PORT OF SINES TERMINAL XXI: WHICH DEVELOPMENT SCENARIOS?

Manuel Tão, Universidade do Algarve (mtao@ualg.pt)

Frederico Ferreira (frederico.ferreira@netvisao.pt)

Elisabete Arsenio, LNEC I.P. (elisabete.arsenio@lnec.pt)

Abstract

The Port of Sines “Terminal XXI” is an Iberian sea container harbour capable of accommodating

vessels of the “Post-Panamax” type. Located in the South of Portugal´s West Coast, “Terminal

XXI” bears a unique location towards the Atlantic (37º57´N, 08º53´W), being the result of a thirty

year-long public concession awarded to the Port of Singapore Authority (PSA) on a BOT model

basis. The main sea container carrier associated is the Mediterranean Shipping Company (MSC).

This paper aims to assess the likely developments of the Sines “Terminal XXI” container facility,

presenting alternative development scenarios, set at three distinct periods: i) 2014-2020, during the

first years after the widening of the Panama Canal; ii) 2020-2030, including the fully completion

and bringing into commercial operation of the new RTE-T “Corridor 16” Rail Link; and iii) beyond

2030, contemplating the establishment of a Central Pyrenean Tunnel as an alternative to the

historical and traditional rail links, via the Basque Country and Catalonia, and the widespread use of

1435mm standard-gauge tracks, replacing the 1668mm broad-gauge ones, currently existent on

virtually all conventional (non-high speed) main line railways of the Iberian Peninsula.

Recent proposals concerning the possible constitution of an American-EU Free-Trade Area on a

medium-term period, further emphasize the likely importance of Sines “Terminal XXI”. Since the

port of Sines presents a unique deep-water Atlantic container terminal in Western Europe, research

results are expected to provide useful indicators for policy purposes, leading to more sustainable

development patterns of global freight and logistics.

1. Introduction - Presenting Sines Harbour Terminal XXI

Portugal has a strategic location in the Atlantic European coastal area and the Iberian Peninsula,

being crossed by principal maritime routes North-South and East-West (ENM, 2013).

The Port of Sines “Terminal XXI” is an Iberian sea container harbour capable of accommodating

vessels of the “Pos-Panamax” type. Located in the South of Portugal´s West Coast, “Terminal XXI”

bears a unique location towards the Atlantic (37º57´N, 08º53´W), being the result of a thirty year-

long public concession awarded to the Port of Singapore Authority (PSA) on a BOT model basis, in

2004. As a deep water port (17.5m ZH depth), Sines “Terminal XXI”, presents a capacity of

handling 1.320.000 TEU´s per year, over a 940m long quayside, and includes a 24 ha (38,4 acre)

storage surface. Up to a total of 230,4 Million Euros were invested by PSA in Terminal XXI.

Figure 1: The privileged Atlantic positioning of Sines and its container Terminal XXI

(Source: APS – Administração do Porto de Sines)

2. Main target markets of Terminal XXI?

Sines Harbour Terminal XXI is inserted in a broader territory of mainland Portugal designated by

Alentejo Region. This is a vast extension of land, accounting roughly for one third of Continental

Portugal. But, in reality, such region delivers a very limited contribution in terms of national GDP

and demographic strength (Table 1).

Table 1: Sines Harbour and its near region

Alentejo Region (2010) Portugal (2010)

Surface Km2 31.605 92.212

Population (Residents) 749.055 10.562.178

Population Density(inh/ Km2) 23,7 114,5

Gross Domestic Product 106€ 11.027 172.571

GDP/capita 103 € 14,70 16,20

Source: INE-Portugal and AICEP – Portugal Global

A deep-water container terminal, able to accommodate Post-Panamax vessels can hardly be

justified by the local market presented by the Alentejo Region. Its role can only be explained in the

light of a much bigger “hinterland”, comprising the whole mainland Portugal and also the center of

the Iberian Peninsula, with a particular emphasis placed on the Comunidad Autonoma de Madrid.

Table 2: A comparison between Portugal and Madrid, Sines potential “hinterland”

Portugal (2010) Comunidad de Madrid (2010)

Surface Km2 92.212 8028

Population (Residents) 10.562.178 6.458.684

Population Density (inh/ Km2) 114,5 804,6

Gross Domestic Product 106€ 172.571 188.076

GDP/capita 103 € 16,20 29,11

Source: INE-Portugal, INE – España and AICEP – Portugal Global

The Region of Madrid assumes a leading role from the economic perspective, its GDP surpassing

the whole economic output of Portugal, both in absolute and relative to the resident population.

