Colombia’s economy experienced a boom over the last decade, with per-capita GDP more than doubling and foreign direct investment growing tenfold. Infrastructure and transport development, however, has been struggling to keep pace with the country’s rapidly expanding economy.

Public investment in infrastructure currently makes up just 1.3% of GDP, below that of Colombia’s Latin American peers. The low public investment in the sector coupled with the country’s difficult geography has resulted in time-consuming journeys, and high transport and logistical costs. Moving a tonne of cargo from China to the country’s northern port of Cartagena, for example, can cost as much as from Cartagena to the capital city of Bogotá. However, in recent years a series of policies aimed at increasing investment in the development and expansion of roads, airports and seaports have been announced. Enhancing transport operations is expected to have a positive trickle-down effect throughout the economy by boosting competitiveness and creating more jobs. The transport sector’s contribution to GDP increased from 8.9% in 2001 to 11.3% as of 2014, according to figures published by the National Administrative Department of Statistics. Additionally, the transport sector is the third-largest sector as a source of new employment and currently accounts for 8.5% of the workforce.

Improving Conditions

Multi-modal transport is an area where structural improvements and better integration could help push costs downwards. Logistical costs represent an average of 15% of sales for Colombian companies, negatively impacting firms’ The transport sector is the third-largest sector as a source of new employment and employs 8.5% of the workforce ability to compete internationally and extend their reach across foreign markets.

According to the World Bank’s “Doing Business 2017” report, which compares operational costs for firms across economies, Colombia was ranked 121st out of 190 countries for ease of trade across borders, three spots lower than its 2016 ranking and well below its nearest regional competitors. By contrast, neighbouring Ecuador ranked 97th, Peru 86th, Mexico 61st and Panama 53rd in ease of trade across borders.

Challenging Terrain

The country’s mountainous terrain and large distances between the main cities in the hinterland and the ports on the northern and western coasts have hindered the development of Colombia’s transport and logistical infrastructure. As a result, the domestic transport cost to export a container through the Port of Cartagena can be as high as $1525 and take a total of 44 hours, according to the World Bank. By comparison, in Panama exporting a container through the Port of Manzanillo will cost $390 in domestic transport costs and take approximately one hour. Similarly, Ecuadorian exporters can reach the Port of Guayaquil by paying an average of $675 for a journey that lasts around eight hours.

Although the distance between its major cities and its ports will remain a challenge in the short and medium terms, building better road links would lessen these costs. “Colombia has a last-mile dilemma,” Nelson López, country director at Epypsa Colombia, told OBG. “The country is working to ease the movement of people and goods from transport hubs to a final destination.”

Strengthened multi-modal transport could balance the current system, which relies largely on road transportation. According to a study by Colombia’s National Department of Planning (Departamento Nacional de Planeación, DNP) released in late 2016, roads accounted for 86% of all freight. By comparison, railroads moved 13% of goods in Colombia and around 1% of total cargo was moved through the country’s rivers. A better balance of these modes of transport, in hand with increased investments in the country’s waterways and railroad network, are expected to start bringing transport costs down in the short to medium term.

Road Transport

Trucking is critical for the movement of goods across the country. Lorries transported 139m tonnes of goods in 2016, according to figures from the Colombian Federation of Road Cargo Transporters (Federación Colombiana de Transportadores de Carga por Carretera, Colfecar).

The sector was nonetheless affected by Colombia’s economic slowdown (see Economy chapter). Falling global commodity prices in recent years led to a decrease in exports, impacting trucking companies’ sales and the volume of moved cargo. The steep depreciation of the Colombian peso, which made fuel and spare parts more expensive, further eroded operating margins. Furthermore, worsening economic and social conditions in neighbouring Venezuela, which has historically been one of Colombia’s most prominent trading partners, affected the trucking business after the border was closed and the purchasing power of Venezuelans decreased.

Despite these challenges, Colombia remains dependent on trucking for cargo transport, as was made evident when a 45-day strike by truckers between June and July 2016 resulted in a sharp increase in food prices, clogged ports and reduced exports of the country’s high-quality Arabica coffee. The strike also helped push the 12-month inflation rate to a 16-year high of 9% in July of that year, well above the central bank’s target range of 2-4%.

