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Colombia: Colpuertos eliminated; private enterprise invited to control harbor.

Colombia: Colpuertos eliminated; private enterprise invited to control harbor

The Colombian authorities, in line with their drive to boost exports of coffee and other products, are to "liquidate" the notoriously inefficient state corporation, Colpuertos. It will be replaced by regional harbor administrations, which will operate strictly commercial lines.

The decision to do away with Colpuertos, which will be phased out over three years, has been welcomed by coffee exporters and shippers generally. For years they have been complaining that Colpuertos - like so many Colombian government bodies - is an overstaffed and antiquated institution.

Similar complaints have long been levelled at the even more incompetent state railroad system, which virtually ground to a standstill before the authorities recently decided to dismantle it. Now the government of President Cesar Gaviria is to act likewise in the case of the ports, and this should come as reassuring news to importers of Colombian Milds.

In recent years, they have been justifiably afraid that Colombia's creaking harbor infrastructure could prove to be incapable of standing up to the pressure posed by the ever-increasing volume of exports - and in particular coffee shipments. Admittedly, somehow the country's ports have in fact risen to the challenge, and they have been able to handle the rapid rise in Milds consignments that has followed the collapse of the ICA coffee accord.

Long-term, nevertheless, the authorities could not risk prolonging a situation in which the nation's export-promotion plans were perilously dependent on an institution as outmoded as Colpuertos. So the draconian decision was taken. Rather than try to revamp Colpuertos, as previous governments had done, the Gaviria administration simply decided to axe out the body and start again, with new and modern port entities.

In adopting this decision, President Gaviria, a young economist, was influenced by several considerations. It was not just a question of Colpuertos's high costs, low productivity, fumbling bureaucrats, and belligerant trade unionists.

The present government plans to modernize and expand the nation's entire transportation network. But to do so, it first requires development credit from multilateral institutions such as the World Bank. But the latter has been understandably reluctant to open credit lines for perennial money-losers, such as Colpuertos, which it could be excused for writing off as a lost cause.

Now, though, with new and far more efficient corporations preparing to take over the harbors, the World Bank will presumably regard Colombia's

transportation loan requests in a more sympathetic light.

Another factor that explains President Gaviria's decision to eliminate Colpuertos in his personal bias in favor of the private sector. A Thatcherite in approach, he has scant patience for state institutions, like Colpuertos, that fail to deliver. His instinct is to reduce the government's role in the economic sphere to the essential minimum.

His neo-liberal outlook is evident in the program he is now implementing to rescue the crumbling state rail network, which is henceforward to be run as a mixed-capital undertaking. Though a government corporation will be responsible for track maintenance and the like, private enterprise will run the key commercial side of operations.

The hope is that, with the private sector participating, the railways will begin to turn a profit and will once again be able to compete with road transport - a matter of more than passing interest for coffee shippers. At present, given the near-ruinous state of the railways, only a relatively small proportion of coffee exports are transported by train. The bulk of Milds consignments are trucked by road to the Pacific-coast port of Buenaventura and, at peak periods, this can lead to serious congestion.

The pressure, however, would be relieved if more coffee could be diverted to rail transport. In addition, modernization of the rail route linking Bogota with the Caribbean port of Santa Marta would enable a significant proportion of highland Milds consignments to be shipped out via the north coast, rather than the hard-pressed pacific outlet of Buenaventura.

But distributing the export burden more evenly between the country's different ports will be of little avail if the harbors remain as inefficient as they are today. So now, to avert the risk of port bottlenecks, harbor operations are to be entrusted to regional private enterprises that will substitute the plodding Colpuertos administration.

The private sector will be given the chance to run ports directly or in association with local government bodies, and efficiency should surge as a consequence. Unlike at present, the habors will have to function profitably and, to this end, cargo-handling equipment is expected to be modernized. Also, hundreds of port workers will be laid off, while labor regulators are likely to be modified to ensure greater productivity and lower costs.

Over the long haul, the results should be beneficial. But short-term there could be temporary disruption in the ports if longshoremen carry out their threat to strike in protest at the liquidation of Colpuertos. Port employees want to preserve their current privileges, though, somewhat belatedly, they are starting to acknowledge there is room for improvement.

Government officials are optimistic that labor unrest can be avoided. They are now preparing measures to reallocate redundant port workers to other jobs.

Meanwhile, the ports aside, the export of Milds consignments continues to flow smoothly, despite an ongoing wave of raids by communist-led guerrillas in Colombia's rural zones. The rebels launched their offensive in retaliation for the army's capture in December of their main base. But up to now, coffee-growing zones have not been targeted by the guerrillas.

This situation, though, could change if the rebel offensive were to be extended to coffee districts. An indication of the havoc the guerrillas could cause: In January, they hacked down 13,000 pine trees in a foreign-owned plantation in western Colombia.

In any event, of more immediate concern to planters is the spread of coffee rust disease and "broca" - a pest that destroys Milds berries. Most farms are today infested with rust and, in time, this could reduce production unless adequate fumigation programs are maintained.

The other problem, broca, could present a graver threat because of the present difficulties in controlling the pest, which has now spread to seven provinces. But agronomists hope to counter the menace by developing a fungus that destroys broca. African wasps that feed on the pest are being released in what amounts to biological war.

Only time will tell if these measures will meet with success. If not, the combination of broca, rust and depressed prices could stymie plans to augment Colombian Milds output. Nobody forecasts a rapid revival of either the ICA accord or prices. Hence the feeling is that, for the foreseeable future, the country is not too well placed to hike production substantially.

But, the supply situation could be worse. According to the Growers' Federation, the country had stockpiles of around 6 million bags at the close of 1990. Last year, the nation exported nearly 13.9 million bags, valued at $1,410 million - an increase of $50 million in relation to 1989.
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Title Annotation:Colpuertos state corporation for harbor administration
Author:Nares, Peter
Publication:Tea & Coffee Trade Journal
Date:Mar 1, 1991
Previous Article:Group studies Caribbean-Pacific link as one alternative to Panama Canal.
Next Article:Coffee industry begins shift to beans in bulk.

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