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Caribbean Ports Operate at Loss, Changes Necessary to Compete in Industry

Article Summary:

For the third consecutive year, the Caribbean ports in Costa Rica have operated at a financial loss. Coupled with the fact that the cost of freight to Costa Rica is the most expensive in the region. Changes to the system will need to be made if Costa Rica is to remain competitive in the industry.


Photo Credit: La Republica

Original Article Text From La Republica via Google Translate :

Ticos Need to Improve Management of its Ports

For the third consecutive year the Caribbean ports closed in the red.
The source of the problem is that wages paid by the institution to grow at a faster rate than revenues received for services provided in the terminals of Limon and Moin.

This situation forced Japdeva to postpone the necessary improvements and condemns users to continue paying the high costs generated by inefficient operations in spring.

To prevent wrecked docks are only two ways: Japdeva restructure to improve their income and modernize their operations, or cede the port functions to a specialized company.

In relation to the financial deficit, this year alone Japdeva spend $ 2.4 million more than they collect from the operation of the docks. A loss is the amount to $ 14.2 million the two previous periods. The fact that almost 75% of this year’s budget was used to pay payroll, is what prevents Japdeva make the necessary investments to streamline their operations.

Of the U.S. $ 63 million that was allocated to the ports this year, U.S. $ 46 million was absorbed by the wages they earn more than 1,400 dockworkers.

The bonuses paid to employees recognized by the last governments within the institution’s collective agreement is what causes the growth of wages.

While spending goes up every year, the income of the institution increased at a slower pace due to low load growth record, which this year will be in the order of 1% compared to 2010.

The shortage of resources experienced by the institution forced to delay the repair of the crane is left in the terminal and buy equipment Lemon to streamline their operations.

This situation affects the pockets of all citizens, since the additional costs paid by importers for port inefficiencies usually translate it to the final price of products sold in the country.

Currently the cost of freight to Costa Rica is the most expensive in the region since the shipping delays punish suffering in the country.
For example, the cost of a trip to the port of Limon is up to U.S. $ 600 more expensive than one to Puerto Cortes, Honduras, recognize the shipping.

Due to the financial burden they face, to Japdeva had only two ways to avoid shipwreck. The first is a restructuring of the way it has operated until now to make your income grow at a faster rate relative to what you eat.

This is achieved by increasing port charges, which are not updated for almost a decade. It would also be necessary to reduce the worksheet, either with pensions, freezing new hires or transfer of employees, so that the revenues do not increase further fattening the pay of workers.

The resources obtained from both measurements and the application of additional resources will serve to Japdeva to invest in the purchase of equipment that could improve the efficiency of the docks and help reduce operating costs to its users.

Introduce more equipment will allow the time Japdeva receive more resources, then paid extra money for the new services offered.
To implement this project will require a serious negotiation with the union Japdeva it must give the last word on some relevant issues such as labor.

Performance does not improve, the country will have no choice but to give the operation of ports to private capital.

In that sense we might consider making a concession to provide the current Moin dock a company engaged in the business of general cargo.
Another company could, in turn, revive the project of turning the port of Limon on a modern terminal specialized in attracting cruise ships and yachts, which offers all the facilities that are the destinations most advanced in this field on the continent.

Both projects would be complementary to the container terminal to be built in Moin, which will be developed by the Dutch group APM Terminals, with an investment of U.S. $ 1 billion.

This contract is already in the process of endorsement in the comptroller and to receive the green light to begin to construct mid-2013.

The purpose of this project is to build a terminal for 1.5 miles, equipped with 13 gantry cranes. With these dimensions can serve up to three simultaneous post panamax ships with capacity of up to 10 000 containers each.

Link to Original Article:

From La Republica

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