Performance Issues

Structurally, Colombia’s road transport sector is weighed down by an excess capacity, with over300,000 cargo vehicles on the roads. Juan Carlos Rodríguez, executive president at Colfecar, believes that is around 20,000 vehicles too many, driving down sector revenues. Colombia’s geography and the distance between the country’s ports and its production centres do not lead to an effective use of freight capacity, with trucks delivering to the main cities often having difficulty finding return cargo. “Sometimes it’s not so much the number of vehicles but also the way they are used,” Rodríguez told OBG. To address the utilisation gap, a series of private cargo management platforms have appeared in the Colombian market. The Ministry of Transport (MoT) is also setting up its own freight management platform to improve the use of available capacity in the sector.

Another limitation for transport operators is the increasing congestion in bigger cities. This has led municipal authorities in places like Bogotá, Medellín and Cali to enforce stricter rules for the transit of cargo trucks in urban areas. As a result, companies are forced to use larger fleets of smaller vehicles, which cuts into operational efficiencies. “Of the existing 300,424 transport vehicles operating in Colombia, only about 65,965 are the articulated larger trucks,” Rodríguez explained. “The rest are the rigid, smaller vehicles, which are increasingly needed to transport goods across cities.”

Renovation Project

More stringent regulations on equipment and human resources are set to improve the sector in the medium term. Transport authorities have prioritised fleet renovation, as 24.28% of the existing 300,424 cargo vehicles are over 20 years old. Plans to renovate fleets, however, have not moved as fast as initially expected. A substitution programme was implemented by the MoT in 2005 but only absorbed about 23,500 vehicles, according to figures by Colfecar. “There have been some delays because the Ministry of Finance has to pay for the substitution,” Rodríguez told OBG.

Transport authorities are also looking to formalise the sector. According to the MoT, although there are over 3000 companies with the necessary license to operate in the sector, only around 1800 trucking companies were reporting their activity to the government. Developing better regulations is key to formalisation and is expected to improve conditions for transporters and equipment over the long term. For example, the 2010-14 National Development Plan contained measures such as the establishment of minimum capital requirements for road transport companies.

Road Expansion

Operators expect that better infrastructure will have a positive trickle-down effect on the transport and logistics sectors overall. Much of the large-scale investments in transport infrastructure have been concentrated on the country’s road networks. Efforts are paying off; a total of 18.6% of roads in Colombia were paved in 2015, up from 12.5% in 2005, according to the National Association of Financial Institutions, a Colombian economic policy advisory group.

Private and public investment in road development has been channelled through a series of investment packages since the 1990s. Currently under implementation is the fourth generation (4G) road programme, which will expand the country’s road network by 45 new highways, adding 5800 km of newly paved roads. According to initial estimates, the programme will bring in $24bn in new investments, not only for new road links but also the renovation of existing stretches of road and the construction of tunnels.

Domestic and international banks, as well as international finance organisations, are providing financing for the endeavour. According to the National Agency of Infrastructure (Agencia Nacional de Infraestructura, ANI), several Colombian and foreign institutions have invested in the project, including $50m in direct financing from the International Finance Corporation (IFC) and a $70m IFC equity investment in the Fondo de Desarrollo Nacional, Colombia’s infrastructure development bank. The ANI also approved investments of COP2.36trn ($708m) from US investment bank Goldman Sachs, COP2.38trn ($714m) from local bank Davivienda, COP2.36trn from Bancolombia, COP2.34trn ($702m) from Japanese Sumitomo Mitusi and COP2.25trn ($675m) from Banco de Bogotá. “Due to the size of the investments that will be necessary, we need the participation of the international banking institutions for financing for some of the projects,” César Augusto Peñaloza Pabón, director for infrastructure and sustainable energy at the DNP, told OBG.

Authorities envisioned projects in the 4G programme would largely be carried out as public-private partnerships (PPPs), but due to financing difficulties related to the country’s overall economic situation authorities are looking to incentivise exclusively private initiative projects (see analysis). Despite some complications related to financing, several road projects are advancing.

In November 2015 construction began on the 185-km Girardot-to-Puerto Salgar Corridor, a project set to cost $757m. It will be split into two phases: the first will include work on the Bolombolo-La Pintada highway, and the second on the La Pintada-La Primavera highway. Late 2015 also saw work start on the Conexión Pacifico 3, which will extend for 146 km and require a total investment of up to $967m. In May 2016 work started on the Girardot-Ibagué-Cajamarca road project, a 35-km road link that is estimated to cost $425m.

