Excessive paperwork is delaying investments in the country's ports, while authorities blame each other for the problems.
Planned investments in the ports of Limón, Puntarenas and Caldera have been slowed by excessive paperwork and the lack of accountability of the authorities, who blame each other for the delays.
2 years ago the port of Moin halted a million dollar purchase of equipment.
Among the causes identified are high operating costs and poor terminal infrastructure for tourists.
For the cruise season which begins on October 16 and ends on May 30, 2014 only 60 boats are expected to arrive at the port. Data provided by the Costa Rican Tourism Institute (ICT), reveals that while in the 2008-09 season 127 cruise ships arrived, in the 2011-12 season only 71 came.
Administrators of Costa Rica's Caribbean ports have announced less vessel traffic, increased cargo movement and closing 2012 without profits but also without any losses.
According to an article in Nacion.com 2011 up to September Japdeva attended to 1792 merchant ships, unlike in 2012, which reported a decline of 8.25%, with a total of 1,644 ships served.
Two separate packages of $30 and $40 million will allow for the modernization of outdated equipment and facilities at Costa Rica’s main port.
Elfinancierocr.com reports that the $30 million package "is intended for the purchase of a Portal Crane, two tugs, container stackers (reach stalkers) and a pilot ship. The equipment will be acquired through a tender process with funding that Japdeva has already advanced.
Lack of adequate infrastructure does not allow the demand for sea cargo to be met, increasing associated costs.
The chief executive of the Costa Rican Institute for Pacific Ports (INCOP in Spanish) notes that while in the port of Caldera container movements increased by 17% in 2011 compared to 2010, delay going back years in the construction of a bulk loading pier is an obstacle to being able to satisfy cargo requirements in terms of time and fees.
With the uncertainty created over the strike at the ports of Limon and Moin, exporters are starting to think about sending out their products via Panama or Caldera on the Pacific.
In light of the shutdown of the ports where 80% of national exports exit the country, the export sector is analyzing alternatives.
Abel Chavez, president of the National Chamber of Producers and Exporters of Pineapples (Canapep) noted that among the possibilities being studied are transporting products via the port of Caldera, Costa Rica's Pacific port or via Panamanian ones. These options represent a major increase in costs for the sector.
The Workers Union comprising of Japdeva, Portuarios and Afines has gone on strike because of opposition to the construction of a private container terminal.
Staff members of the Union of Japdeva Port Associations (Sintrajap) are protesting against the concession to the Dutch firm APM Terminals to build a container terminal in Moin, an investment project costing $22 million approved by the Controller General of the Republic.
The financial crisis affecting Japdeva is threatening the operation of the ports.
A deficit of over $8 million weighing on the Board of Port Administration and Economic Development of the Atlantic (Japdeva), the administrator of the country's main ports, has the institution on the brink of crisis.
Lack of resources is impeding improvements to make the port more competitive, due to the fact that there are urgent investments that need to be made in order to continue operating.
Despite the delays, modernization initiatives are emerging as potential positive signals for the Costa Rican ports.
The ports of Moin and Limon, two gateways of international trade into the country, are lagging behind compared to other ports in the region and Latin America.
So far, attempts to modernize the ports, such as the recent concession to APM Terminals, have faced many obstacles, introduced mostly by the workers union of the Board of Port Administration and Economic Development of the Atlantic Slope (Japdeva).
The government of Costa Rica has put on hold "indefinitely" the process for the concession of the ports of Limon and Moin.
Caught between the demands of port efficiency by the productive sectors and the real power of the union, the Chinchilla administration has back tracked on its intention to grant concessions to private companies for the modernization and operation of the ports of Limon and Moin, and now intends to invest about $70 million to make sure that this essential modernization takes place, while keeping both terminals under the management of the Port Management Board of the Atlantic (JAPDEVA).
In what seems a never ending story, the government of Costa Rica has opened the possibility for new dialogue with unions from the ports of Limon and Moin.
The Costa Rican government announced that in discussions with port unions (SINTRAJAP) a two month timeframe to reach an agreement was set.
Japdeva opposes giving in concession the privatization, modernization and operation of the ports of Moin and Limon.
Tariffs in force since 2003 and salaries that absorb 80% of the budget have led to losses during 2010.
As of July 2010, losses had already reached $4 million.
Allan Hidalgo, president of Costa Rica's Atlantic Port Development Management Board (JAPDEVA in Spanish), believes that the problem lies in the way prices are calculated.
"In addition, these tariffs have not changed since 2003 with JAPDEVA and successive governments awaiting the pier concessions in order to increase revenue," reports Nacion.com.
Company Royal Haskonig conducted a study which calculated the actual cost of building and operating the new port on the Costa Rican Caribbean coast.
Back in 2004, authorities had set a reference price of $812 million. Haskonig’s figure is 17% higher.
Allan Hidalgo, executive president of Japdeva, the port authority for Limón, told BNAmericas that the study also “raised the expected return on investment from 15% to 17%, and calculated the cost of handling one container at $252, up from $169. These variations make for a more attractive project”.
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