SUNDOG - 7-12-2007 at 08:21 AM
Going for the big catch
Baja's Ruffo, weaned in fishing industry, bidding on two major
infrastructure projects
By Diane Lindquist
UNION-TRIBUNE STAFF WRITER
July 12, 2007
ENSENADA – Ernesto Ruffo Appel is perhaps best-known as Baja
California's former governor or as Mexico's ex-border czar. But
since he left the governmental realm, he's been back to business.
EDUARDO CONTRERAS / Union-Tribune
A small man with a soft voice, Ernesto Ruffo Appel came to Baja
California's governorship in 1989 a near-mythical figure.
Ruffo, 55, who spent his early career in this harbor city's fishing
industry, is pursuing two huge, separate infrastructure projects
that would solidify an already thriving Baja California from the
ground up. If realized, both would further bind the economic futures
of the cross-border Californias.
"This is happening because of the enormous need from California,"
Ruffo said in a recent interview. "You look at this side and it's
kind of a clean slate, and you can draw the map for the roads, the
water, the electricity, the houses, the schools."
Ruffo and his partner, Ensenada businessman Roberto Curiel Amaya,
are the only local entrepreneurs competing to develop the much-
discussed port and rail project centered at Punta Colonet, 150 miles
south of San Diego.
Ernesto Ruffo Appel
Career: Pesquera Zapata, rose from personnel manager to general
manager, 1975 -1986; mayor of Ensenada, 1986-89; governor, state of
Baja California, 1989-95; commissioner for Northern Border Affairs,
2000-03; Ruffo & Associates, 2003 to present. Has been a member of
the Mexican National Chamber of the Fisheries Industry, the
Businessmen's Center of Ensenada, the Chamber of the Transformation
Industry in Ensenada and the Businessmen's Coordinating Board of
Ensenada. Taught at the Center of Technical and Superior Education
in Ensenada.
Education: Degree with honorable mention from the Technological
Institute of Superior Studies in Monterrey, specializing in finance,
economics and federal labor law.
Personal: 55 years old; married to Patricia; children, Ernesto, 30,
Veronica, 28, and Marco Antonio, 25.
Hobbies: Plays doubles tennis three times a week.
The $9 billion undertaking, designed to attract Asian goods bound
for the U.S. interior, is considered a good business opportunity due
to congestion at U.S. ports on the West Coast. Some of the world's
top shipping and rail companies are expected to express interest
when Mexico opens competitive bidding for construction and operating
concessions later this year.
Ruffo offers an approach in which he and Curiel would build and
control the port and rail projects.
"We'd be the landlords, and we'd lease it out as long as there are
berths available," he said.
Federal officials have not revealed how they will structure the bid,
but they have indicated the government would retain the role of
landlord.
Ruffo's other major project is less-publicized: a cargo airport
dubbed El Tigre that is 15 miles north of Ensenada, near where
Sempra Energy is building its liquefied natural gas complex.
"The nature of the airport is more attached to the needs of Southern
California itself," he said. "Air cargo is limited there."
Both transportation infrastructure projects – "separate, but linked,
naturally, in some respects" – would provide the economic building
blocks for further growth in Baja California, leading to industrial
and job expansion, Ruffo said.
"The projects would create a better environment for people so they
don't have to be jumping the fence. . . . Baja California could
become No. 1 in the Mexican union. This state could be bigger than
Nuevo Leon," he said, referring to the urban industrial power center
in northeastern Mexico.
A hail of outright and veiled criticism has been directed at Ruffo
and his approach to the projects in the Baja California media, most
alleging that he's not a large enough player or that he is a
spoiler. But few count Ruffo out completely.
"Infrastructure is tough. It's hard to make things go. The projects
tend to be very political," said John McNeece, a San Diego attorney
and chairman of the Mexico Business Center at the San Diego Regional
Chamber of Commerce. "But it's of importance to the region, so I
applaud his interest."
Ruffo served as a board member of the San Diego Regional Chamber of
Commerce in the early 2000s.
"Ruffo has made good contacts on both sides of the border," McNeece
said.
