REGIONAL IMPACT OF PORT AND TRANSPORT POLICIES - THE ECUADOR CASE - by EDGARDO RAUL DERBES Architect, National University of Buenos Aires (1960) SUBMITTED INPARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREES OF MASTER IN CITY.PLANNING AND MASTER OF SCIENCE at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY December, 1971 (Le Fi7\ t Signature of Author . Certified by. .. Thesis Supervisor Certified by .. /epartfi9 of Oceati Engineering, Thesis Reader Accepted by .............. ............ Chairman, Departmental Committee on Graduate Students Archivesi FEB 18 1972 LIBRARIt REGIONAL IMPACT OF PORT AND TRANSPORT POLICIES -THE ECUADOR CASE- 2 by Edgardo Raul Derbes Submitted to the Department of Urban Studies and Planning and the De- partment of Ocean Engineering on December 19, 1971, in partial fulfill- ment of the requirements for the degrees of Master of City Planning and Master of Science. This thesis has focused on appraisal of the impact on the develop- ment of Ecuador of a set of transport policies already under way or pro- posed. Decisions about port development and the interplay of ports with the rest of the transport system influence other transport modes and pro- mote the evolution of a set of locational advantages for certain areas. Consequently, for developing countries located on the seaboard, the role of ports can be a crucial factor in determining their geographic develop- ment. This study has been directed toward developing a comparative static model for testing the interaction of independent submodels dealing with the production of goods, highway operating costs, inland waterways, and coastal operations, interface operations, the overseas transportation subsystem and government policies in these areas. Through this model, the behavior of commodity flows has been simulated in the context of the Ecuadorian situation, selected as a case study. Successive "packages" of parameters constituting the combination of policies proposed or under way have been tested to appraise their comprehensive interplay in national development. The conclusions reached fall into two categories: the first deals with the physical extent of port hinterlands and with transport costs generated by each "package" of parameters. The second category supplies helpful insights for long-range planning at the national or regional level. The study indicates that Guayaquil will remain the major port of the country, but that over the next decade implementation of the in- tegrated coastal barge system, proposed herein for interconnecting the existing ports, would lead to a modest over-all reduction of transport costs and facilitate development of outlying regions of the country. A more balanced distribution of inland flows toward ports, as well as a reduction in requirements for foreign exchange might be rated as ad- ditional advantages. Thesis Supervisor: William W. Seifert Title: Professor of Electrical Engineering and Professor of Engineering in Civil Engineering Acknowledgments To my wife Blanca whose love and integrity has supported me to overcome three years of persistent adversity. To Prof. William W. Seifert, my thesis supervisor, whose advice, encouragement and personal trust deserves my gratitude. Also I wish to thank the following people for their helpful comments and assistance in certain topics of the study: Prof. Franz Frish, Messrs. Luis Escobar, Manuel Martinez, Jorge Mendiguren, Pat O'Malley and Alberto Rivas. This study was supported in part by a Ford Foundation grant and by the C.N.I.C.T. of Argentina. Finally, I thank Mrs. Eski Fisher and Miss Barbara Barnes for their patient collaboration in editing and typing this thesis. TABLE OF CONTENTS CHAPTER I Page 1.1 Foreward 14 1.2 The Ecuadorian Case 20 1.2.1 Background 21 1.2.2 Future Trends of Economic Development 26 1.2.3 Transport Planning in the Present 27 Situation 1.3 Objectives and Scope 41 1.3.1 Nature and Selection of Commodities 42 1.3.2 Sea Transportation Scheme 43 1.3.3 Influence of Policies 47 1.3.3.1 Port Pricing Policies 47 1.3.3.2 Location of Specialized Facilities 48 1.3.3.3 Enhancement of Port Accessibility 48 1.3.3.4 Custom Policies 48 1.4 Scope 49 CHAPTER II 2.1 General 2.2 Structure of the Model 2.2.1 Part 1 - Internodal Trade 2.2.2 Part 2 - Governmental Policies 2.2.3 Part 3 - Highway and User Cost Submodel 5 2.2.3.1 Simulation Structure 84 2.2.3.2 Operating Costs 85 2.2.3.3 Vehicle Performance Cost 86 2.2.3.4 Data Input and Assumptions 89 2.2.3.5 The Highway-Submodel User Cost and 89 the Assignment of Standard Costs to Different Links of the Ecuadorian Network 2.2.3.6 