Chile must speed up Bioceanic highway efforts, say experts

Chile’s renewed interest in the Bioceanic highway is good news, but to reap the full benefits of the corridor it will need to speed up efforts to improve roads, and northern ports need to be expanded to handle the increased trade, according to experts from the local infrastructure sector. 

The public works ministry (MOP) plans to invest 85 billion pesos (US$91 million) to improve 72km of the route 24 highway in Antofagasta region, which is part of the corridor intended to connect ports in southern Brazil and northern Chile.

However, the first works are not expected to begin until next year and one of the three sections to be upgraded is still undergoing studies, with construction only likely to start in 2028.

By contrast, Paraguay has finished one part of its section of the corridor and is working on another two.

“The effective integration of the Bioceanic highway requires the coordination of critical infrastructure such as highways, bridges and logistics systems. Though significant investments are needed to improve existing roads, speeding up studies will allow possible challenges to be identified,” Alvaro Peña, professor of construction engineering at Pontificia Universidad Católica de Valparaíso (PUCV), told BNamericas. 

When asked about the possible use of Chile's concessions system in these efforts, Peña, who is also board member of infrastructure think-tank CPI, said that is plausible and would boost efforts towards completing the highway, given the country's success in using this model over the last 30 years.

“Public-private partnerships, and concessions in particular, allow the inclusion of the private sector’s experience and efficiency, which is crucial for large-scale projects such as the Bioceanic highway,” he said.

The head of local concessionaires association Copsa, Leonardo Daneri, has a similar view.

“Without a doubt, the concessions model offers the possibility of updating and improving existing highways and roads in Chile, as well as the complementary infrastructure required to make associated processes, such as customs, international police and modal exchange stations more efficient,” Daneri told BNamericas.

THE PORT PROBLEM

While improving access to ports in northern Chile is a main goal of the Bioceanic highway, port infrastructure remains a weak link in Chile’s logistics system.

Unlike highways, airports or hospitals, where concessions are handled by the MOP's concessions office, Chile's ports operate under a system in which state-owned firms launch tenders for concessions to carry out operational and infrastructure works in a certain port, sometimes having different concessionaires for different terminals in a single port.

Expansion projects under this scheme have suffered setbacks in recent years. For example, in 2019, the second terminal at Valparaíso port was left without a concessionaire following a prolonged environmental assessment process for a US$500mn expansion. 

Other terminals also have capacity and efficiency deficiencies.

“There’s a fairly extensive consensus nowadays regarding the strengths and weaknesses of the system, which does have an adequate and efficient regulatory framework, but with a regulatory environment that slows down and makes investments more costly,” Daneri said.

He highlighted that efforts such as bills designed to reduce permitting times, which are being reviewed in congress, are key to help investments, but they should also target maritime territory and merchant marine department Directmar, claiming that the agency can take up to 10 years to approve permits and other authorizations.

Peña, meanwhile, said that expanding the capacity of northern ports will have a multiplier effect for the local economy and consolidate Chile’s position as a regional trade hub.

“This doesn’t just include physical expansion of ports, but also modernization of infrastructure, implementing advanced port management technologies and improvement of logistics and storage systems,” he said.