EconomyFinancialA country with stranded transport

A country with stranded transport

Among the many lessons that the national strike has left us, there is one that stands out these days: Colombia has a high dependence on road freight transport. Blocking a few roads is enough to paralyze the economy.

The economic cost of social protests already exceeds $ 10 billion, according to a study by the economic and financial analysis firm Sectorial. This figure is very close to the goal of collection via taxes that the Government wants to obtain with the next tax reform.

The figure is the sum of the loss of crops in agricultural activity, the increase in food prices, the limited access to supplies for the raising of animals for consumption, the increase in the costs of industrial production, the scarcity of raw materials, the reduction of productivity in businesses that operate at mid-range and the price of preventive closings, among others.

These events have something in common: their high dependence on logistics, that is, on the movement of goods within the country. If the articles that are produced or imported for national consumption cannot reach their destination, it is hardly understandable that they are scarce or rise in price and even that the production chain is broken.

More than 70% of the cargo generated in Colombia moves by road. The slightest blockage on the roads, or any cessation of activities by the transport union, hurts the economy. In the current context, we have been dealing with the two circumstances mentioned for more than a month on account of the national strike and the truck driver strike, while their spokesmen (trade union organizations and independent truck drivers) negotiate dozens of petitions with the Government.

Given that freight transport has in its hands the supply of essential goods in Colombia and the supply of inputs for other economic activities, it is time to ask how guaranteed the provision of the service is. More now, in times of economic recovery.

Nidia Hernández, president of Colfecar, one of the most important unions of freight transport businessmen, assured that during this strike the situation in the sector has been critical, even more than in April 2020, which was the worst month of the pandemic: “The movement of cargo during the protest time has presented a reduction of 0.4% compared to last month.” According to his report, the blockades have affected at least 29 departments in the country.

The situation is particularly complex because Colombia does not have a cargo transportation system to support the highway system. On the one hand, only half of the railway network built is active, and it is partially used; on the other, the most important river in the country, the Magdalena (it crosses eleven departments and empties into the Caribbean Sea), does not have conditions that guarantee its navigability.

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Trains are history

Colombia had 3,515 kilometers of railway networks in operation until the 1960s. Today, despite the fact that the infrastructure is still available – not all of it in good condition, it is worth clarifying – half of it is inactive and the rest (1,619.6 kilometers) is partially used.

In theory, the Atlantic railway (Chiriguaná-Santa Marta), the central corridor (La Dorada-Chiriguaná) and the Bogotá-Belencito line are currently in operation, not including the private networks of Cerrejón (La Mina-Puerto Bolívar) and Paz del Río (Belencito-Paz del Río). However, traffic is suspended on the Bogotá-Belencito and La Dorada-Chiriguaná railways, because the contract that the National Infrastructure Agency (ANI) had with the administrators ended, so, in summary, only the concessionaire Fenoco is providing service in Chiriguaná-Santa Marta.

This government has insisted that trains are a priority, as was also stated by the two previous administrations. In fact, in November 2020 it presented a Railway Master Plan that details the roadmap to reactivate this mode of transport in the medium term. For now everything is on paper.

The engineer Gustavo Arias de Greiff, one of the people who knows the most about trains in the country, recalls that between 1869 and 1929 much progress was made in railway infrastructure; However, “with the change of government (from Miguel Abadía Méndez to Enrique Olaya Herrera), highways began to be built parallel to the railroads throughout the country,” he told El Espectador in an interview in 2018.

Both experts and witnesses of the time repeat that the train was drowned, among other things, by transport companies that wanted to keep the business. The truth is that reactivating the network is not an easy task. Much of the remaining infrastructure cannot be used, because it is inefficient and it takes billionaire resources to build a new one.

Reliving the train is more than a whim. The mobilization of rail freight offers competitive advantages that far surpass other transport systems: by train, more cargo is moved, operating costs are lower, it is a safe means of transport, it generates less pollution, it helps to decongest traffic. of cities, it invigorates and reactivates the economy of its area of influence, optimizes the logistics chain in large cities and complements itself very well with other modes of transport (road, sea and river).

One more thing: in the past the railroads linked the country with the Magdalena River, which was exploited as the main river artery since colonial times; By 1900, a large part of the country’s cargo moved through this tributary.

The precariousness of the Magdalena

The fluvial transport network is made up of 16,877 kilometers of navigable rivers of the primary network and 8,454 kilometers of secondary network in the Orinoquia, the Amazon, the Pacific region and the Magdalena basin, according to a document from the National Institute of Roads (Invías). The service is served through 80 national and regional ports.

But, like the railroad network, these flows need maintenance. To fine-tune them, Invías structured the Colombia Fluvial program, which set out to improve 6,000 kilometers of waterways with piers, piers, dredging, ferries and protection works. The investment has been progressively executed. A few days ago the entity announced that it will allocate $ 26,000 million for the adaptation of river infrastructure in nine departments of the country.

However, the most ambitious of the projects in this mode of transport is the adaptation of the Magdalena River. To achieve this, the ANI will sign a public-private partnership (PPP) for 15 years, whose value exceeds $ 1.4 billion to intervene and maintain 668 kilometers between Barrancabermeja (Santander) and Bocas de Ceniza (Barranquilla). The objective is to increase freight transport through the corridor and reduce the costs of the logistics chain with its exploitation.

River transport is one of the oldest in the world, it is believed that it began to be used centuries ago given the need to transport and commercialize merchandise. According to the records of the Bank of the Republic, the conqueror Rodrigo de Bastidas was the first to identify the Magdalena River, in 1501. Navigation was done in canoes throughout the colonial period until the arrival of steamships in 1800. Over the years , increased runoff and sedimentation have made navigation more difficult, according to researcher Germán Márquez Calle. Currently move

But the Magdalena is not the only river with navigable potential. According to the Intermodal Transportation Master Plan (PMTI), which was projected for 20 years, optimal conditions have been identified in at least seven rivers: Meta, Guaviare, Vaupés, Putumayo, Caquetá, Atrato and Magdalena.

The truth is that the dream of taking advantage of the Magdalena’s potential has been rather a nightmare. Frequent, multi-million dollar investments have been made for decades. In 2014, the Government hired the Navelena consortium for $ 1.3 billion to carry out the dredging and channeling works (deepening the river and conducting the current), but the contract had to expire in 2017 due to the firm’s ties with Odebrecht after the corruption scandal in ten countries. Structuring the current project took around three years and the tender is expected to take place this year.

Like the train, river transport is essential because it allows increasing the load capacity to be mobilized and saving costs in freight, in addition, it is up to nine times less polluting than road transport, with carbon emissions of 0.56 grams per kilometer route and tonne transported.

National Planning organized a Logistics Mission, which took place between 2016 and 2018, which showed that the cost of moving a container between Bogotá and the Caribbean Coast could be reduced by more than 26% if the railway line from La Dorada to Santa Marta was used and up to 50 % if it were transported by the Magdalena River to Barranquilla.

Multimodalism is not a whim, ongoing projects will be decisive to improve logistics efficiency and reduce the costs of goods movement, which in Colombia are particularly high (13.5%, when in OECD countries they are 9% ), in addition, they will help the country reduce its dependence on road freight transport and will stop making roads sensitive to public order situations.

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