Ponce's Port of the Américas' transshipment potential rapidly fading away
While ports in the Caribbean are reportedly rushing to meet potential challenges posed by the expansion of the Panama Canal, Puerto Rico has fell very far behind in the race to capture the dramatic increase in transshipment volume expected from the post-Panamax vessels transiting through the Caribbean region.
Recently, it was reported Puerto Rico's only hope for a transshipment hub—Ponce's Port of the Américas (POA)—would receive a mortal blow because legislation pushed through the Legislature by Gov. Luis Fortuño, which would have provided a $59 million line of credit from the Government Development Bank (GDB) to continue the development of the port facilities, won't be finalized before this administration's term expires.
"There isn't enough time for the GDB to complete a prospectus and finalize a bond issue," New Progressive Party (NPP) representative Luis "Tato" León Rodríguez said. Ponce Mayor Mayita Meléndez insists that the funds are essential to implement what she has coined as the "Ponce Solution."
For the past three years, Meléndez has been arduously working to find a solution to the port's woes.
In 2011, Meléndez held a press conference and announced her plans for the port. The mayor said she would merge the operations of the Port of Ponce, which are primarily break-bulk cargo (cargo not in containers), and try to develop local containerized-cargo activity for POA as a first step for its development into a transshipment hub.
Subsequently, Fortuño and Meléndez agreed to create a third entity, the Ponce Port Authority (PPA), which would receive POA's assets under a concession contract from the Port of the Américas Authority (POAA), the port facility's administrator. This step would allow the south-coast municipality to take complete administrative control of POA.
Since POA's conceptualization more than a decade ago, the Puerto Rico government has invested more than $250 million in the port zone with no results.
In addition, over the past 10 years, conversations about management of POA's operations have been held with world-class port operators, but no company has been signed yet.
In the meantime, neighboring Caribbean countries—such as Jamaica, the Bahamas, Panama, Colombia and Venezuela—have either expanded their already-existing transshipment facilities or built new ones, as is the case with the Port of Caucedo in the Dominican Republic. Caucedo's construction started in 2003 and was finished in 2007, when it commenced operations. The D.R. port already is considered one of the most important hubs in the Caribbean.
MANY FEEL PUERTO RICO MISSED THE BOAT
Even though POA has been planned as a world-class transshipment port in Puerto Rico's southwest region for more than 10 years, and after investing nearly $250 million, the port still hasn't begun transshipment activity.
"Twelve years ago, in 2000, when POA was first proposed, Puerto Rico had many advantages over neighboring island ports. It had the location and infrastructure, and U.S. jurisdiction, before all the different commercial trade agreements, was an added value," David E. Lewis, vice president of Manchester Trade Ltd., international business advisers, told CARIBBEAN BUSINESS.
"At that time, all the horses were at the starting gate. Now, all the other horses have finished the race. Our neighboring islands expanded their facilities, signed agreements with global operators and are fully functional while we never got out of the gate," Lewis said.
"While the other ports kept moving, our internal debate over the port's location delayed any action. While the others were effective at promoting their facilities, we never did a good job at it; in fact, we stopped promoting the project some time ago," he added.
Some industry experts are skeptical the project will ever work. Actually, many don't even consider the port to be a viable transshipment hub. High local labor and energy costs, as well as federal regulations, increase the price of doing business on the island, making it even more difficult to compete against other Caribbean ports—or for the time being, given the weakness of the economy—even using the area for a local cargo port.
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