Future Ambitions

With the 4G programme in its initial stages of financial closure and construction, authorities have underscored the need to make further investments in the transport sector. Much of this will be done through the government’s Master Plan for Intermodal Transport (Plan Maestro de Transporte Intermodal, PMTI), which aims to upgrade and build road and rail links and expand airport and port capacity.

The plan allocates an extra COP$208trn ($62.4bn) on top of funds earmarked for the 4G programme towards transport infrastructure over a 20-year period between 2015 and 2035. This will include COP$182trn ($54.6bn) for up to 20,000 km of roads and highways, COP$16trn ($4.8bn) towards 31 airports and COP$10trn ($3bn) to rehabilitate railway networks in the country. Additionally, as much as COP$8.8trn ($2.6bn) will be used to expand river infrastructure to move freight and passengers.

The ongoing implementation of the peace agreement between the Colombian government and FARC will also serve to galvanise transport projects. Authorities are currently looking to improve social and public services infrastructure in the previously ungoverned areas of the country.

Regional transport links alone will require up to COP40trn ($12bn) in investment, according to figures released by the DNP. “This level of investment is comparable to that of the whole 4G road programme, so it is a big commitment,” Peñaloza Pabón told OBG. “Most of it will come from the national budget, but part of the initiative will also be financed by international contributions.”


Unlike road transport, rail cargo remains limited in both scope and volume. According to 2016 figures by the DNP, railroad transport carried 13% of the country’s freight in terms of tonnage, but 99.5% of that is coal shipments. This situation has been partly caused by underinvestment. Railway infrastructure received a mere 1.3% of all public investment into the transport sector, compared to 82.2% in roads and 10% in air transport. Out of a network of 3530 km of railways only 1680 km were operational in 2015, according to the MoT. Colombian railways moved 47.7m tonnes in 2015, down from 76.7m tonnes in 2012.

Reduced rail movement volume reflects the fact much of what the railways transport is coal, with coal output declining by 3.5%, from 88.5m tonnes in 2014 to 85.5m tonnes in 2015 due to the border closure with Venezuela and court-ordered transport restrictions. The PMTI will add 1800 km of railway lines for a total investment of COP$10trn ($3bn) through to 2035 in order to develop the sector.

Urban Rail Transport

Much of the large-scale investment into railroads will be focused on the development of mass transit systems. After years of delays and uncertainty over costs and execution, authorities have committed to building the capital’s first metro line, with construction starting in 2018. In late 2016 President Juan Manuel Santos said the central government would support the municipality of Bogotá in the development of its mass transit network, as had previously been done with a project to build a metro in Medellín, Colombia’s second-largest city. According to Santos, the central government will finance 70% of the cost of the project, with municipal authorities responsible for coming up with the remaining 30%.

Metro Project

The first metro line will span 25.3 km and be built in three stages. The first two stages will connect Portal Americas to Avenida Caracas, and the third stage will connect to Autopista Norte. Authorities estimate the metro will save 310,000 hours of transit time in the city per workday.

The initial design and engineering contract for the project was awarded to a consortium composed of French engineering company Systra and Colombia’s Ingetec. According to the DNP, Bogotá’s first metro line will have a total of 24 stations, 15 of which will be part of the first phase of construction. The metro will be constructed on an elevated platform after initial studies by Systra found it would be $61m cheaper to build the line above ground, and operational costs of an elevated metro would be 28% lower than underground. The new metro line will be tendered as a public works project and the stations will be built under PPP agreements. “This is a new way to build a metro line,” Ana Carolina Ramírez Pineda, director for economic affairs at the Colombian Chamber for Infrastructure, told OBG. “But it frees the district of Bogotá from the high maintenance costs of the metro stations,” she added. The full cost and execution, however, remain unclear. The central government made COP$9trn ($2.7bn) available for the new mass transit system, but construction of an elevated line across the capital will be far from easy. “Bogotá has some subterranean issues which make it a complex project,” Ramírez Pineda told OBG. “The biggest risk is the need to move water, electricity and gas connections, which are not clearly marked in some cases.”

Ease Of Movement

Other urban transport options will improve conditions for Bogotá’s daily commuters, with authorities aiming to connect 80% of Bogotá’s residents to a mass transit line closer than 1 km from their home by 2030. Federal and regional authorities announced a plan in November 2016 for the centre of the capital to be connected with the surrounding areas of Facatativá, Madrid, Mosquera and Funza through a 41-km light railway line, with a connection to the city’s metro. The project is the result of a PPP initiative proposal and is expected to cost COP$1.6trn ($480m). Municipal authorities expressed their support for the line, as long as it does not require financial support from the city’s budget. The project would also connect central Bogotá with the El Dorado International Airport, as well as the future El Dorado II airport, set to be built in the coming years. Authorities expect that in the first year of operation, the light rail will carry 211,000 passengers a day.

