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Chile Freight Transport Report Q1 2010Published by: Business Monitor International Published: Nov. 5, 2009 - 56 Pages Table of Contents
AbstractChile was planning to award US$4bn in public works projects through to 2011, the country's publicworks minister, Sergio Bitar, said in August. Following years of fiscal prudence, Chile has amassedsufficient public funds to support infrastructure investment in the current climate. Bitar announced a planfor infrastructure projects up to 2011 that foresees US$1bn of projects in 2009, the same in 2010, andUS$2bn in 2011. The projects will be in addition to those already planned for these years, and thereforecould bring the amount invested in infrastructure in 2010 to U$2.6bn, which will include the constructionof 1,000km of highways, according to Bitar, as quoted by EFE. A number of flagship infrastructureprojects in the country will be included in the plans. One example is the Intra-Oceanic Corridor that willcreate a trade corridor linking Brazil's Atlantic port of Santos with Chile's Pacific coast ports of Iquiqueand Arica. The project is expected to create 3,800km of paved roads, with 400km of this passing throughChile. According to EFE, Brazil has completed its section of the route, and Chile and Bolivia are close tofinishing theirs. The first phase of the project is due to be completed in 2010. Another high-priorityproject is the US$3bn freight rail tunnel through the Andes, at the Los Libertadores pass, which will linkChile and Argentina. Investment will also go into other projects, including the creation of a series of damsand a 2,000km road network. Prudent fiscal policy in recent years has enabled Chile to accumulate animpressive budget surplus, which for 2008 was 9.2% of GDP. Consequently, Chile has been able to drawon state coffers to ease the impact of the global economic slowdown on the country. Infrastructurespending has been a key element of this: in January's stimulus package, US$700mn was allocated forinfrastructure spending in 2009. However, employing reserves to prop up the country's economy willcause it to enter into a fiscal deficit of -3.4% of GDP in 2009, according to BMI estimates.Chile has been suffering from the impact of the world recession, but a reasonably strong recovery is nowin sight. According to our latest projections, after contracting by 1.1% in 2009, the Chilean economy isset to grow by 1.5% in 2010 and 3.2% in 2011. In terms of specific transport modes, we have made few major changes to our predictions this quarter. Wehave re-set our shipping forecasts to link them to future trade (which is more volatile than GDP). Thishelps capture what we see as the very sharp fall in shipping volumes in 2009. Rail freight is set to growby an annual average of 3.7% in the forecast period, with planned infrastructure investments boding wellfor the longer term. We are maintaining an earlier reduction in our pipeline throughput projection for thenext few years, in view of the continuing trans-Andean gas supply problems from neighbouringArgentina, and Chile’s commitment to reduce its dependence on natural gas piped overland from theregion in favour of greater use of liquefied natural gas (LNG) brought in by tankers from overseassuppliers. The net effect of these changes is that we now expect average annual growth in freight turnoveracross all modes, measured in million tonne-kilometres, to reach 257% in 2010-2014, faster than growthin the preceding five-year period (which averaged 4.4% per annum). According to our latest estimates, transport and communications GDP will have fallen by 0.3% in 2009,less steeply than GDP, which we see contracting by 1.1%. For the 2010-2014 forecast period we expectthe transport and communications sector to continue outpacing the economy as a whole. It will achieveaverage annual growth of 3.7%, versus 3.3% for overall GDP. The total value of transport andcommunications GDP will rise to US$21.2bn in nominal terms by 2014, representing 8.2% of Chile’sGDP. The transport and communications sector employed an estimated 529,900 people, or 8.6% of thelabour force in 2008. We see this rising to 568,800, and 8.7% of the total, by 2014. In terms of freight carried - and looking to the 2010-2014 five-year forecast period as a whole - BMI’sview is that Chile’s fundamentally healthy and export-oriented economy will return to a stable growthpath after the setbacks of this year, helping the freight sector with it. We project that freight carried willrise at an annual average of 5.7%, ahead of the economy as a whole (3.3%). Within that total, maritimefreight will lead (7.3% average annual growth), followed by airfreight (4.6% growth per annum), road(4.2%) and rail freight (3.7%). Get Full Details About This Report >> |
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