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South Florida Sun-Sentinel
Puerto Rico Plans Two $1B Projects That Could Compete With S. Florida
By Doreen Hemlock
August 21, 2002
Hoping to jump-start its slow economy, Puerto Rico is planning two big development projects valued at more than $1 billion each that could represent a competitive challenge to South Florida seaports and convention business.
The Puerto Rico government is counting on partnerships with private firms to create a massive Port of the Americas project on the island's south coast, aimed largely at trans-shipment, or shifting of cargo between giant ships and smaller vessels serving nations in the Caribbean and Latin America.
It also is joining with business on a huge convention center and 850-room hotel in San Juan to lure big international meetings that tend to go instead to Mexico or Miami.
Both projects are still in early stages, but initial plans call for the convention center to start in 2005 and seaport by 2007, a top Puerto Rico official said Tuesday at a seminar in Miami.
"I'm confident, because we're already getting companies interested in investing," said Edgardo Torres-Caballero, assistant secretary for strategic projects at Puerto Rico's Department of Economic Development and Commerce. Interest in the seaport, for example, comes from port operators in Asia's Singapore and Europe's Hamburg and Barcelona, he said.
South Florida executives are eyeing both $1 billion-plus developments, but waiting on details to assess the eventual challenge.
The port seems a more distant concern, given South Florida's dominance in shipping to the Caribbean and Latin America. And the convention center project faces hurdles, including limited hotel rooms in San Juan and too few affordable flights to the island, executives in Miami noted.
"The question is how big is the pie going to be after 9-11 and the worldwide recession," asked William D. Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau.
The projects come as the U.S. Commonwealth of Puerto Rico seeks to diversify its manufacturing-based economy, now that a phase-out of some U.S. tax breaks and growing competition make it harder to lure factories and reduce unemployment from roughly 12 percent today.
Torres-Caballero said the seaport is a top priority, because San Juan, Puerto Rico's largest port, will run out of room by 2010. Initial plans call for the government to invest $200 million in deepwater facilities in Ponce and Guayanilla on the south coast, with 9,000-foot piers that can handle up to six of the popular "post-Panamax" ships that are too big to fit through the Panama Canal.
Those facilities would be complemented with about $800 million in private investment, largely in warehouses and industrial parks to process pharmaceuticals and other goods for export, he said.
Puerto Rico faces heavy competition for trans-shipment business, however, from ports in South Florida, Bahamas, Jamaica, the Dominican Republic, Panama, Colombia and Venezuela.
It also faces a major obstacle: As a commonwealth, it's required by U.S. law to ship goods to and from the states in U.S.-flag ships, the world's most expensive. Those ships generally don't compete well on routes outside the United States. Yet non-U.S. flag carriers won't easily shift to new routes without big cargo volumes, port executives said.
"We're not overly concerned at this point, because all of our routes are in place" for trans-shipment with the Latin region using non-U.S. flag carriers, said Berny List, assistant port director at the Port of Miami, South Florida's busiest seaport.
Torres-Caballero spoke at a breakfast seminar organized by the Puerto Rican Professional Association of South Florida, known as Profesa, the largest organization of the 130,000-plus Puerto Ricans living in the tri-county area.