BajaNomad - Colonet project- front page LATimes

Colonet project- front page LATimes

thebajarunner - 3-25-2008 at 08:06 AM

From the Los Angeles Times
Mexico plans big splash with new Baja port
Some doubt the $4-billion project will be built, but backers dream of dominating West Coast cargo traffic.
By Marla Dickerson and Ronald D. White
Los Angeles Times Staff Writers

March 25, 2008

PUNTA COLONET, MEXICO — Mexico's government is preparing to open bidding on the largest infrastructure project in the nation's history, a $4-billion seaport that could transform this farming village into a cargo hub to rival the ports of Los Angeles and Long Beach.

If completed as planned by 2014, the port would be the linchpin of a new shipping route linking the Pacific Ocean to America's heartland. Vessels bearing shipping containers from Asia would offload them here on Mexico's Baja peninsula, about 150 miles south of Tijuana, where they would be whisked over newly constructed rail lines to the United States.

The massive development, which is to be privately funded, is attracting interest from heavyweights such as Mexican billionaire Carlos Slim Helu. The world's second-richest man is part of a consortium planning an "aggressive" run at the project, according to Miguel Favela, general director of Mexican operations for cargo terminal operator MTC Holdings of Oakland.

Favela said MTC had teamed up with Slim's IDEAL infrastructure company and Mexican mining and railroad giant Grupo Mexico in an effort to nab the 45-year concession.

Mexico's transportation secretariat will release the request for proposal in June and hopes to select a winner by summer 2009, Subsecretary Manuel Rodriguez Arregui said in an interview earlier this month.

Competition promises to be fierce. Hong Kong-based Hutchison Port Holdings, a major port developer and operator whose parent company is chaired by billionaire Li Ka-Shing, said it planned to study the bid documents. So will terminal operators SSA Marine of Seattle and Dubai's DP World.

Ditto for railroads Union Pacific Corp. of Omaha and Fort Worth-based BNSF Railway Co. Several companies had previously expressed interest in the deal but backed off after repeated delays in the launch of the bidding.

"All the major players . . . they'll be here," said a confident Rodriguez Arregui, who will oversee the selection process.

The Punta Colonet proposal will be structured as a joint port and rail project, requiring terminal operators, railroads and construction companies to join forces to win the deal. Hutchison and Union Pacific had formed an earlier alliance that dissolved last year. Sources said SSA had partnered with leading Mexican construction firm Empresas ICA. Those companies declined to comment about their arrangement.

Rodriguez Arregui said Mexico would choose the group that could guarantee the most volume, and he estimated the facility would be capable of handling a minimum of 2 million containers annually at start-up.

The prospect of billionaires duking it out over this remote stretch of Baja underscores just how lucrative the movement of goods between Asia and North America has become. About 30 million containers crossed the Pacific last year, a flow that had been increasing by about 10% annually for more than a decade until recently. And, though transpacific trade has slowed because of weakness in the U.S. economy, experts said those figures would continue to grow over time.

With the West Coast's largest port complex, L.A.-Long Beach, constrained by urban development and environmental regulations, shippers are searching for alternatives.

Punta Colonet has emerged as an attractive option. It's close to the United States. It possesses a wide, natural harbor. And it's located in a rural, lightly populated area offering almost unlimited room for expansion.

"In the long run . . . it could get to the size of Long Beach-L.A.," which last year handled 15.7 million containers combined, Favela said. "Without a doubt, this is one of the biggest green-field projects ever to be done" in the industry.

The plan is nothing if not ambitious. Punta Colonet would be the first major seaport built in North America in nearly a century.

The harbor would have to be dredged and protected with breakwaters. The rail links could prove costly and complicated. Hundreds of miles of new track must be laid in Mexico.

But the ultimate route and U.S. crossing points would depend on which railroad snared the deal and how it would link up with existing networks on both sides of the border.

Mexico's transportation secretariat estimates the winning consortium will have to invest at least $4 billion to get the project launched.

