Chancay (Peru) | Financial Times
The town of Chancay was known as a quiet fishing village 80 km north of Lima and a weekend getaway for residents of the capital. But today the seaside region has become a huge construction site, with cranes moving columns and dump trucks rolling around around the clock.
The community is poised to host one of the largest deepsea ports in Latin America. Construction and operation will be carried out entirely by private companies which local authorities say could be a model for other infrastructure work in Peru.
The project is so large that it has the potential to transform maritime traffic along the Pacific coast of South America, shifting it away from Chile, Ecuador and Colombia. In the initial phase, the port is expected to handle 1 million containers and 6 million tons of cargo per year.
Cosco Shipping, a Chinese stateowned shipping and logistics company, owns 60% of the port, while the rest is in the hands of Volcan, a Peruvian mining company. According to Cosco, of the total construction cost of US$3.6 billion (R18 billion), US$1.3 billion (R6.5 billion) has already been invested in the initial phase.
“The intention of the port is to attract South American countries to Peru [para o comércio com a Ásia]“We are taking advantage of our strategic location,” says Gonzálo Ríos Polastri, deputy general manager of Cosco Shipping Ports Chancay Peru and a former admiral. “It will be an engine for the development of several industries.”
The port will occupy 280 hectares of land. The breakwaters alone required enough concrete to erect 20 10story buildings and will protect 1.5 kilometers of dock space, capable of accommodating some of the world’s largest cargo ships.
A 1.8 km long tunnel dug under Chancay, 900 m deep in places, will connect the pier with a logistics center and the PanAmerican Highway without disrupting traffic in the city.
Cargo could reach China from Peru in 10 days, instead of the current 45. And Brazil is also expected to benefit from the port, which will give the country’s exports faster access to Asian markets. Brazil and Peru are connected by the South Interoceanic Highway, which passes through the Brazilian agricultural centers of Acre and Rondônia.
“There is a whole part of Brazil that looks much more towards the Pacific than the Atlantic,” says Ríos Polastri. “Chancay has many advantages within Peru, and one of them is that it is the closest port to Brazil. This is another incentive for trade.”
The megaport’s inauguration is scheduled for late next year, when Chinese President Xi Jinping will attend the APEC (AsiaPacific Economic Cooperation) summit in Peru. Cosco reports that the port can still grow. “The plan is to have 15 docks, although there is no time forecast because we have to see how the port works in the first years,” says Ríos Polastri.
But despite the commercial benefits officials say the port will bring to Peru, some observers including U.S. officials have expressed concerns that it could increase Chinese influence over the country’s infrastructure.
Mario de las Casas, public affairs manager at Cosco Shipping Ports Chancay Peru, says local law prohibits the use of the port for military purposes without prior authorization from the executive branch or Congress. “Without this preapproval, any entry of this type would amount to an invasion, regardless of who owns the terminal,” he says.
Some residents also criticized the disruption caused by the construction, even though the city’s mayor, elected in January, openly supported the project. “I think this is a good indicator of the acceptance of the port by the local population,” says Ríos Polastri.
The Peruvian government says the port will boost the local economy and local investors are confident. Along the road to Chancay, posters advertise vacant properties for sale.
“There are six fishmeal factories in the area and a fleet of around 70 industrial fishing vessels, which represent the largest source of employment in Chancay,” says Raúl PérezReyes, Peru’s transport minister. “The project provides for the possibility of direct shipping abroad.”
PérezReyes adds that although the port will be operated by private companies, the government will monitor compliance with safety and environmental regulations. Police and customs offices will be set up on site.
“The government is broadly considering the development of ports at the national level, with the aim of providing road or rail connectivity as well as logistical infrastructure,” said the minister. “This type of investment allows ports to operate more efficiently.”
Congress is considering a bill that would allow cabotage moving cargo between Peruvian ports before it reaches the country to reduce traffic around the port.
According to Ríos Polastri, the Chancay project could pave the way for similar private infrastructure projects in Peru and facilitate progress by circumventing tensions between the public and private sectors. The country’s decentralized constitution requires that infrastructure projects in the province be awarded and managed by the local government.