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Transshipment Port Moves Full Steam Ahead


July 6, 2000
Copyright © 2000 CARIBBEAN BUSINESS. All Rights Reserved.

The transshipment port project is moving full steam ahead, with a request for proposal (RFP) likely to go out within six to seven weeks.

The development of the transshipment port in Guayanilla is the focus of government attention from different groups and angles. (CB June 1). This week, the government’s economic development team for the project is expected to meet in San Juan with professor Ernst Frankel, who did the feasibility study on the port. Next week, Gov. Pedro Rossello is expected to announce the decision to build the transshipment port in Guayanilla and the date for a seminar here with top global transshipment players.

In related developments, Puerto Rico Energy & Sewer Authority (Prepa) Executive Director Miguel Cordero is negotiating for Prepa’s purchase of the former Commonwealth Oil Refining Co. (Corco) facilities in Guayanilla for some $90 million. The Corco property would add to the 800 acres needed for the value-added services necessary for a successful transshipment port, as well as a 42-foot-deep port capable of handling oil tankers and 200 tanks to store oil and gas for Prepa’s needs. Sources say Corco owns 550 acres and the Sucesion Valdivieso owns the other 250.

At next month’s seminar for port developers and world maritime players, a preliminary RFP will be presented for participants’ input, according to an inside source. The final RFP, to include that input, should go out two weeks later, with an urgent appeal for interested parties to submit proposals immediately.

According to insiders, the government plans an accelerated yet serious and thorough process to advance the project as much as possible so that, if a final contract has not been signed before Rossello leaves office January 2001, at least the project will be so advanced that it may not be discarded by the next administration. Insiders agree a signing is not likely before January because of the complexity of the project. For the Rossello administration, according to insiders, the transshipment port will be backbone of the island’s new economic model. Both leading gubernatorial candidates, New Progressive Party’s (NPP) Carlos Pesquera and Popular Democratic Party’s (PDP) Sila Calderon, have publicly expressed their support of the transshipment port project and its location on the southern part of the island. (See pages 30-33.)

The administration has already advised key developers of the government’s interest in building a transshipment port. The government has quietly plugged along, with investigative trips to transshipment ports in Singapore and Rotterdam. Other steps have been taken but an agreement of confidentiality signed by everyone involved prohibits the release of further information.

Beyond Guayanilla itself, port development activities will extend all the way to the Ponce Port, Puerto Rico’s second largest port. Transshipment port development cost is not expected to reach $1 billion but the government’s expense is expected to only cover the cost of the land to be expropriated, according to insiders.

While the rush is rumored due to Gov.Rossello’s desire to conclude his political life with the transshipment port to his credit, it is actually being dictated by the maritime industry’s fast and furious worldwide changes. Competition in the Americas for a transshipment port’s location is forcing a decision by year’s end. The transshipment cargo brought from Europe and the Far East in post-Panamax ships, too large to pass through the Panama Canal, for North and South America as well as for Puerto Rico and the Caribbean, must be reloaded to smaller ships at the transshipment port. Transshipment port contenders include Miami, whose airport clearly dominates both passenger and cargo bound for South and Central America, Kingston, Jamaica, Puerto Haina, Dominican Republic and Freeport, Bahamas. A decision must be made by the government of the country involved, in conjunction, not only with a port developer, but with the maritime industry which plans for traffic in the shipping lanes.

Industry sources say Puerto Rico’s biggest competition is Freeport’s new port with strong financial backing and the capacity to become a transshipment hub. But Puerto Rico’s advantage is the impressive 1.8 million 20-foot-equivalent-unit (TEU) containers Puerto Rico moved in 1997. Existing cargo traffic is a big plus for the island.

In fact, according to insiders, while the island’s maritime wages are higher compared to other potential Caribbean ports, Puerto Rico’s solid political, economic and judicial structure, in addition to its highly skilled labor, presents such stability that, except for Miami, few can compete. Puerto Rico’s location on the Mona Passage, one of the principal international shipping lanes, puts the island in a unique and enviable situation.

This Caribbean Business article appears courtesy of Casiano Communications.
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