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Peru Freight Transport Report Q1 2010Published by: Business Monitor International Published: Nov. 10, 2009 - 64 Pages Table of Contents
AbstractThe Peruvian government was planning to execute two major transport infrastructure projects in thecountry, estimated to cost US$6.5bn in total, according to reports in early September. The news came asquestions were emerging over how effectively government stimulus funds were filtering through toprojects. The two projects had been approved by the cabinet, according to Peru's minister of transport andcommunications, Enrique Cornejo, as cited by América Economía, and were awaiting congressionalapproval. The first project is in the roads sector, and envisages creating a road network in the Callao andLima regions in the west of the country. It is estimated that the project will cost US$5bn, with theopportunity for it to be executed as a public private partnership. Developing a road network in the regionsis planned to encourage investment into the area and improve competitiveness, productivity and safety.The second project is the NorAndino railway project. This is estimated to cost US$1.5bn and will link therich mining region of Cajamarca with Lambayeque and Piura, where the port of Bayovar is located, thusreducing transit costs and times for mining companies operating in the region. Peru's currentinfrastructure is presenting an obstacle to the country's competitiveness. Peru is rich in minerals, but poortransport infrastructure is hindering efficiency and increasing the cost of transport for mining companies. The planned rail project in particular will help to alleviate this problem. According to the WorldEconomic Forum's Global Competitiveness Report for 2008-2009, Peru's infrastructure ranks 113th out of134 countries assessed. Although roads and rail place slightly higher, 99th and 90th respectively, they stillpresent a competitive disadvantage to the country. The news of the government's plans came as Reutersreported that little evidence of the country's economic stimulus had been seen. In December 2008President Alan Garcia announced plans to invest US$13.2bn into the economy through the construction ofsocial and transport infrastructure, as well as other projects. However, it appears that little of this hasactually materialised, with Reuters noting that less than 1% of what was allocated for the first half of2009 has been spent. We have eased back our short-term forecasts for Peruvian GDP growth but remain positive for themedium-term outlook. BMI now puts Peruvian GDP expansion in 2009 at 2.0% (was 3.2%), withstronger improvement next year to 4.4% growth (was 3.8%). Peruvian GDP will grow by an annualaverage of 4.6% in 2010-2014, weaker than the 7.0% average over the preceding five-year period of2005-2009, but still healthy. We have broadly maintained earlier adjustments to freight-carried-to-GDPratios across different modes of transport. However, we have re-set our forecast for maritime freight,linking it to trade volumes (rather than GDP as previously) and noting that the global shipping slowdownwill be offsetting new investments going into Callao and other Pacific ports. Pipeline throughputprojections have been lifted towards the tail-end of our forecast period as we are expecting the finalphases of the Camisea gas project to have a positive effect. Camisea should also support maritime freight,with LNG exports to the western seaboard of North America picking up. Consequently we expect freightcarried across all modes, measured in millions of tonnes per km (mntkm), to rise by an annual average of6.9% across the forecast period, 2.3pps faster than the economy as a whole. According to our latest estimates, transport and communications GDP will have risen by 2.2% in 2009,ahead of the 2.0% gain for the economy as a whole. For the 2010-2014 forecast period, we expect thetransport and communications sector to continue outpacing the economy as a whole by a small margin. Itwill achieve average annual growth of 4.7%, versus 4.6% for overall GDP. The total value of transportand communications GDP will rise to US$2.76bn in nominal terms by 2014, representing 8.6% of Peru’sGDP. The transport and communications sector employed an estimated 742,500 people, or 8.5% of thelabour force, in 2009. We see those figures rising to 814,900 and 8.5% by 2014. In terms of freight carried, measured in mntkm, no accurate statistics have been collected for the roadhaulagesector. However, based on BMI estimates, we expect that growth in road haulage will be aheadof the rate of expansion of the economy as a whole at 5.7% a year during 2010-2014. As in mostdeveloping economies, Peruvian freight-demand tends to run ahead of overall GDP. This is offset,however, by the limitations of the national highway network, which act as a constraint. It should be notedthat the completion of the inter-oceanic highway between Peru and Brazil in the forecast period will havea strong positive impact on turnover. Traffic data are collected for the rail sector and here we predictaverage annual growth of 5.0%. As far as maritime freight carried is concerned we expect growth to average 8.5% a year. Although theglobal downturn in trade and shipping pulled this number down in 2009, in the forecast period startingfrom 2010 we see a recovery on the back of mineral exports, extra investment in the ports as more privateoperators are brought in and, towards the end of the period, the initiation of significant LNG shipmentsfrom the Camisea field. In airfreight we are projecting average annual growth of airfreight tonnage of5.0%. Get Full Details About This Report >> |
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