betting that it will enable the Port of Guayaquil to become one of South America’s main transfer ports, especially since regional competitors such as Panama are overloaded. The passenger terminal in the city’s main tourist area will feature a 600-foot mooring for cruise ships behind the Crystal Palace and close to the southern market area.

Finally, in line with Mayor Nebot’s push to develop Guayaquil’s business friendly environment, the Port of Guayaquil will also be home to one of the city’s new tax-free zones. The Guayas Free Zone area has been in the works since 2002 and will cover an area of nearly 900,000 acres within the port’s grounds, which the Port Authority has granted in a renewable 50-year contract to a consortium of private operators made up of the city’s industrial chambers. Private companies within the Guayas Free Zone will enjoy various economic incentives and be exempt from a range of local and national taxes and restrictions.

IN BRIEF

Exporting best sellers

The Port of Guayaquil exports Ecuador’s most emblematic products: bananas, cocoa and shrimp. Ecuador is the world’s largest exporter of bananas (about $1.2 billion in 2004) and a major exporter of shrimp ($319.3 million in 2004). The city of Guayaquil is ideally located as an export hub since 60 percent of the country’s exports are coastal goods and over two thirds of Ecuador’s food is produced in Guayas province, of which Guayaquil is the capital. Other Ecuadorian products in international demand include cocoa, oil, tuna, seafood, fruit, vegetables and cut flowers.

Twelve private ports

Guayaquil’s demand as a city-port is growing. In addition to the state-owned Port of Guayaquil, the city boasts 12 private ports that represent an estimated total investment of $100 million over the past few years. These ports now account for 35 percent of import-export cargo in the city and 25 percent of docked vessels. Some of the larger private ports include Banana Port, which is partially owned by Dole; Fertisa Port, where Chiquita and Sunway products are exported; and Triniport, used mainly for bulk imports. In addition to these, another private port will open this year in Santa Ana, where Mayor Nebot is planning a large commercial development complete with boardwalk, five-star hotel, and museums.

A top ten destination

Recognized by Latin Trade magazine as one of the best business destinations in Latin America, Guayaquil is the new home of a number of international companies. Brazilian company AmBev has introduced its Brahma beer with a recent $36 million investment in a beer plant, and employs more than 400 workers in the city. Investments have also been made in cellular telephony by international companies such as América Móvil, Telefónica of Spain, and new cell operator Telecsa-Alegro PCS is managed by Swedtel.