Ruffo claims to have investors from Asia and Europe committed to
both Punta Colonet and El Tigre, but he declined to divulge their
identities.
His background in the international fishing industry, his leadership
position in a state with global business ties and his mastery of
multinational relations have gained Ruffo important business and
political connections. For example, he counts Mexican President
Felipe Calderon among his friends.
A small man with a soft voice and unassuming manner, Ruffo came to
Baja California's governorship in 1989 a near-mythical figure. He
was the first opposition governor elected in Mexico in six decades,
boosted by both his personal popularity and public fatigue with
corruption.
University of Texas professor Peter Ward, who co-authored a book on
Baja California's political transition under Ruffo, told a reporter
several years ago, "When you meet him, you think, 'What a cute
little man.' But he is a very canny individual who managed to seize
the moment."
Ruffo, a member of the National Action Party, or PAN, who defeated
the ruling Institutional Revolutionary Party, or PRI, curbed rampant
government corruption but failed to loosen narco-traffickers' grip
on the state.
The state continued to make economic strides, however, most notably
drawing maquiladora manufacturing investment from Asia. The state
added more than 200 factory operators during his term.
In an interview upon leaving office after serving a term restricted
to six years, Ruffo acknowledged limited success on the job.
"It was like going to an unexplored jungle, and taking out your
machete and cutting a path because there is no road," he said.
While his sights today might be set on bigger deals, Ruffo is
drawing on his full work experience.
When he worked at Pesquera Zapata, where he rose from personnel
manager to general director, he was "just trying to design the best
net to catch the fish," he said. But, because the job required him
to fly all around the state, he later was able to identify the El
Tigre area as a good site for his cargo airport.
He's bought and leased thousands of acres for the project, which
recently gained federal approval as an aerodrome – one without
regularly scheduled flights. Now he's ready move to forward with
geographic, economic, environmental and land-use studies.
The port and rail effort has not moved as quickly, but Ruffo has
taken a greater business and personal stake in that project.
Under the business entity of Puerto Colonet Infrastructura, he and
partner Curiel, a developer with extensive interests in sand, gravel
and rock operations, have spent more than $3 million to buy land for
the project. Part of the property is tidelands that conceivably
would be converted to port activity. And part contains a nearby
mountain and rights of way to the beach so rock can be removed from
the mountain to build the project.
With container cargo from Asia to the United States growing at about
15 percent annually, the partners' plan is to build 18 berths at the
port capable of processing 850,000 TEUs of containerized cargo
annually. TEUs, or 20-foot equivalent units, is a standard measure
used for international cargo containers.
Instead of running a rail line 180 miles across the Baja California
peninsula to cross near Yuma, Ariz., as the federal plan envisions,
they'd build a line to El Paso in the state of Chihuahua, where rail
crossings into the United States already exist.
"We've been lobbying federal officials so that this vision gets
incorporated into the (bid)," Ruffo said. "If they want an open and
transparent bidding environment, it has to take in account all
proposals."
Although a dispute with a Baja California business group over the
right to minerals at the ocean bottom at the port site has delayed
the project for a year and a half, Ruffo thinks the government's
move to cancel the mineral group's concession soon will get the port-
rail project moving.
Some of his harshest criticism has come from Gabriel Chávez, who
until recently controlled the mineral group, Grupo Mineros Lobos.
Chávez has alleged that Ruffo is involved in the Puerto Colonet
project for personal enrichment.
Other stories have dealt with a riff between Ruffo and current Baja
California Gov. Eugenio Elorduy Walther, who was said to have
favored Hutchison Port Holdings and Union Pacific as the port-rail
project developers. Both of those companies have since let it be
known that they no longer are interested in Puerto Colonet.
Ruffo dismisses his critics.
"I'm a businessman by essence. I'm not a politician," he said. "For
many people, it means a lot of money. But I have all my needs met."
And, he says the project is more important than his role in
achieving it.
"I'm in it because I want to win. But I am happy for the project,"
he said. "It's something good for everybody."
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Diane Lindquist: (619) 293-1812; diane.lindquist@uniontrib.com