JUAN RICARDO NOERO – AN EQUAL SHARE
Juan Ricardo Noero an equal share: – Huge infrastructure projects will benefit from collaboration between the public and private sector in the local construction industry.
Traditionally, Colombia has developed infrastructure projects under a concession regime, and public-private partnerships (PPPs) follow this model. The only difference is the way concessions are structured, for PPPs are based on European models and standards. In this regard, I believe that PPPs are contributing to the development of large infrastructure projects, as well as the establishment of joint ventures between Colombian and foreign companies. However, we are still a bit early, because the final model has not been shaped yet and the attractiveness of infrastructure projects will depend on the distribution of the operating risks in each PPP and the return on investment. These factors were resolved between the third and final quarter of the year. In 2010, we started to repatriate Colombian engineers and technical workers spread all over the world and subsequently re-launched operations in the country. Currently, the company is strongly focusing its activities on oil and gas, which is our traditional sector and is gathering pace in Colombia.
We are currently starting a project for Invías, with well-known Spanish company Sacyr as our joint venture partner. The government awarded 17 road construction projects at the beginning of 2012, and we were awarded one of the largest, which is a partial section of the road between Buenaventura and Buga. This road connects the largest port in the Pacific with the rest of the country through very well defined infrastructure. In mining, we are doing a lot of work with Cerrejón on the capacity expansion of its infrastructure to produce and export 40 million tons of coal per year. We do not want to overexpose ourselves, and know our size and limitations. However, some projects are getting too big for Colombian companies, which is another very important reason why we need partners that are adequate for the size of the project. The company’s revenue in 2011 was $100 million. We expected to close with around $150 million in 2012. We are not the largest company, but we are very well respected and well positioned.
A project that we are working on that will boost Colombia’s free trade is Canal de Varadero, which is a new access channel into Cartagena Bay. We are sponsoring this initiative in collaboration with the Sociedad Portuaria Regional de Cartagena (SPRC), which at a volume of 2.5 million TEUs annually, is Colombia’s second largest container terminal after the port of Buenaventura in the Pacific. We are funding 50% of this initiative in partnership with SPRC, with the balance of the investment being funded by the national government. This will allow entry to container vessels carrying up to 12,000 TEUs to pass through to Cartagena. The Canal de Varadero is another project that we have been fostering and working on for over two years, and we are close to securing all of the necessary environmental permits. We estimate that the project will require a total investment of approximately $60 million, funded 50-50 via a public-private partnership (PPP).
From my professional expertise, I think Colombia could do something similar to what Spain did many years ago; develop roadway corridors to facilitate road transportation between its different cities, as well as cleaning, sanitation, and water treatment projects. Colombia’s main advantage is that about 70% of its energy is hydroelectric, which would be key in developing logistical centers in ports, for instance. That would be the next step for the country. I believe that Colombia has a great potential for railway projects, and although they could be expensive due to Colombia’s geography, it would give a very important competitive advantage to the country. Also, I think there could be room to develop metro projects in cities like Bogotá, which currently lacks a metro or even a tram network. In this regard, we are holding talks with Vossloh AG, a German transport technology manufacturer, to come up with a project for Bogotá to implement a railway project that could be used, at the same time, for a metro or tram, and also for commuter or suburban trains