Sines Harbour´s Terminal XXI, and its thirty-year long concession to the Port of Singapore

Authority, together with its association with a major planetary logistics operator (MSC), may only

be understood by the Atlantic positioning relative to the center of the Iberian Peninsula, and its

generation of international freight, both import and export flows.

The importance of the Comunidad de Madrid, as a major World economic player within a

globalized market may be even further emphasized when the main geographical patterns of its

international trade are observed.

Table 3: Exports and Imports of the Comunidad de Madrid at a glance

Exports (FOB) Imports (CIF)

2010 Operations Amount Weight Operations Amount Weight

(Nº) € 1.000 Tonnes (Nº) € 1.000 Tonnes

TOTAL 1.650.494 21.580,17 9.822.535 2.712.455 52.171,43 16.833.983

EUROPE 841.652 13.905,90 4.713.788 1.630.558 35.396,32 9.767.783

AFRICA 76.271 1.290,30 875.883 30.705 947,91 1.453.039

AMERICA 250.912 2.551,10 884.846 350.574 5.847,95 3.082.521

NORTH AMERICA 97.371 1.390,12 276.636 288.107 4.158,79 763.135

Of which USA 69.723 1.135,99 173.064 275.373 3.920,02 664.437

Of which Canada 27.645 254,11 103.571 12.725 238,77 98.697

CENTRAL AMERICA 99.167 503,89 119.555 25.113 480,73 83.116

SOUTH AMERICA 54.374 657,10 488.655 37.354 1.208,43 2.236.270

ASIA 268.922 1.803,50 502.506 685.358 9.292,30 2.329.863

Of which Korea 7.507 116,73 12.823 27.454 335,09 38.573

Of which Japan 16.295 357,22 10.684 80.394 822,34 167.332

Of which Taiwan 1.819 67,04 16.432 33.673 312,13 27.723

Of which Hong Kong 12.658 133,20 30.072 17.509 110,35 4.162

Of which India 8.648 116,76 31.201 54.666 617,52 315.251

Of which China 25.866 239,74 111.172 378.768 5.054,58 773.512

OCEANIA 4.109 346,88 21.314 3.613 135,63 4.573

Of which Australia 3.210 326,77 20.270 2.714 116,76 1.663

Of which New Zealand 607 18,70 926 850 18,68 2.852

Source: Instituto Estadistico de la Comunidad de Madrid. Comercio Exterior (2010).

Of both the Export and Import flows originating/towards the Region of Madrid, susceptible of being

mostly carried by sea transport, North America, Central America (Mexico and Caribean), and South

America, on the one hand and Asia (China, India and Japan), on the other hand, emerge as major

geo-economic areas generating traffic. The first three groups of Origins and Destinations are

logically prime users of the Atlantic Ocean routes, as a support to their trade flows, whereas Asian

trade relies mostly on the Mediterranean and Suez/Indic Ocean traditional routes.

Figure 2: The logical potential “hinterland” of Sines Terminal XXI in Iberia

Source: APS – Administração do Porto de Sines

3. Terminal XXI and its Iberian competitors

Being a “Post-Panamax” facility, Sines Harbour Terminal XXI appears as a recent additional

infrastructure to the very restricted group of container ports of such a kind in the whole Iberian

Peninsula. The other three container ports with the same characteristics are all located in the

Spanish territory, more precisely in the Mediterranean Sea: Bahia de Algeciras, Valencia and

Barcelona. A brief comparative description with Sines Terminal XXI can be summarized as

follows:

Table 4: A comparison between Sines Terminal XXI and its Iberian competitors

Depth

(ZH)

Distance to

Panama

Container

Traffic

Container

Traffic

Growth Rate

2009/2012

Land

Availability

(m) Nautic Miles 2009 (TEU) 2012 (TEU) %

Algeciras 16 4376 3042782 4070791 34 Very scarce

Valencia 14 4754 3653890 4469754 22 Very scarce

Barcelona 16 4885 1800662 1749974 -2,8 Limited

Sines 17,5 4168 253495 553065 118 Good

Source: APS – Sines, 2012; Estadisticas de los Puertos de Estado, Ministerio de Fomento.