Some industry experts are skeptical. Dubbed the "Port of Illusion" by one Baja newspaper, Punta Colonet has been plagued by legal squabbles and other setbacks since it was first proposed in 2004. While Mexico dithered, competitors forged ahead.

Panama is in the midst of a $5.3-billion expansion of its landmark canal. Canada, whose coast is the shortest sailing distance from Asia, is looking to capitalize on that advantage with $3 billion in port and rail improvements to speed cargo to the United States.

Ports along the West, East and Gulf coasts of the U.S. have begun their own upgrades. So has Mexico's own Puerto Lazaro Card##as on the Pacific Coast of the state of Michoacan.

"The logic for [Punta Colonet] is not as strong now," said Asaf Ashar, research professor with the National Ports and Waterways Institute in Washington. But others insist there will be plenty of boxes to go around. The Punta Colonet project could be especially appealing to U.S. railroad interests, which don't want to lose business to Canada or Panama.

Union Pacific owns a 25% stake in the Mexican railroad firm Ferromex, which is part of Grupo Mexico. And it controls the U.S. side of the tracks at half a dozen key border crossings from Calexico, Calif., to Brownsville, Texas, making it an obvious contender.

Union Pacific spokeswoman Zoe Richmond said the company was waiting to see the Mexican government's request for proposal. She wouldn't comment on whether the railroad was contemplating renewing its partnership with Hutchison or joining a new consortium to bid on Punta Colonet.

Some industry veterans say Mexico's timetable may be overly aggressive and that its insistence on awarding the contract as a package deal rather than divvying it up into separate infrastructure, port operation and railroad pieces will make a complex project even more unwieldy.

Mexico has a spotty track record when it comes to executing big public-works projects on time, on budget and with top-flight quality. Much is riding on the outcome.

"What's at stake here is much more than the project itself," Rodriguez Arregui said. "It's our capacity to show the world that we can do big things."

Not everyone is likely to share his enthusiasm.

A new Baja port could dilute the power of Southern California's unionized longshoremen, whose muscle depends in part on shippers having few options on the West Coast. Surfers will lose a prized spot for catching waves near Punta Colonet. Environmentalists are already worried about potential destruction of some of the area's unique plants and sea creatures.

Some U.S. border communities might not welcome a major new rail development in their backyards. Union Pacific met stiff resistance from vegetable growers near Yuma, Ariz., after it floated the idea of routing Punta Colonet containers northeast out of Baja through prime farmland there.

Punta Colonet dwellers, in contrast, are thrilled. Their dusty hamlet of about 2,500 souls will need to be reinvented as a modern city with massive upgrades to its roads, housing, water system and power supply. State and local officials are planning for a city of about 200,000 to spring up around the port.

Such a thought is enough to fill even a hardened urban dweller with regret. The winding two-lane highway heading south into Punta Colonet crosses mist-covered foothills and tranquil valleys. The natural harbor is an azure collision of sky and sea.

But the farmers who scratch out a living here in this stunningly beautiful but impoverished stretch of oceanfront say they are willing to trade a little paradise for prosperity.

Many are hoping to get rich selling land to the port's developers or to other businesses that would sprout to support the project. At a minimum, they'd like to see the streets paved and their kids have a shot at landing jobs beyond the produce packing houses.

Looking out at a stretch of unbroken water that someday may shelter massive tankers and humming cranes, Jesus Lara, the representative for several peasant landowner groups, was pragmatic. He said Punta Colonet was too arid to become an agricultural powerhouse. It's too remote to capitalize on tourism. And many of its residents are getting too old to count on something better coming along.

"This port may be the last opportunity any of them gets," he said. "You can't eat the view."

David K - 3-25-2008 at 08:12 AM

Look for things to happen along the railroad corridor: Colonet to near San Vicente then east to Valle Trinidad, through San Matias Pass, along Hwy. 3 to Hwy. 5, then north to the border between Mexicali and Algodones.

wilderone - 3-25-2008 at 09:10 AM

"Some U.S. border communities might not welcome a major new rail development in their backyards."
That's an understatement. This project will go nowhere without a terminus for the rail line in the US. And nobody wants it.

