ENVESTORS magazine preview

In the UK we tend to take our railway system for granted.  We all complain about delays, strikes and the wrong type of leaf, but ultimately it is not only the oldest in the world – the first locomotive-hauled public railway opened in 1825 – it also forms the backbone of our economic stability.  A record 22.7 billion net tonne kilometres (freight weight multiplied by distance carried) of cargo movement was recorded in 2013-4 and this figure rises steadily year on year.  Now imagine a country with thousands of kilometres of railways, disused (with the exception of a tourist route and two short sections of track operated by private coalmining companies) where bad public policies that favoured road over rail transport condemned train operations to the point it closed down the trains.  Welcome to 1990’s Colombia.

‘The Colombian railway system was built in the 1850’s,’ explains Leonardo Suarez, co-founder of HOLTRADE ATLANTICO. ‘It was one of the first to be built in South America and people would travel for miles to admire it.  However, by the end of the 20th century it had all but died out; it was only in 2011, when our former president recognised how beneficial the reintroduction of the railways could be to Colombia, that the process of rebuilding them could begin.  He travelled to the UK and received overwhelming support from the British Government.  This ongoing backing has resulted in a large grant from the FCO’s Prosperity Fund and visits to Colombia in 2014 by Nick Clegg – at a dedicated event hosted by HOLDTRADE ATLANTICO – and Prince Charles.’

Leonardo is an Anglo-Colombian civil engineer who has lived in the UK since 2005 and has had a lifelong passion for trains.  ‘The inadequacy of the roads in Colombia cannot be overdramatised.  It took almost 15 years of fragmented negotiations for the Revolutionary Armed Forces of Colombia (FARC) and the Colombian Government to sign the agreement that ended the longest and bloodiest insurgency the modern world has ever seen; hence, physical infrastructure has long suffered from chronic under-investment in rural areas. The accident mortality rates are among the highest in the world and, notwithstanding the congestion, the cost of transporting freight by road is astronomical, mainly due to the lack of infrastructure.  It costs the same to transport a container from Bogotá to Santa Marta – a distance of under 1,000 km – as it does from Santa Marta to Shanghai (16,000 km apart).  It is an absurd situation and we are delighted to be at the forefront of the reconstruction of the vital railway infrastructure that will bring immeasurable benefits to all sectors of the Colombian economy’.

HOLDTRADE ATLANTICO was founded in 2013 and culminates in the association of three expert businesses in rail and logistics:  Iowa Pacific Holdings, a US operator of freight and passenger trains in both North America and the UK and OPL Carga, a Colombian leader in integrated logistics and transport services that already transports approximately 4.8m tonnes per year in Colombia.  The third member of this triumvirate is GREENWICH RAILWAYS LTD, the majority shareholder and a UK based holding company formed by the directors of the company and HOLDTRADE (UK) LTD, a company that has provided industrial railways solutions over 20 years in Africa, Asia and Latin America and created for the purpose of raising investment from the UK.

‘Our vision is to become the first freight railway company in Colombia’, continues Leonardo.  ‘We will carry out this operation, within a framework of social responsibility and strict compliance with the law, in a way that will complement other modes of transport and therefore benefit shareholders, suppliers, employees, customers and the entire community.  This will, in turn, contribute to Colombia’s competitiveness.

The role of HOLDTRADE ATLANTICO will be that of Train Operator and our international team will bring their wealth of experience from providing profitable train operations in North America and Europe.  We are starting the process with the 767km long government owned track, between the port of Santa Marta and La Dorada.  We ran a successful trial train in 2016 and we already have the track access contracts in place.  This track has recently been refurbished by the Colombian Government and runs along the main transportation axis of the country where 90% of the GDP is generated.  OPL are a particularly critical partner as they are longstanding experts in this field: we did not have to learn the intricacies as they already knew them all!  Now we can focus on what is important to provide a secure and steady business operation and therefore revenue stream: the capital investment for the business, i.e. freight locomotives and wagons that will transport the cargo.  Colombia is desperate for this system and we are just delighted to be able to provide it.  When Colombia decided to revive train operations, they turned to the UK because the country is the world expert when it comes to railways. The full support of the British Government has cemented our belief that there is true collaboration and respect between our nations’.

‘Our investment in HOLDTRADE ALTANTICO was strategic for OPL.  Rail transportation complements our portfolio and has been part of our vision for transportation in Colombia.  OPL is a company leader in integrated logistics services and this project has all the synergies to manage the cargo of our customers’. Javier Enrique Prada Sanchez, General Manager, OPL CARGA

GREENWICH RAILWAYS is now seeking funding that will give investors the option to acquire shares in HOLDTRADE ATLANTICO.  With a target market that is worth approximately USD $5bn a year and a business model that will derive its income from the train operation segment of the freight logistic chain, it would seem quite “loco” to not spot this opportunity. (discúlpame)

This post was created on October 19 2018 by Victoria Maby