Madrid, 2013 and Moreira, P.J.P, 2013.

Valencia Port is from 2008, the most important sea container terminal in the Iberian Peninsula, and

the prime freight World access to the Comunidad de Madrid, closely followed by Algeciras. But

what is remarkable is Sines Terminal XXI growth rate within less than a decade of existence.

Recent estimates pinpoint traffic loads of 800.000 TEUs for Sines Terminal XXI at the end of 2013

(APS, 2013), denoting a sustainable tendency of traffic increase, which is even more relevant taking

into account the general economic recession affecting the Euro Zone, and Portugal, in particular.

There are other qualitative aspects in which Sines Terminal XXI appears with a clear advantage

over its closest Post-Panamax Iberian competitors: land availability for expansion and Atlantic

positioning. As far as the latter is concerned, Sines is closer to main American ports than any other

deep-water sea container terminal in Iberia.

Table 5: Atlantic sea distances from Terminal XXI and its competitors to Americas

Santos (Brazil) Buenos Aires (Arg) New York (USA) Halifax (Can)

Nautic Miles Nautic Miles Nautic Miles Nautic Miles

Sines 4062 4964 2864 2392

Algeciras 4403 5305 3205 2733

Valencia 4781 5683 3583 3111

Barcelona 4912 5814 3714 3242

Source: National Geospatial-Inteligence Agency. Distances between ports. Bethesda,

Maryland, 2001.

4. Terminal XXI and the widening of the Panama Canal

The Atlantic positioning of “Terminal XXI” acquires a particular importance in the wake of the

Panama Canal widening. From 2018 onwards, it will be possible for the Post-Panamax container

carriers, to follow a new planetary route linking the emerging economies of Far East Asia and those

of Western Europe, with a passage by North America´s East Coast, as an intermediate point. The

economies of scale brought about by the new route, presenting itself as an alternative to the

traditional Indic-Suez and Cape Horn-South America routes, is susceptible of originating a re-

configuration of the pattern of “Post Panamax” vessel routes worldwide, with an increasing

emphasis being conferred to the North Atlantic. Even if a combination of world Post-Panamax

routes, under a “round-the-world” basis, by the simultaneous use of both the Suez Canal and the

widened Panama Canal route becomes feasible (Notteboom, T. e Rodrigue, J-P. ,2009), a higher

importance of the Atlantic sea container routes appear as most likely.

The "trade-off" between the costs per TEU, carried on conventional Panamax ships, from the Far

East economies to America´s East Coast (and therefore Eastwards through the open Atlantic to

Europe) can be illustrated as follows:

Table 6: Annual Cost per TEU (including Panama Tolls) of a typical Far East-NY Route

Hong Kong to New York via Panama Evergreen Line: (11,211 Nautic Miles)

Cost per TEU moved (U$)

Current

Panamax

Post-Panamax

(1)

Post-Panamax

(2)

Annual Total Vessel Cost (U$) 54,908,090 106,054,472 105,715,772

Vessel Utilization 80% 80% 51%

TEU moved (round-trip voyage) 6400 19200 12240

Annual Trips per Vessel 5.8 5.8 5.8

TEU moved per year 37079 111238 70914

Cost per TEU moved (U$) 1481 953 1491

Source: NC Maritime Strategy. Vessel Size vs. Cost (2012)

As it can be observed, an 80% ship loading enables an approximate overall 33% cost reduction per

TEU, on the route between the Far East and the ports of North America´s East Coast, if Post-

Panamax vessels are employed, from 2018 onwards. This route is mostly the Pacific portion of a

longer intercontinental path to the European Atlantic ports, alternative to the Suez route.

The Atlantic positioning of Sines Terminal XXI is emphasized by the fact that it matches perfectly

the main Panama Canal routes established between either its most direct competitors in the Iberia,

or even the planetary harbours located in Northern Europe.

Table 7: Distance between Sines, several other European post-Panamax

container terminals and the Far East, via widened Panama

Singapore

(SG) Hong Kong

(HK) Shangai

(CN) Kobe (JP)

Nautic Miles Nautic Miles Nautic Miles Nautic Miles

Sines 14,673 13,293 12,734 12,132

Algeciras 14,881 13,501 12,942 12,340

Valencia 15,259 13,879 13,320 12,718

Barcelona 15,390 14,010 13,451 12,849

Le Havre 15,122 13,742 13,183 12,581

Antwerp 15,320 13,940 13,381 12,779

Rotterdam 15,315 13,935 13,376 12,774

Source: National Geospatial-Inteligence Agency. Distances between ports. Bethesda,

Maryland, 2001.

