At least five Chinese consortiums are interested in tendering for the new port of Sines terminal in southern Portugal, the largest tender to be launched over the past hundred years, with an approximate value of US$ 650 million. The tender is set to launch in 2018, or early 2019.
These Chinese consortiums are currently in contact with the Port of Sines and the Algarve Authority (APS, in Portuguese), as well as aicep Global Parques, a state-owned company that manages industrial parks across Portugal.
Both Portugal and China believe this could fall under the Belt and Road Initiative. Recently, APS approached COSCO Shipping, which is the largest Chinese shipping company and has a strong presence in the port of Valencia in Spain and also in the Greek port of Piraeus (Athens).
Chinese investment in the port of Piraeus is seen as an advantage by the Portuguese port sector as it could mean the opening up of the Portuguese port to the Atlantic, and in particular, routes operated to South America and Africa, most of them Portuguese-speaking countries.
The Portuguese government has also been preparing the railway link tender which will allow for a direct connection between the port of Sines (and those of Setúbal and Lisbon) to Badajoz, in Spain. Thus, completing part of the Atlantic corridor with the objective of bringing Portuguese ports closer to the rest of the Iberian Peninsula and Europe.
This will be the most extensive new railway line built in Portugal in the last hundred years and it will shorten the connection from Sines to Badajoz by 140 kilometers, reducing travel time by half (4 hours), and reducing transport costs by 30%.
The future Evora-Elvas-Badajoz line will permit 12 trains to pass through per day resulting in 660 trucks removed off the highways, a number that is expected to triple in the next decade.
In total, this new line represents an investment of 530 million euros, half of which are financed by European funds, and will be built over the next 20 months. The Minister of Planning and Infrastructures, Pedro Marques, said “this is truly an investment that strengthens the port of Sines as well the greater region of Madrid [Spain], but is even more important to Estremadura [Spain] and Alentejo.”
In addition to the railway investment that will give Sines the ability to ship goods, the government is also responsible for the construction of a jetty in the port, which will serve the new container terminal, a project known as “Vasco da Gama,” in honour of the Portuguese explorer born in Sines.
The investment in the terminal itself, which in the first phase should amount to US$ 300 million, and in the second phase to US$ 650 million, will be supported by the private consortium. They will have a concession to operate the infrastructure.
Along with a terminal operated by the Port of Singapore Authority, the port of Sines has a logistics and industrial park. The park includes a Galp Energia refinery, a natural gas terminal (operated by Redes Energéticas Nacionais, which has as a main shareholder the China State Grid group), a power station of EDP – Energias de Portugal (whose main shareholder is China Three Gorges), and a coal terminal, among other infrastructures.
In the first quarter of 2018, the port of Sines accounted for 48.1% of total freight movement in Portuguese ports, totaling around 10.3 million tons.
Data from the National Statistical Institute (INE) reveals that 9.6 million tons are international trade, while the remaining 0.7 million tons corresponds to national traffic. In both indicators, the port registered a decrease of -12.9% in national traffic and -18.2% in international traffic.
The Portuguese authorities, and in particular Global Parques, also want the logistics park to attract Chinese industrial companies; enabling them to process their products locally for re-export to European Union countries with the European “stamp.”
The Port of Sines was one of the places visited on 22 June during the annual meeting between businessmen from China and the Portuguese-speaking countries, with investment and trade promotion agencies from China and Macao, Portugal, Brazil, Angola, Mozambique, Cabo Verde, Guinea-Bissau, Timor-Leste and Sao Tome and Principe.
At the same time, Edmund Ho, Vice-Chairman of the Chinese People’s Political Consultative Conference and former Chief Executive of Macao, led a delegation to visit Lisbon.
Chinese financial institutions such as Bank of China, ICBC and China Construction Bank, as well as China Exim Bank and the Silk Road Fund, insurers and also construction companies, such as China State Construction Engineering Corporation, which opened an office in Portugal earlier this year, took part in the delegation.
Weekly newspaper Expresso reported that China Construction Bank is close to buying a 7.5% stake in Lusoponte, which manages the Vasco da Gama and 25 de Abril bridges that link Lisbon to the south of Portugal.
The paper also said that Portuguese company Teixeira Duarte has been selling some of its businesses and has already signed an agreement to sell his stake in the bridges. However, he is still subject to a possible exercise of preemptive rights by the main shareholders of Lusoponte. Mota-Engil and France’s Vinci are the largest shareholders of Lusoponte, with 38% and 37%, respectively, and Atlantia with 17.5% of the capital.