FRANKLIM SPENCER Chairman of Enapor

What are some of the major projects that Enapor is considering at the moment?

We are planning the reorganisation of the Port of Praia, including a cargo village. Up to now, we haven't had the necessary space for stacking all the containers that were necessary. We wish to create a condition where we are using more space, and maximise the space that we have. The new infrastructure will be available in the next three to four years. We also have a technical project for the maritime extension, for this we are looking at execution by the end of this year, beginning of next, and we should be finished by the end of 2006, start of 2007. The whole maritime extension should be finished by the end of 2008. This will make of the port of Praia one of the ports with the best infrastructure in this area. It will be better than all of the ports, it will be close to the port of Las Palmas.

There are also many other projects that Enapor is looking at, such as the roll-on roll-off ferry project, the extension of the free zones, a deep-water port. How will all of these projects fit into the expansion plans?

The cargo village will be a new area, showing a new approach to the management of the port. The cargo village will be available to all operators; Enapor will be creating some commissions for these operators. The basic idea around these projects is to use the valuable space around the ports to allow all the operators, importers and exporters to use the village as a main area to ship goods. We also wish to differentiate our logistic activities between the port and the airport, where the operators can receive the cargo by boat and deliver them by air, to bring down the shipping costs. We wish to modernize the entire infrastructure. The port of Praia is currently receiving ro-ro [roll-on / roll-off] ships in bad condition, so we will modernize the ships and construct in the next few months a ro-ro ramp in Praia with local financing, where we are in discussion with the local government to sign the execution of the works. During the technical design of the new expansion, the port will be made up of two maritime areas. All of the ro-ro activities and passenger traffic will move to Santa Maria and all the cargo will move to San Antao.

We are in discussion now because our basic idea is to set a quay in Santa Maria around 180 to 200 meters for the cruise ships, with another quay around 150 meters for the ro-ro ships, and another around 100-120 meters for the catamaran ships. We also plan to create a marina not too far from that area, to support the current initiatives to promote tourism in the area with casinos and other tourist attractions. This way, the tourists that come on the cruise ships can move between the islands, they can go to Praia, they can go to other islands. We are in discussion with the Cape Verdean Investment Agency, because they are in negotiation discussion with the casino projects. From our point of view, these two projects are complementary, and not against one another. In fact, the investor that is considering the casino project is also interested in having a marina close by. We are discussing this with a very strong investor from Macau.

Another item of discussion is the privatisation campaign currently being led by the government. You mentioned that Enapor is already partnering with private institutions for some activities of the ports, what can you tell our readers about the privatisation campaign.

Since 1993, Enapor has had an active participation in the institutional framework. From our side, it does represent a new approach for the management of the port. The basic idea is to create all the services for the port operators of the three main ports, which from our point of view is attractive for the private investor. The remaining ports can also present advantages for private investors over the next three to five years as we proceed with the modernisation of these ports. All of the projects and the preparation of the products have been done. The basic idea is to gather all of the information relative to the all of the ports, gather all of the private investors interested in participating in these projects, and Enapor will organise seminars for them. We will then make an open tender. Enapor has been preparing since 2002 for this privatisation. Enapor is actually a holding company that regroups all of the different ports acting as separate companies. In this port, you also have the corporate services that make the consolidation. The short-term management is done by the different managers of the different ports. For the smaller ports, we have here an office that follows them to give them support. But the three main ports operate completely independently. Our budget is made separately and then consolidated; our balance sheet is also consolidated. From a professional perspective it is not very easy, but it is very interesting and challenging to manage to all of these projects simultaneously, and consolidate all of the activities.

As we discussed, the ports of Cape Verde play a key role in attracting investment to the country. Could you share with our readers where most of you investment is coming from, from where you would like to see more coming? In light of strengthening ties with the EU, are you looking to strengthen ties with the Europe?