Moreover, the increase in distance, resulting from switching routes from Suez-Indic to Pacific-

Atlantic, once the Panama Canal is widened, remains very much in line and within the same

magnitude experienced for a set of competitors, with a slight advantage towards Iberian post-

Panamax container ports, and a small disadvantage relative to the major ports of Northern Europe.

Nevertheless, transport costs increase less that proportionally with distance, roughly 2% for every

10% of mileage Micco et al. (2001) and Fink et al. (2000). Therefore, the overall cost increase

accruing from a greater distance being travelled by Panama becomes clearly offset by the savings

enabled with the scale of operations of Post-Panamax vessels. As in the case of Panama, the Suez

passage is also subject to the levy of tolls.

Table 8: Distance increase between Sines, several other European post-Panamax

container terminals and the Far East, via Panama, relative to Suez-Imdic Route

Singapore

(SG) Hong Kong

(HK) Shangai

(CN) Kobe (JP)

% % % %

Sines 51 32 26 18

Algeciras 53 35 29 22

Valencia 56 39 33 26

Barcelona 57 40 34 27

Le Havre 44 26 19 12

Antwerp 44 26 19 11

Rotterdam 43 25 18 11 Source: National Geospatial-Inteligence Agency. Distances between ports.Bethesda,

Maryland, 2001.

The post-2018 scenario, with the full completion of Panama Canal widening, suggests the

establishment of a new hierarchy of planetary sea routes. However, such routes are not likely to be

captured equally by all the possible competing Post-Panamax terminals located on the European

side of the Atlantic. There are a set of port endogeneous and exogeneous variables which appear to

be determinant, to explain inter-port competitiveness. A different number of authors and their

respective approaches mention more or less factors susceptible of explaining port choice: Decruet

and Noteboom (2010), refer at a maximum eleven influential factors, whereas Zondag (2008)

concentrates on just seven. Owing to its strategic positioning as a deep-water container port, Sines

“Terminal XXI”, is a likely candidate, to become integrated into the new emerging global logistics

network. For this purpose, transport intermodality will play a key role for cost reduction. Some of

the endogeneous variables, such as port operation efficiency, are to a great extent in reach of an

entity, such as the Port of Singapore Authority (PSA), and the Mediterranean Shipping Company

(MSC), its main associated sea carrier. But other aspects, regarding for instance, the establishment

of land transport infrastructure determinant to port "hinterland" size and a greater number of inland

final clients, depend strictly on decision-makers and the expenditure of public funds.

5. Terminal XXI and the problem of the inland traffic: the rail accessibility

Hitherto, it has been stated that the natural “hinterland” of Sines Terninal XXI, is the Region of the

Comunidad de Madrid, overlapping with each one of the much-better established post-Panamax

counterparts lying in Spanish territory along the Mediterranean (Algeciras, Valencia and

Barcelona). But no details have been given yet on the crucial factor of rail accessibility. The scale

of operation of such kind of container terminals relegate road transport to insignificance. Studies by

Wilsmeier and Notteboom (2010), state that the configuration of the maritime service lines are not

just the result of exogenous factors related to the development of trade and the dispersal of

economic activity in the hinterland. The authors emphasize endogenous factors, such as the local

environment of the port, access to the hinterland, the strategies of market players and government

policies, as well as the public investment made in basic infrastructure and interconnectivity of the

hinterland throw a key card in allowing fast, efficient and reliable land connections. Martinez-

Zarzoso et al. (2005) e Combes et al. (2005) stress how the quality of transport infrastructure plays

a determinant role in the overall cost. Arionetis et al. (2010) state that shipping companies decision

to call at a port cannot be made without available cargo from/to that port, which is closely linked to

ports’ geographical location and the area that can be served through it.

