Tempted to grab a share of the massive Asia transpacific container traffic to the twin US ports of Long Beach and Los Angeles and growing trade between China and Latin America, Mexico has drawn up an ambitious plan called National Infrastructure Programme 2007-2012 which en- visages the build-up of its port, road and rail infrastructure.
According to the programme, Mexico will build five new ports, expand or modernise 22 more, increase annual container capacity from four to seven million TEUs and improve performance at terminals.
The ports will be developed as part of an integrated multimodal transportation system, which will include the building of 12 multimodal road and rail channels connecting the ports.
Top of the list of the port build-up is the ambitious Punta Colonet project. The proposal is to turn the bay (Bah'a Colonet) near Punta Colonet, a desolate and sparsely inhabited inlet, into a multi-billion dollar deep-water mega-container port able to handle next-generation vessels. The port will cover a 30 km coastline which will make it as large as the US ports of Los Angeles and Long Beach combined. The port, 241 km south of San Diego, US, will have 10 to 20 berths and a 300 km double-track rail connection to the US border.
Bidding for the concession for the two projects - the port and the railroad - could start next year and construction is expected to take four years. The port will have an annual capacity of one million TEUs initially and six million TEUs by 2025.
But the grandiose Punta Colonet project may never get off the ground as there are too many hurdles to jump. First, the entire infrastructure will have to be built from scratch as the site is virgin area and would require the building of the most basic urban facilities. Punta Colonet would change the Baja California coastline forever. It would mean the development of hundreds of miles of coastline north and south of the port.
The construction of a port larger than Los Angeles/Long Beach port will lead to migration of thousands of people with the subsequent enormous need for services, housing and natural resources. A second problem is who is going to pay for the US$6 billion price tag.
The funding of the project was discussed at a recent conference in Guadalajara. The consensus was it has to be a private-public partnership but there was controversy how this would work.
The government is committed to the project and financiers and engineers are raring to go, but there are some industry experts who see the entire project as unrealistic, in large part because of the issues of financing and government coordination. "It is not clear if it will be built,'' said Norman Anderson, president and chief executive officer of CGLA Infrastructure.
Panama's decision to go ahead with the $5.25 billion expansion of the Panama Canal may kill the Punta Colonet project. The canal expansion contract has been awarded and it is expected to be finished by 2018. "The expansion of the Panama Canal almost single-handedly kills Punta Colonet," Joseph Ritzman, project development manager of SSA Marine's terminal operations in Mexico, told the press recently.
Punta Colonet is not the only port on the agenda, said Luis Alberto Ibarra Pardo, director of the infrastructure unit of the Office of the President of Mexico. There are other ports to consider, he added, pointing to the more southerly ports of Manzanillo and Lazaro Cardenas. Manzanillo mainly serves the industrial centre of Guadalajara while Lazaro Cardenas serves central Mexico.
Both ports have ample scope to expand, he said, and revealed that Manzanillo will develop 270 hectares in the first phase and 470 hectares in the second phase. This is only half of the 1,500 hectares that Lazaro Cardenas has for new businesses. Lazaro Cardenas is planning to build bulk metals, mineral and roro terminals next year and increase container capacity to 2.5 million TEUs.
Mexico's goals are grandiose, said analysts, and one has to wait and see whether they will remain on the drawing board or get off the ground.
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