Chancay megaport
- Latam Sin Filtro
- Dec 6, 2024
- 6 min read
Updated: Mar 2
Since Xi Jinping came to power in China, the government has launched its new "Belt and Road Initiative" (BRI), one of the main projects of China's foreign and trade policy.
This initiative makes reference to the historic Silk Road which was a network of trade routes that was established during the Han Dynasty of China in 130 BC, connecting the different regions of the world through trade until 1453 AD.
In September 2013, Xi JinPing announced the Belt and Road Initiative, an ambitious trade plan involving the injection of resources and the construction of infrastructure such as roads, bridges, railways and ports in strategic countries around the world, in order to consolidate the global presence of China and its companies. Some $3.5 trillion has been injected since 2017 and some 150 countries are participating in this project. Since 2021, China has signed cooperation agreements under the project with 21 Latin American countries and implemented 192 infrastructure projects in the region. Peru is one of them.
CHANCAY MEGAPORT
The Peruvian government has granted more than 60% of the port terminal to the Chinese group Cosco Ports for the construction of a mega port, 80 km north of Lima, in Chancay. It will be connected to the center of the country by a motorway. This mega port could absorb a large part of the flows from the west coast of the continent. Construction began in 2016, and the port's first terminal is expected to be operational by mid-2023.
What is the belt and road initiative and how is it related to peru?
Credit: Erick Retana, Connectas.org
This project aims to make Peru the logistics hub of the South Pacific, a key project in the growing trade between the Asian power and the South American country. The port of Chancay alone could represent 50% of trade between Asia and South America in the long term.
China is one of the countries that has invested the most in Peru with about $117,000 million in investments at the end of 2021. Chinese investments in Peru are the second largest that the country undertook in Latin America, after Brazil, demonstrating Peru's involvement in the Chinese initiative.
However, political instability in Peru with six different presidents since 2016, the impeachment of President Pedro Castillo in December 2022, and the current violent protests are affecting cooperation between the two countries, including the advancement of the Chancay project.
Port activities
The megaport will be used for the export of raw materials such as copper and other minerals that the region exports to China and Asia in general. However, priority will be given to the country's agricultural products. The Chancay Port Terminal will be a multi-purpose port that will be able to receive and export goods in containers, bulk goods, liquid commodities in liquid bulk cargo and rolling stock. The port is expected to receive and embark the world's largest ships with a capacity to carry 18,000 containers.
La Organización del puerto
3 aeras:
Port terminal: port activity zone. It includes docks, storage areas for bulk cargo and rolling stock, maintenance areas and workshops.
Berth: vehicle anti-port, port terminal access gates, customs inspection area, administrative offices and logistics service areas. They are located to the east of the port terminal, at about 2 kilometers.
Underground tunnel: tunnel connecting the entrance to the port operating area, 1.8 kilometers long and allowing the transit of goods. It will have three lanes for traffic, two lanes for the transport of solid bulk goods and pipelines for liquid bulk.
Additional infrastructure:
The Chancay megaport project involves the construction of roads not only to connect the port to the neighborhoods but also to connect the center of the country.
In addition, the construction of the Chancay mega port is increasing the value of land near the terminal. The mega port will generate increased demand for office, retail and residential infrastructure. The construction of this mega port is an excellent opportunity to review the organization of the area around it and to develop the activity. The district of Chancay is planning an expansion of the surrounding towns.
WHat dOES the construction of the Chancay megaport implies for the region and the country overall?
Port activity: this new port will relieve congestion in Peruvian and Latin American ports in general, which are saturated as ships with large drafts cannot access the port. This mega port will be able to generate a significant flow of goods. Peruvian economist Carlos Aquino says that "with the mega port of Chancay, which will be able to accommodate the largest ships in the world, it will be possible to transport goods from Lima to China and related activities will be developed, it will be possible to develop free zones, and transport new products from the mountains and the rainforest".
Economic dynamism: The construction of this terminal will improve Peru's competitiveness in the long term. It will also be a driving force for foreign trade. Chancay will become a regional hub that will connect Peru with Chile, Ecuador and Colombia. In addition, the project will promote the development of the country as it will have the ability to export its goods to many countries.
The Chinese and Peruvian governments say the port will promote the region's development, employment and trade. According to the Chinese Embassy in Peru, the construction of the port is already generating 1,300 direct jobs, with an additional 5,000 direct and indirect jobs expected when the port starts to operate.
Social impacts: As part of the development of the project, the Peruvian government plans to deploy social infrastructure and carry out studies of investment projects that would contribute to the development of the neighboring towns. Similarly, actions are encouraged in the education sector with academic scholarships and a study for the expansion and improvement of education in Chancay through investment has been funded and carried out. The health services of Chancay Hospital are also being developed.
Environmental impacts: Critics of the mega port denounce the damage caused to the environment. A group of civil organizations in 2018 shows in a report that the construction of the port would cause irreparable damage to the Santa Rosa wetland, a 77-hectare space where the port is built. The port could impact hundreds of bird species currently affected by blasting and activity from trucks as well as heavy machinery. Another report conducted by a German biologist shows that the construction of the port is causing coastal erosion and will have an impact on marine wildlife due to the heavy traffic of deep-draft ships that the port is expected to accommodate.
However, on its web page, Cosco Ports claims to be raising awareness among its workers about the protection of the environment and biodiversity. The company says it has a "strict recycling and solid waste collection program, promoting a circular economy."
Impact on the populations surrounding the works: Many neighbors have seen cracks appear on the walls of their houses and entire neighborhoods have been evacuated due to the explosions, which can have psychological impacts on the population.
Several demonstrations were organized in 2019 and 2021 by the inhabitants of Chancay to demand better protection of the environment, human health and to denounce the explosions as well as noise pollution caused by the works. Many activists and citizens have accused the Chinese company of downplaying the environmental impacts of the mega port’s construction.
Credit: Coordinadora en Defensa de los Intereses de Chancay, “Impactos del puerto multipropósito terminales portuarios Chancay – Volcan”, diapositiva 33, Congreso de la República del Perú(2022)https://ceeep.mil.pe/2023/05/10/megapuerto-de-chancay-repercusiones-en-el-comercio-sudamericano-e-impacto-geoestrategico/
ConclusiON
To conclude, the future mega port of Chancay could be a driver of economic development for Peru and for Latin American countries because investments in logistics infrastructure will multiply foreign and intra-regional trade. Chancay District also plans to invest in social infrastructure as part of this project, although the current political crisis may postpone the official opening of the mega port.
The construction of the Chancay mega port is a geopolitical project reflecting the foreign policy of China. The Chancay mega port is part of a Chinese initiative, allowing the Asian power to expand its area of influence in Latin America to the detriment of another historical actor in the region, the United States. Since the late 1990s relations between the United States and Latin America have deteriorated while at the same time relations between Latin America and China have been intensifying.
The president of the National Port Authority (APN) of Peru, Manuel Hinojosa López, announced that his country is planning the construction of a new mega port in the Arequipa region. This is the port of Corio. Although until now the latter has never been more than a vague dream, its construction is said to be about to see the light of day. It is estimated that the work would require an investment of $2,500 million and would allow for the berthing of vessels with a draft of up to 22 meters. In addition, the port's land terminal would be connected to an airport.
Faced with this, neighboring countries such as Chile fear competition from the future mega port of Peru. Indeed, Chile has announced a project to expand and renovate its ports in the coming years, including the port of San Antonio located in the center of the country with the "Puerto Exterior" project aiming at accommodating ships up to 400 meters long.
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