On The River

Authorities and private operators have long wanted to leverage the potential of Colombia’s waterways — once a key transport medium — as a means to lower costs. A study by the DNP published in late 2016 found that using river transportation instead of roads to move a tonne of containerised cargo for most of the way between the Port of Barranquilla and Bogotá would reduce logistical costs by about 70%, from $2600 to $830 for the 1000-km distance.

River Freight

Despite the potential of river transport, the volume of freight moved through Colombian waterways grew only slightly in recent years, reaching 3.5m tonnes in 2015, up from 2.9m tonnes in 2014. The government’s River Transport Master Plan (Plan Maestro Fluvial, PMF), will allocate COP$8.8trn ($2.6bn) of private and public investment to increase navigability of the country’s waterways over the next two decades. Most of it will go towards dredging work in several waterways and expanding docking infrastructure at strategic points to improve connectivity with other transport modes. By 2035 the five main basins are set to transport 19m tonnes yearly. The plan also foresees the number of transported passengers to double, reaching 5m passengers compared to 2.4m in 2015.

Most of the focus on river transport in recent years has gone into improving navigability of the Magdalena River, which extends for 1500 km, linking the Páramo de las Papas in the south of Colombia to the city of Barranquilla, on the northern Caribbean coast. In 2014 Navelena, a joint venture between Colombian firm Valores y Contratos and Brazil’s Odebrecht, won a PPP tender to dredge the waterway and increase navigability. The dredging of Magdalena River would increase cargo capacity fivefold on the 256-km project section to 10m tonnes by 2029, reduce freight costs and help commodities producers and agricultural companies increase exports.

The project hit a snag in April 2017, when authorities scrapped the $861m contract after US authorities charged the Brazilian company with paying $788m in bribes in 12 countries, including Colombia. Luis Fernando Andrade, acting president of Cormagdalena, the government agency in charge of the river, told local press the decision would cause a two-year delay, with a new contract to be tendered in 2018 and work to be completed by 2022.

Despite the delays, authorities recognise the importance of the project. “The Magdalena River project will improve competitiveness for both imports and exports, as well as promote multi-modal transport by easing the link between the Caribbean ports and the hinterland,” Alberto Jiménez Rojas, president at COMPAS, a port operator, told OBG.


In the coasts, privatisation of key infrastructure concentrated capital and management skills in the country’s port operations, with as much as of $2.2bn going into Colombian ports between 2010 and 2015, according to the ANI. Total cargo volumes moved through Colombian ports have matched the country’s increasing commitments towards international trade agreements, moving from 143.7m tonnes in 2010 to 197.1m tonnes in 2015, according to figures by the MoT. Of the 181.3m tonnes of international commerce freight that passed through Colombia in 2015, approximately 138.4m moved through its ports.

In recent years, revamping of infrastructure on the Caribbean and Pacific coasts allowed Colombia’s ports to adapt to the expansion of the Panama Canal. Port of Buenaventura, the country’s main port on the Pacific, is central to these efforts. Annual cargo movements in Buenaventura have been rising rapidly, from 15m tonnes in 2012 to 17.3m tonnes in 2015, and authorities expect the Panama Canal expansion to further increase shipments.

The Sociedad Portuaria Regional de Buenaventura, the company in charge of providing the port with logistics and port services, aims to position Buenaventura as a major trans-shipment centre in the Pacific, and announced in November 2016 that it will invest $80m in new equipment, infrastructure improvements, maintenance and dredging between 2017 and 2019. In March 2017 authorities inaugurated the new $650 Puerto de Aguadulce in Buenaventura, the fifth terminal in the facility, with a focus on coal and industrial exports. The port’s container terminal previously underwent a $136m expansion in 2016, raising annual capacity from 300,000 to 600,000 containers.

On the Caribbean coast, cargo volumes in Cartagena reached 34.5m tonnes in 2015, up from 31.7m the previous year. Authorities at the Port of Cartagena, which has received up to $950m in investment for capacity expansion work over the past decade, are looking to further enhance cargo servicing. The port began servicing post-Panamax ships in June 2016, with port authorities expecting a weekly transit of almost 20 post-Panamax ships starting in 2017. Post-Panamax ships, sometimes called “single-ocean” ships, are longer than the original ships designed to fit within the canals locks, such as super tankers and larger container and passenger ships.