The only existing rail accessibility linking Sines Terminal XXI to the center of the Iberian

Peninsula and the rest of mainland Portugal was not designed to serve a post-Panamax sea container

interchange. It results from a set of historical circumstances that a former rural 50 Km-long railway

inaugurated as late as 1937, and branching off one of the two main lines from Lisbon to the South,

became, de facto, the only existent Sines rail accessibility to the present day. Eventually, the line

was upgraded and even electrified in 2002 (together with the main line from Lisboa to Faro, to

where it is connected). But its insertion within the active Portuguese rail network does not account

for a direct route to Madrid through the logical Extremadura Community land gateway (via

Badajoz): Instead, any rail movement from Terminal XXI towards Spain involves necessarily a

circuitous itinerary, using many sections of mostly congested single-track.

Figure 3: The lengthy Sines rail access to Spain and the need of Corridor 16

Source: REFER (Portugal)

The shortcomings of the rail link to Terminal XXI are addressed by the main directives of RTE-T

Corridor 16. Such corridor includes building a 92 Km-long cut-off line from Évora to the

Elvas/Badajoz border enabling a saving of nearly 140 to 200 Km route distance and reducing in

nearly 50% the travel time to the border. Also, under the directives of Corridor 16, in Spanish

territory, the conventional line, from Badajoz to Mérida and Ciudad Real/Manzanares, enabling

access Madrid and the Mediterranean will be upgraded and electrified on the 25 kV 50 Hz as far as

Puertollano (existing 3 kV dc catenary Eastwards would mean the use of dual-voltage ERTMS

equipped motive power).

Figure 4: The full development of RTE-T Corridor 16 in Iberia

Source: TEN-T Executive Agency.

The Portuguese section from Sines to Évora is already fully upgraded, with the 92 Km “missing-

link” from Évora to Elvas/Badajoz border, having been contracted out after a bidding process by the

XVIII Portuguese Government in 2011, with completion and full operation being envisaged for the

three years kater. Since this project was suspended due to its financial sustainability, it is not known

when the scheme will be revived, since, unlike Spain (and its Ministerio de Fomento PITVI 2012-

2024), Portugal has not yet an integrated Master Plan for its rail (and other transport modes)

infrastructures. However, some efforts have been made to build a long-term National Strategy for

the Sea (until 2020) and, in 2011, of a Strategic Transport Plan focusing of the financial

sustainability of the transport sector.

The circuitous rail route from Sines Terminal XXI to Spain will therefore remain for a further

period (of uncertain time length) as the only possible connection to Greater Madrid, and such a

situation is a clear disadvantage, when a comparison is made with railway accessibility of the other

three pot-Panamax container terminal of the Spanish Mediterranean coast.

Table 9: A comparison of rail accessibility of Terminal XXI and its Iberian competitors

Rail

Distance

to Madrid

(*) (Km) Basic Infrastructure Characteristics

Algeciras 756

Algeciras-Bobadilla, under electrification.

Bobadilla-Madrid electrified 3 kV dc. (partly double track).

Valencia 464 Fully electrified 3 kV dc. Mostly double track.

Barcelona 665 Fully electrified 3 kV. Mostly double track, or with 3 alternative routes.

Sines 921

Electrified 25 kV ac 50 Hz Sines-Entroncamento, Diesel Eastwards.

Mostly single track.

(*)Approximate distances, not including the final approaches to Abroñigal Container

Terminal or Vicalvaro-Coslada Puerto Seco.

Hopefully, the opportunity of Sines Terminal capturing intercontinental traffic originating from the

Far East, resulting from the widening of the Panama Canal is far from being lost, since the scheme

has been slipped in time, from its initial 2014 target, to the year of 2018.

6. Supplementing Sines Terminal XXI: the new Vasco da Gama Terminal

Besides its privileged Atlantic location as a Post-Panamax container port, one of the biggest assets

of Sines is a considerable extension of free land, available for expansion. Such a condition positions

Sines very differently relative to the other three Iberian Post-Panamax container ports. Either

Barcelona or Valencia face physical constraints for further expansion, dictated by the proximity of

huge evolving urban areas, whereas Algeciras is strongly conditioned by natural factors of its bay,

the Strait and vicinity with Gibraltar.

The name of the 16th

century navigator Vasco da Gama was chosen to designate a new proposed

container terminal, to be located South of the present Port of Singapore Terminal XXI, and

supplementing it. When built, such terminal would have the following main characteristics:

- A double terminal with an annual capacity of 4,5 Million TEU´s, each.

- A 3360m-long quay.