Here, we have the public investment and the private investment. For infrastructure, we mostly use public investment that the government obtains from development partners. Right now, the leading developments that we are seeing in the ports are thanks to the Millennium Challenge. The port of Palmeira expansion is currently being discussed with the European Investment Bank. There is also room for private investors who which to participate in the financing of the development of the infrastructure. We are open for PPM (Public-Private Management), and we are trying to interest some private partners in participating in the financial support. We are currently considering two or three alternatives for some of our ports that do not require such important investment. For example, the Porto Novo project requires maybe 10-12 million dollars, the Sal Rey is around 15 million, and Porto Valehro is about 8-10 million dollars. There, the private investors can be part of the financing of the projects. We are also in discussion with a company in the Netherlands who are proposing some financial investment for development, but the conditions of the financing is key.

The other project we have is the trans-shipment terminal here in Mindelo, the container terminal that is open mainly to private investors, but the government will be responsible for the first phase of this, where we are talking about around 100 million dollars. We have already found private investors for a round 100-120 million dollars although we have not even started the project. We needed to market the project and go to the different operators. We have some proposals for the trans-shipment; it is on the table. We have one proposal from one of the biggest shipping operators; we are waiting for them to come back to us. We are also in discussion with another group where we are at the beginning. We also have another project with a group from the United States, where they are the beginning, making feasibility studies, it is in the preliminary stages. We should be looking at November or December for the beginning of the trans-shipment project.

We also have a very interesting project for the remodelling of the port here in Mindelo, which represents around 20 million Euros. The master plan is done, it would be just to remove all of these workshops here, and set up a new building for the offices, which is a project where we are calling for private investors.

One of the key factors to attract investment is the issue of safety, which is something that Enapor prides itself on. What can you tell the readers of the International Herald Tribune with regards to the new and improved safety measures that Enapor is currently looking at?

We are now in the process of implementing video-camera surveillance for the three main ports, and the execution of this should be finished by October / November. Also, all of the access control to the restricted area will be supported by new monitoring equipment. We will also upgrade the management of all these systems, which will be centralised with the equipment and the computer systems. We are also in discussion with a British consortium, we have an agreement with them, and we should finish the concession agreement by July. We should have the whole system working by the beginning of next year. We are just in the process of finalising the financing package, after that it is just a matter of signing the concession agreement and to buy the equipment and set it up. We should be finished all of the negotiations by August, and the execution will follow by September. Seeing as our traffic is not as large in comparison, we must carefully look at the costs. The government may support us partly.

There is a clear parallel to be drawn between trajectory of Cape Verde and Enapor. Both have grown exponentially and both are now in a situation where the possibilities are numerous. What do you see as the next challenges for Enapor? How do you plan to personally address the coming challenges?

The next deadline for us is to have the new ports, with new logistical areas, with different services that are cost-efficient. We wish to start with the construction of the trans-shipment container terminal. These are really the biggest challenges, to set up an international trans-shipment port here. This is the most important, because the country itself stands to make the main gains from this project. The final course of these different projects will depend on this year's freight transportation. If we are successful in these projects, I can guarantee you that over the next 5-10 years, the cost of sea transport will be reduced by 30, 40, 50%. Now, the transportation is done by container ships with a capacity of between 300 and 500 boxes, and once the project is operative, will be looking at 1200 to 200 boxes. The cost of sea transportation is directly related to the capacity of the ships. For example, one of the constraints that we have here is the cost of the services that we provide for tourists. That is because around 90% of the goods that we provide to tourists is imported. Therefore, with the new port, the construction costs of the new hotels will be greatly reduced. It will be a tremendous success, it will allow to connect Cape Verde with the entire world. We will get the global shipping companies, the global transport companies, the global logistics companies calling to Cape Verde, whereas now we only have the Portuguese companies which do not provide the complete logistics chain. We are currently in discussion with the biggest shipping companies and the biggest port operators to be involved and to invest in this international trans-shipment container terminal in Mindelo. This really is our biggest challenge at the moment.