On the Atlantic coast, a new $600m multipurpose port is planned for the Gulf of Urabá in Antioquia in northern Colombia. Construction is expected to begin in 2017 and be completed by 2019, with the port’s container capacity set to be 1.2m twenty-foot equivalent units (TEUs) annually. The new port will service refrigerated container ships, dry bulk cargo, fruit shipments and general cargo.

Over The Sky

With a mountainous geography that has traditionally made it difficult to reach more isolated communities, Colombia developed a network of 202 airports. Twenty of the country’s airports are located in the main urban centres and make up about 90% of air traffic, according to a report by Fedesarrollo, a think tank. Rising incomes and lowering of ticket prices have made Colombians regular customers of air transport. Airlines adapted to growing demand, increasing the number of seats available and updating fleets. The average age of aircraft operating in the Colombian market fell from 15 years in 2005 to close to five years in 2015, according to information by the Colombian Air Transport Association (Asociación del Transporte Areo en Colombia, ATAC). The concession of airport infrastructure channelled public and private financial resources into infrastructure improvements, with airports under concession now accounting for 80% of all air traffic in Colombia.

Rising Competition

Additionally, competition between airlines pushed ticket prices downwards, leading to an 18% reduction in fare prices over the last three years. “Colombia is the second country in the region, behind Brazil, with the lowest tariffs per kilometre per passenger,” Gilberto Salcedo Ribero, executive director at ATAC, told OBG.

Recently, a less favourable economic environment halved growth rates. According to ATAC, passenger volumes in Colombian airports grew by about 5.5% in 2016 to reach 36m, compared to the 10.5% increase registered in 2015. In addition, airlines operating in Colombia have had to deal with high operational costs and taxes. Sector operators also fear that a recent tax reform will price a segment of the population out of air transport.

Air Infrastructure

Work on expanding airport capacity has supported traffic growth across the country, with the government investing heavily to ensure the sector can grow. “Over recent years authorities channelled up to COP3trn ($900m) to air transport facilities. It is mostly for improvements, due to the pressure that a larger number of airlines and the volume of passengers have on the infrastructure,” Salcedo Ribero told OBG.

A $551m expansion project was completed in February 2017 at Bogotá’s El Dorado International Airport, which accounts for 40% of domestic and 75% of international flights. Work focused on extending terminal capacity and runway length, as well as improvements to other buildings. The total area of the airport increased from 52,000 cu metres to 174,000 cu metres, according to media reports. The revamp of the country’s main airport has been imperative to sustain growth in air traffic volumes for the coming years. “El Dorado airport is already nearing full capacity,” Alberto Cladera, general manager at Air Europa Colombia, told OBG. “Sector operators were not expecting the rate of incoming passengers to increase so quickly.” According to ATAC, by late 2017 El Dorado is expected to handle 90 flights and hour as opposed to 54 per hour. “That will put us at closer to the levels of an airport like London Heathrow, which has about 100 movements an hour, with the same two runways,” Salcedo Ribero explained. Work will also enable to more than double cargo handling capacity at the airport, from 500,000 tonnes per year to 1.2m tonnes.

Current estimates by Colombia’s Civil Aviation Authority anticipate that the number of passengers at the facility will reach approximately 40m by 2021, at which point a new airport will be necessary to service the capital. To that end, plans for a new international airport, called El Dorado II, are undergoing initial studies. Construction of the new facility, which will be located in western Bogotá and be separate from the current airport, is expected to get under way in 2018 and cost up to COP1.4trn ($420m). The new airport will be built to match the passenger capacity of the first airport.


The transport sector plays a key role in Colombia’s economy. The sector is poised to continue to grow over the coming years, which makes the issue of infrastructure expansion critical. High logistical costs make Colombian businesses less competitive internationally, but infrastructure investment programmes, such as the 4G programme and the PMTI, are likely to reduce operational costs with benefits trickling down to consumers and through the economy overall. Furthermore, the establishment of a long-term perspective for the advancement of multi-modal transport ensures the of growth the sector’s infrastructure will remain a priority for the country’s development agenda.

Bogotá’s El Dorado International Airport accounts for 40% of domestic and 75% of international flights