- A 113 ha container storage area.

- Depth: -18m (ZH)

- Able to accommodate Post-Panamax vessels carrying 18.000 TEU´s.

Vasco da Gama Terminal would result, together with Terminal XXI, in a container handling

capacity of over 10.6 Million TEU´s per year. At present, no operators have made any firm decision

on Vasco da Gama, which would be set up following a BOT model basis similar to Terminal XXI,

run by the Port of Singapore Authority. Expenditure would reach as much as 931 Million euros,

with 705 Million being funded by the concessionary entity. (APS, 2013)

7. Beyond Iberia

Much public discussion has taken place in Portugal on the prospects of Sines Harbour, as a

container port, is its ability to capture traffic beyond the geo-ecomic space of the Iberian Peninsula.

Basically, Post-Panamax inter-port competition would not be limited to the Iberian “hinterland” and

its “puertos secos” (dry ports, such as Zaragoza´s PLAZA), but would extend to the core of

mainland Europe. Sines, together with Algeciras, Valencia and Barcelona would reveal some

capacity to abstract inland traffic from container port facilities in Northern Europe.

Corridor RTE-T 16, Sines/Algeciras-Manzanares-Madrid-Zaragoza-Pyrenées will take years, if not

decades to acquire its final form, as a major standard-gauge (1435mm), ranging from both Iberian

Atlantic ports to a so-called 40 Km-long “Central Pyrenean Base Tunnel” (Zaragoza-Tarbes),

without prospects of funding on a medium-term basis. As a standard-gauge passenger-dedicated

AVE high-speed network is progressing, full conversion of over 15,000 Km of 1668mm-gauge

conventional routes in Iberia has no foreseeable completion, apart from an isolated penetration from

France to Barcelona (eventually Tarragona, by 2016), by the addition of a third rail, under the

auspices of Spanish PITVI (2012-2024), “FERMED/Mediterranean Corridor”. Nevertheless, for an

undefined period, most conventional Iberian-gauge (1668mm) main lines will remain unchanged,

and connected with the French network by means of the usual axle-changing facilities, run by

Transfesa, located at border points such as Hendaye and Cerbère.

But even if rail accessibility and interoperability conditions of Iberian Post-Panamax ports were

been strengthened to the maximum extent, the reduction of generalized cost accruing from running

750m-long container trains (currently 450m being the maximum in Iberia) without any break of

gauge along the route, might not constitute a “trade-off” susceptible of matching the inertia of major

logistic operators and their long and well-established chains, associated with huge historical

harbours, such as, for instance, Antwerp or Rotterdam.

8. Prospective analysis: some insights

A prospective analysis for the Port of Sines cannot be presented without a considerable extent of

simplification. This is due to the vast number and different nature of both endogenous and

(particularly) exogenous variables, as main determinants for the development of planetary, trade

and consequently container transport.

As far as exogenous variables are concerned it will be assumed that for an horizon of 2030, the

widening of Panama Canal will have introduced a new pattern of sea routes, from Far East Asia to

Europe, wholly enclosed within the Western hemisphere, which are relatively immune to political

uncertainty to which the Suez Route, located in the Middle East is potentially more vulnerable. As

far as port endogenous variables are concerned, it will be considered that internal efficiency will not

differ greatly from competing Post-Panamax container terminals, with a higher degree of

automation being achieved by virtually all deep water ports in Europe, becoming increasingly more

capital intensive.

Hence, a brief prospective analysis for Sines Terminal XXI will be undertaken, based on the

following variables:

a) Exogenous;

1) Stage development of Atlantic Trade, between EU and America. This variable may

assume a conservative level (I) and an optimistic one (II), the latter reflecting the

creation of a Transatlantic Free Trade Area between the European Union and the USA

and Canada.

2) Stage development of trade, between the European Union and the big economies of Far

East Asia: conservative (I) and optimistic level (II).

3) Capacity of Portugal to capture foreign investment and trade flows from Brazil (or

Brazil-related) and other Portuguese-speaking states in Southern Hemisphere:

conservative (I) and optimistic (II).

4) Development of Rail accessibility. A conservative (I) level would consider no further

development whereas an optimistic level (II) would contemplate not only completion of

the Portuguese missing section providing a direct route to the Spanish border, but also

full upgrading of the whole remaining route of Corridor 16, from Badajoz to

Puertollano, the Center of Spain and beyond.