Operating Ratio and Gross Income 95 Estimates 2.2.3.7 Vehicle Characteristics 95 2.2.3.8 Traffic Demand 101 2.2.4 Part 4 - The Railway System 108 2.2.5 Part 5 - The Interface Submodel 109 2.2.5.1 Conceptual Approach of the Model 109 2.2.5.2 Operational Networks and Independent 115 Commodity Sets 2.2.5.3 The Model 116 2.2.5.4 Ecuador Ports and Data Input 126 2.2.6 Part 6 - Overseas Transportation, Ocean 144 Going Fleet 2.2.6.1 General Approach 144 2.2.6.2 The National Banana Fleet 148 2.2.6.3 General Cargo Fleet 153 2.2.7 Part 7 - Coastal and Waterways Submodel 159 2.2.7.1 The Inland Waterway System 159 2.2.7.2 The Coastal Barge Feeder System 160 CHAPTER III 3.1 The Network Model 180 3.1.1 Problem Formulation 182 3.2 Data Input for the Model 185 3.2.1 Commodity Supply and Demand 185 3.2.2 Highway Transport Costs 186 3.2.3 Interface Cost Operation 193 3.2.4 Coastal and Inland Waterways Systems 199 3.2.5 Oceangoing Transport Costs 199 CHAPTER IV 4.1 Commodity Flow Simulation 203 4.2 Presentation of Results from Computer 205 Models 4.2.1 Extent of Port Hinterlands Under 205 Environment Condition 1 4.2.2 Extent of Port Hinterlands Under 208 Environment Condition 2 4.2.3 Extent of Port Hinterlands Under 212 Environment Condition 3 4.2.4 Extent of Port Hinterlands Under 215 Environment Condition 4 7 4.2.5 Extent of Port Hinterlands Under 220 Environment Condition 5 4.2.6 Extent of Port Hinterlands Under 223 Environment Condition 6 4.2.7 Extent of Port Hinterlands Under 227 Environment Condition 7 4.2.8 Extent of Port Hinterlands Under 229 Environment Condition 8 4.2.9 Extent of Port Hinterlands Under 23:3 Environment Condition 9 4.2.10 Extent of Port Hinterlands for 237 Imported Commodities 4.2.10.1 Extent of Port Hinterlands for 237 Imported Commodities, Environment Condition 1 4.2.10.2 Extent of Port Hinterlands for 238 Imported Commodities, Environment Condition 2 CHAPTER V 5.1 Findings 254 5.2 Some Conclusions with Respect to National 256 Port Policies, Transport and Economic Space 5.2.1 Development of a Unique Ocean 256 Terminal 5.2.2 Development of a System of 261 Regional Ports 5.2.2.1 For the Period 1973-1983 262 5.2.2.2 For 1983 and Beyond 268 CHAPTER VI 6.1 Tentative Overview and Recommendations 277 6.1.1 The Guayaquil and Quito Core Regions 277 6.1.2 The Resource Frontier Regions in the 277 Costa and Oriente 6.2 The Integrated Coastal Feeder System 279 6.3 Ocean and Inland Ports 280 6.4 The Sea Transportation Scheme 282 6.5 The Highway System 283 6.6 The Intermediate Urban Centers 284 Appendix I 285 Appendix II 289 Appendix III 310 Appendix IV 323 References 327 LIST OF TABLES Page 1. Registered Motor Vehicles in Ecuador Per Region 30 and Year 2. Projected Demand of Motor Vehicles and Actual 31 Demand 3. Export-Import Movement per Port Year 1962 37 4. Export-Import Movement per Port year 1966 38 5. Import Permits according to the Use or Economic 44 Distribution of Goods 6. Main Exports of Ecuador, Principal Articles 45 7. Productive Units, Acreage and Production per 61 Provinces in Ecuador 8. Location of the Banana Production and Exporting 62 Flows toward Port Cities 9. Geographic Distribution of Coffee Production and 67 Export Tonnage for the Year 1968 and Projection for 1983 10. Geographic Distribution of Cocoa Production and 73 Export Tonnage for the Year 1968 and Projection for 1983 11. Recommended Geometric Highway Design Standards 90 12. Estimated Freight Distribution by Corridors and 105 by Highways 13. Estimated Annual ton/km per Corridor and Average 106 Truck Demand for the Year 1973 14. Estimated Vehicle Inventory of Ecuador Broken down 107 by Vehicle Type, Year 1967 15. Estimated Average Number of Vehicles per Day per 107 Corridor, Year 1973 16. Interface Model, Technological and Cost Character- 143 istics for Several Interface Facilities 17. Banana Exports by Destination, by Continents, 152 Regions or Economic Areas 18. Coffee and Cocoa Export Permits by Continents, 158 Regions, Economic Areas 19. Export Commodity Supply per Provinces and Nodes, 189 Bananas and Coffee and Cocoa 20. Operating Vehicle Costs, for an 8.9 Long-ton Truck 192 21. Interface Operation Costs 195 22. Estimated Flows Toward Port Cities and Exporting 244 Annual Tonnages 23. Daily Maximum Flow Capacity in Roads 253 LIST OF FIGURES Page 1. Traffic Tendencies into the Ecuadorian State 33 Railroads 2. Ecuador's National Railroad System Income, 35 Expenditures and Deficit of Operation 3. Model's Flow Chart 56 4. Transfer Process, One Mode 111 5. Transfer Process, Two Modes 113 6. A Bimodal Interface Facility 114 7. Estimated Construction Costs for Oceangoing 170 Barges 8.