Tenerife Shipyards Face €115 Million Annual Loss Due to Granadilla Port Delays

The financial impact on Tenerife Shipyards is substantial, as they are unable to proceed with the construction of a large shipyard at Granadilla Port, resulting in an estimated loss of at least €115.2 million each year. Mario Suárez, the business director of the Hidramar Group, which oversees the shipyards, has voiced concerns regarding the Port Authority of Tenerife’s decision to postpone their request for an expansion from 40,000 square meters to 250,000 square meters. This expansion was crucial for establishing a shipyard capable of enhancing Tenerife’s position in naval repairs within the Canary Islands.

Significant Project Delays

Despite the setbacks, Tenerife Shipyards remains committed to the project. However, Suárez has indicated that the postponement means they will have to restart the process, pushing the timeline back by at least two to three years. The original plan included the construction of nine docking lanes specifically designed for Panamax vessels, which measure 230 meters in length and 32.5 meters in width. Currently, the Canary Islands can only accommodate ships up to 180 meters long and 10,000 tonnes at the Astican shipyards in Gran Canaria. The proposed syncrolift at Granadilla would allow for vessels weighing up to 25,000 tonnes.

Challenges at Granadilla Port

The decision to delay the expansion has been a significant setback for the shipyards. According to Suárez, the ongoing delays at Granadilla Port are primarily due to unfinished essential works, including the quayside closure, land reclamation, and road network development. He explained that the port law stipulates that if there is insufficient available space or if less than two years remain until space becomes available, expansion requests cannot be approved. The necessary quay for construction has not yet been completed, and the contract for this work has not even been awarded, leading to the denial of the expansion request. Each year that the shipyard remains unexecuted translates into financial losses for the Hidramar Group.

Financial Implications of the Delay

Suárez estimates that even with only six of the planned nine docking lanes operational, the shipyard could generate between €9 million and €11 million in monthly revenue, based on an average of two ships per lane each month, with docking fees ranging from €800,000 to €900,000. This translates to annual losses between €115 million and €130 million. Additionally, the delay represents a lost initial investment of approximately €100 million in the port, which could escalate to €200 million upon the project’s completion.

Long Wait for Development

The ambitious plan, which has now been stalled, was initially announced in 2022 but had been in development by the Hidramar Group for several years prior. They had won a tender to utilize just over 40,000 square meters for the construction of a floating naval repair dock. However, the execution of this concession faced years of delays due to the area being occupied by an abandoned floating dock belonging to Palumbo, which was finally relocated in 2022 and removed in December 2023. Following the acquisition of the initial space, the Hidramar Group sought to expand to 250,000 square meters to accommodate a more comprehensive shipyard.

Bureaucratic Hurdles Impacting Industry Growth

Suárez has expressed frustration over the bureaucratic delays that are stifling the growth of an innovative industry that could significantly contribute to economic diversification and reindustrialization in southern Tenerife. Currently, Tenerife Shipyards is still awaiting a building license for their initial concession of 40,000 square meters. Suárez emphasized the strategic location of the Canary Islands, which serve as a transit point for numerous vessels heading to America, northern Europe, or Africa. Many of these ships cannot be serviced in the Canary Islands due to size limitations, highlighting the potential market that remains untapped.

Key points

• Tenerife Shipyards face an estimated annual loss of at least €115.2 million due to delays at Granadilla Port.
• The expansion request from 40,000 to 250,000 square meters has been shelved by the Port Authority of Tenerife.
• The proposed shipyard would include nine docking lanes for Panamax vessels, significantly increasing capacity.
• Current docking facilities in the Canary Islands can only accommodate ships up to 180 meters long and 10,000 tonnes.
• Delays are attributed to unfinished essential works at Granadilla Port, including quayside and land reclamation.
• Even with limited operations, the shipyard could generate up to €11 million monthly in revenue.
• The project has faced years of delays due to bureaucratic processes and previous dock occupancy issues.