China’s COSCO JV with PTP Approved to Redevelop Spain’s Tarragona Port
A newly formed joint venture between divisions of China COSCO and a Spanish company, PTP, was approved for a new concession and redevelopment of the Spanish Port of Tarragona. The deal, which includes a 50-year concession for port operations, comes as there is increasing scrutiny on Chinese efforts to expand global port operations.
Under the terms that were approved by the board of the Port Authority of Tarragona, the new JV will invest €116 million ($135 million) to redevelop the port, including a massive new terminal. The port authority justifies the 50-year concession, highlighting that the financial investment is far larger than envisioned in the plans for the port.
COSCO Shipping Ports and COSCO Bulk will form a company to hold 51 percent of the JV. The remaining 49 percent will be held by PTP Iberica, a Spanish subsidiary of the Argentine PTP Group. The awarding of the concession still requires the formation of the new operating company and the formalization of contracts following Spanish legislation.
The Port Authority says the plan will help the Port of Tarragona, which is located on the Mediterranean in northern Spain near Barcelona, to consolidate its strategic position. They predict that the port will develop as a regional logistics center in the Mediterranean, connected to both main international maritime routes, the Iberian Peninsula, and Europe’s inland centers.
“Not only are we recovering the container and expanding the general cargo and the movement of vehicles, but we will become one of the reference gateways in the Mediterranean for both traffic coming from China and the Far East and Latin America,” predicted the president of Port Tarragona, Santiago J. Castellà. He called the agreement “a historic moment for the Port.”
The concession includes over 510,000 square meters of area, which is the entire space available for the concession plus another 58,000 square meters belonging to the La Boella railway terminal. The plan calls for the development of a multipurpose terminal to handle containers, general merchandise, vehicles, and cold chain logistics, as well as auxiliary facilities and a maneuvering area.
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The maximum capacity is estimated at 680,000 TEU equivalents, including both containers and general cargo. According to the business plan, they will grow traffic between 2027 and 2033 with a commitment to a minimum of 360,000 TEU equivalents starting in 2031. The majority must be containers with a minimum of 200,000 TEU annually, and the additional volume will come from general cargo.
Some political questions have been raised in Spain about awarding a long-term concession to a Chinese state company, but so far, it has not faced major opposition. This, however, comes as the sale of CK Hutchison’s global port terminal operations remains in question and political challenges continue in Panama. China’s development of the large Port of Chancay in Peru. COSCO is reported to have invested $1.3 billion in the port’s development, which was seen as a foothold in South America. It has created legal and political controversy in Peru, while the Trump administration continues to challenge China’s growing influence in global ports and port infrastructure, such as its dominance in large cargo cranes.
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