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Informa UK Ltd
Attractive Puerto Rico Grabs All The Attention
June 20, 2003
Puerto Rico is perhaps one of the most feared of the new competitors in the Caribbean transhipment business because of its US connections and well-developed economy.
It already boasts the largest domestic import-export container market in the Caribbean and so enjoys a firm foundation on which to build transhipment activity.
The country is also ideally placed geographically to attract transhipment cargo along both the North and South America and transatlantic shipping routes, since minimal diversion from established shipping lanes will be required.
As befits a territory which is constitutionally part of the US, Puerto Rico is diving into transhipment in a big way.
The $1bn Port of the Americas, as the project is called, envisages the establishment of 7,500 feet of deepwater container berths which will essentially have the effect of linking the three existing ports of Ponce, already Puerto Rico's second busiest port, Guayanilla and Penuelas, which is the receiving centre for LNG imports from Trinidad and Tobago.
A new 1,000-acre industrial park will adjoin the port, intended to attract manufacturing and service industries with a heavy export bias.
Another 110 acres of reclaimed land created by dredging in Ponce harbour will be available for container storage, essential in the handling of large volumes of transhipment traffic.
Dredging is due to start next February. Reclamation has an environmental impact, of course, and it was environmental concerns that threatened to sink the project at an earlier stage.
More than half the $10m seed money the government set aside for funding studies had to be spent on environmental reports.
The US Army Corps of Engineers was engaged to undertake two studies on the ecological aspects of the project.
The US Environmental Protection Agency has itself expressed concern about the restoration of mangroves that may be damaged during construction work on the port and Puerto Rico's governor, Sila Maria Calderon, the first woman to hold the post, has given the assurance that "whatever mitigation needs to be done we will comply with all the regulations".
The fact is, the Port of the Americas is considered too important to the Commonwealth's future economic development to be sidetracked by outside considerations.
Governor Calderon has estimated that $3.6bn a year in extra national income will be generated by year five following the completion of all port construction in 2007. By 2017 this should jump to $6bn annually.
Between 6,000 and 10,000 direct jobs are likely to be created over time by the port plus another 15,000 to 20,000 indirectly.
Governor Calderon has set up a Port of the Americas Commission comprising representatives of private corporations, banks, economists and other professionals which will serve as an advisory body to the directors ofthe port.
The Puerto Rican government, through the Puerto Rico Infrastructure Financing Authority, has been advertising worldwide for companies that will be able to develop, operate and manage the Port of the Americas. The successful bidder will be granted a 25-30 yearlease. Some of the biggest names in port operation are known to have indicated interest, including PSA Corporation and ICTSI (International Container Terminal Services) of Manila.
A Dutch-Puerto Rican consortium, Main Ports of Puerto Rico, is also in the running.
The Port of the Americas will be able to handle up to 2.1m teu a year when it goes into operation.
The intention is that a substantial portion of that volume will be transhipment business.