5) Fuel prices: a moderate increase (I) or a high increase (II), the latter bringing about a

penalty on the Panama route from Europe to Far East Asia, relative to a shorter Suez-

Indic route.

b) Port endogenous variables

1) Expansion of TEU handling capacity: conservative (I), as it is, with Terminal XXI

stabilizing at 1,5 Million per year or, optimistic (II), with the addition of a further 9 Million

TEU capacity, enabled by the construction of the new Vasco da Gama Terminal.

2) Port congestion at closest competing terminals: low (I) and high (II).

Many Scenarios, originating from combining Exogenous and Endogenous is possible to obtain, but

only a restricted number of them, appear to be realistic.

8.1.Horizon 2014-2020

8.1.1. The “strangled” port scenario

Exogenous variables, such as EX 1) EX 2) and 3) point at a lesser or greater intensity of trade flows

across the Atlantic (North in the first case and South, in the second). Sines and its Iberian

“hinterland” are more sensitive to the South Atlantic trade development, owing to the former

colonies of each one of the Iberian States, who maintain a strong relationship with them. Should EX

1) and EX 3) be combined with EX 4) (Rail Accessibility) in level I, and Sines would not be

prepared to challenge the role of harbours such as Algeciras and Valencia. Such a situation would

relegate Terminal XXI to a mere Portuguese “hinterland”, and throws attention on one of the

biggest present shortcomings of Sines as a planetary port scheme: absence of good rail connections,

compounded by a political and institutional framework where port planning is completely apart

from railway investment.

Such a scenario would be very adverse to Sines Terminal XXI, since the opportunity posed by the

widening of the Panama Canal would bring about benefits which would fall entirely on competitors

such as Algeciras, and particularly Valencia, which has excellent rail accessibility to Greater

Madrid and other Communities in Spain (development of a through third-rail mixed-gauge

(1435mm+1668mm from Barcelona to Valencia in 2016-20, would further increase the centripetal

force, by extending both ports “hinterland” to regions of the Languedoc Roussillon) . The risk of

such a scenario is real, since Portugal has no Rail Master Plan since it joined the EU in 1986, and

quite simple schemes, such as 92 Km of new line from Évora to the Spanish border of Badajoz take

years (if not decades) to materialize.

8.1.2. Terminal XXI challenging logistics hierarchy in Iberia Scenario

If EX 4) (level II rail investment) were combined with EX 1) EX2) and EX3) in a level (II), of

development of Rail Corridor 16, and also with the possibilities of Sines conquering part of the

Madrid “hinterland” would be significant: congestion of Algeciras, Valencia and Barcelona (EN2 ,

level II) being possibly higher to reach, in the light of physical constraints posed by the location of

any of these three ports. Sines Strategic Plan (Neptune Program, 2003), estimated as much as

887,000 TEUs per year, the container traffic originating (or directed) to the Comunidad de Madrid,

with the completion of Corridor 16 within Iberia.

This Scenario would imply a major political change in Portugal, directed at a new use for the

package of Structural Funds (Cohesion Funds, FEDER and others, up to 21,000 Million Euros) to

be awarded to the country in the period 2014-20. At time of writing, it is not known exactly what

investment in transport infrastructure is to benefit an investment-starved rail system, compounded

with the change of the internal political cycle, by 2015. Anyway, the 92 Km-long “missing link”

allowing a direct rail connection from Sines to Spain (Comunidad de Madrid and Aragón), would

require three years to build, and was evaluated at 222 Million Euros in 2011 (REFER, 2011). A

quite similar time span would be required to fully upgrade and electrify (25 kV, 50 Hz) the

conventional line, from Badajoz to La Nava de Puertollano (290 Km), along Extremadura and

Castilla-la-Mancha Communities.

8.1.3. “Latinamericanization” of Terminal XXI Scenario

Development of trade between Iberia and Far East Asia EX3) level I and level II (more intense)

might have a moderate or small impact on Sines and other Iberian deep-water container ports, if by

2030 fuel prices are high (variable EX5, level II). In an extreme case, the Panama route, via the

widened Canal, no longer would present a competitive alternative to the Suez-Indic route, with a

reflection on lesser traffic being captured. Deep-water container ports in Iberia would be mainly

directed to give a response to traffic flows between the Spanish and Portuguese economies, and

those emerging ones which were former colonies: Castillian-speaking Latin America, on the one

hand, and Brazil, on the other.

