Peru Evaluates Port Modernization to Boost Infrastructure and Economic Growth

The Peruvian government is considering the construction or modernization of multiple ports in southern Peru to enhance national infrastructure and economic growth. The development of these ports, especially the port of Chancay, is expected to significantly impact the country's logistical capabilities and the agricultural sector.

Mario de las Casas, institutional manager of Cosco Shipping, emphasized that the port of Chancay will not compete with the port of Callao. Instead, Chancay is designed to be a hub port and a direct gateway to Asian countries. This strategic positioning will reduce the travel time for Peruvian products to reach Asian markets by at least 10 days.

The development of ports in southern Peru has significant implications for the country's economic growth and global competitiveness. This infrastructure project could lead to increased trade with Asian markets, job creation, and a boost to the agricultural sector, contributing to Peru's long-term economic prosperity.

Currently, Peruvian products destined for Asia are shipped from Callao to North America before heading to their final destination. This indirect route adds significant time and cost to the supply chain. The port of Chancay will streamline this process, allowing for more efficient trade with Asian markets, particularly China, which has a middle class of 400 million people with substantial purchasing power.

The construction of railways is another critical component of this infrastructure plan. De las Casas highlighted the importance of rail transport to capitalize on Brazil's grain cargo, which is considered the 'grain store of the world.' He stated, 'If it is not by rail, it is unfeasible. We cannot handle it with trucks.'

The port of Chancay is also expected to play a vital role in the expansion of Peru's agricultural frontier. With the execution of irrigation megaprojects, the agricultural area is projected to grow from 220,000 hectares to nearly 500,000 hectares over the next ten years. This expansion will boost the production and export of agricultural products, further enhancing Peru's economic prospects.

In addition to agricultural benefits, the development of the multipurpose terminal at Chancay will reactivate nine mining projects and the Andahuaylas – Marcona railway. This infrastructure development is anticipated to trigger the parallel execution of new projects, including industries and connectivity infrastructure, potentially leading to significant job creation.

De las Casas commented on the broader economic impact, stating, 'The port of Chancay is triggering the parallel execution of new projects. The accumulation of all these could cause Peru to go through a golden age, especially in job creation.'

The modernization of ports in southern Peru represents a strategic move to bolster the country's infrastructure and economic growth. By enhancing logistical capabilities and expanding the agricultural frontier, Peru aims to position itself more competitively in the global market, particularly with Asian economies.

Key Takeaways

• Peru to develop multiple ports in southern region to boost infrastructure and economy.
• Port of Chancay to be a hub port, reducing travel time to Asian markets by 10+ days.
• New port to streamline trade with Asia, particularly China, and boost agricultural sector.
• Railway construction critical to capitalize on Brazil's grain cargo and expand agricultural frontier.
• Port development expected to create jobs, reactivate mining projects, and trigger new infrastructure initiatives.