8.1.4. Terminal XXI on a congestion Scenario

Such a Scenario might take place in either 8.1.2 or 8.1.3 variants, and basically would consist of EN

2) level (II) (congestion at neighbor Valencia and Algeciras competitors), without any major

extension to Terminal XXI, such as the proposed Vasco da Gama Terminal, being put into

commercial service. In general, the larger scale of operation of Northern Europe deep-water

container terminals might supplement the Iberian market, putting otherwise a greater pressure on

existing (and congested) conventional Trans-Pyreneean rail links. Such a Scenario would call for a

fast completion of, at least one of the phases (annual 4,5 Millon TEU capacity) of Vasco da Gama

Terminal, hardly feasible before 2020.

Figure 5: Possible development Scenarios for Terminal XXI (2014-2020)

8.2.Horizon 2020-2030

Development of Corridor 16 would experience a new role, with a generalized track gauge

conversion of the conventional rail network (1668mm to 1435mm) in Iberia and Sines Terminal

XXI would have been supplemented by a an extra annual capacity of 9 Million TEUs, offered by

Vasco da Gama Terminal. Valencia port would increase its capacity up to 10 Million TEUs per

year, following its Master Plan, by reclaiming sea land. Basically, there would be Iberian container

terminals, both in Spain and Portugal, matching in magnitude and scale of operation, those located

in Northern Europe. The patterns of World Trade by 2025-30 are difficult to foresee, but a

Transatlantic Free Trade Area would certainly reinforce sea routes on the Atlantic, regardless of the

Panama/Far East variable. Distribution of such traffic by European deep-water container ports

would be far from uniform, and the capacity of a fully interoperable rail network to greatly change

port “hinterland” is not absolute. The Pyrenée “border-effect” would certainly fade (but to what

extent?). Languedoc-Roussillon and Aquitaine Regions of France might become target markets of

Iberian harbours, if only the land distance factor is taken into account.

8.3. Beyond 2030

All deep-water sea container terminals in Iberia, including Sines, would be linked to a conventional

rail network with an enlarged capacity (double track throughout, enabling 750m-long trains without

restrictions) and also without other capacity bottlenecks. The 40 Km-long Central Pyrenée Tunnel,

from Zaragoza to Tarbes would be operative. But, on the other hand, an hypothetical bringing into

use of an underwater Gibraltar Strait Tunnel, with provide a physical rail link to the Tanger Med

Container Terminal to Iberia and mainland Europe. Such effect on the existing hierarchy of

container ports and their respective “hinterland” remains, so far unknown.

9. Conclusions and Further research

Sines Terminal XXI, or broadly, Sines deep-water container port, is susceptible to introduce the

Portuguese territory into a non-negligible share of planetary logistics. The scope to which such

target is achieved is however difficult to determine. The biggest shortcoming of Sines, as a

container harbour lies in its so-far unsolved intermodal and rail accessibility based problem, despite

its very attractive location and also full potential for expansion, provided by available land. Further

research is required on port intermodality (prospective scenarios) using a cost-efficiency approach.

The Comunidad de Madrid (or Greater Madrid) holds an important transatlantic trade with both

Latin America and the USA/Canada, which, in the latter case is a candidate for further development

and growth, with the eventual emergence of an “EURAMERICA” free-trade zone. Logically, being

located within Spain, Algeciras and particularly Valencia sea container terminals are the prime

theoretical beneficiaries of such trade flows. But their limited availability for expansion due to land

scarcity may shift the balance to other ports, such as Sines, if RTE-T Corridor 16 is finally

completed within Portugal and Iberia. A significant need of further research on Sines Terminal XXI

will be necessarily focused on both the development of rail accessibility, particularly within Iberia.

Such an aspect is crucial for a better understanding of the full extent of “hinterland” expansion and

its respective effect on a new logistic hierarchy of the different Iberian Communities and their

respective geo-economic spaces. The nature of exogenous variables determining attractiveness of a

Far East Route via Panama in replacement of an Indic-Suez traditional one for Post Panamax

vessels is complex, without a clear certainty of how fuel prices may evolve on a long-term basis. In

such a case, however, Sines would be better positioned in the Atlantic, relative to its most direct

Iberian competitors.

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