From Coalition for a Safe Environment (all arguments against US participation in the Colonet project).

"Two major universities in the City of Los Angeles, the University of Southern California (USC) and the University of California Los Angeles (UCLA) and hundreds of other international universities have completed hundreds of medical and scientific studies that prove that air pollution from Ports and the Goods Movement Industry causes significant, permanent and life threatening illnesses, diseases and death.
Ships, trucks, handling equipment, electric generators, power plants and construction equipment use diesel fuel and the smoke from diesel fuel causes cancer, causes numerous respiratory health problems, causes heart attacks and causes premature death."

And for the citizens: Public Safety Impacts

Ports, the International Trade Industry, Goods Movement Industry, Distributors and Retailers priority is to make maximum profits-- not protect public health or public safety. Public Safety can be impacted from the following categories:
Lack Of Enforcement Laws, Inadequate Budget & Police Support Staff
Lack Of Fire Department & Hazardous Materials Handing Department Budget & Services
Failure To Have Emergency & Evacuation Plans
Failure To Incorporate The Best Available Control & Safety Equipment
Truck & Train Accidents While Moving Due To Illegal Pedestrians & Vehicles
Truck & Train Accidents Due To Human Operator Error
Trucks & Train Accidents Hitting Pedestrians & Vehicles At Crossings
Train Derailment Accidents
Truck, Train & Ship Accidents While Carrying Explosive Fuels & Gases
Truck, Train & Ship Accidents While Carrying Toxic Chemicals
Ships Crashing Into Piers & Other Ships Due To Human Error
Ships Crashing Into Piers & Other Ships Due To Ship Equipment Malfunction
Ships Crashing Into Piers & Other Ships Due To Fog & Extreme Weather
Accidents Such as Fires & Explosions At Bulk Loading Facilities
Accidents Such as Fires & Explosions At Oil & Gas Terminal Storage Tank facilities
Hazardous Materials Handling Accidents
Truck & Equipment Accidents At On-Port & Off-Port Inspection Facilities"

Read the entire report: http://www.coalitionfase.org/puntacolonetreport-english.html

TMW - 3-25-2008 at 11:34 AM

Quote:

Originally posted by wilderone
"Some U.S. border communities might not welcome a major new rail development in their backyards."
That's an understatement. This project will go nowhere without a terminus for the rail line in the US. And nobody wants it.

From Coalition for a Safe Environment (all arguments against US participation in the Colonet project).

"Two major universities in the City of Los Angeles, the University of Southern California (USC) and the University of California Los Angeles (UCLA) and hundreds of other international universities have completed hundreds of medical and scientific studies that prove that air pollution from Ports and the Goods Movement Industry causes significant, permanent and life threatening illnesses, diseases and death.
Ships, trucks, handling equipment, electric generators, power plants and construction equipment use diesel fuel and the smoke from diesel fuel causes cancer, causes numerous respiratory health problems, causes heart attacks and causes premature death."

And for the citizens: Public Safety Impacts

Ports, the International Trade Industry, Goods Movement Industry, Distributors and Retailers priority is to make maximum profits-- not protect public health or public safety. Public Safety can be impacted from the following categories:
Lack Of Enforcement Laws, Inadequate Budget & Police Support Staff
Lack Of Fire Department & Hazardous Materials Handing Department Budget & Services
Failure To Have Emergency & Evacuation Plans
Failure To Incorporate The Best Available Control & Safety Equipment
Truck & Train Accidents While Moving Due To Illegal Pedestrians & Vehicles
Truck & Train Accidents Due To Human Operator Error
Trucks & Train Accidents Hitting Pedestrians & Vehicles At Crossings
Train Derailment Accidents
Truck, Train & Ship Accidents While Carrying Explosive Fuels & Gases
Truck, Train & Ship Accidents While Carrying Toxic Chemicals
Ships Crashing Into Piers & Other Ships Due To Human Error
Ships Crashing Into Piers & Other Ships Due To Ship Equipment Malfunction
Ships Crashing Into Piers & Other Ships Due To Fog & Extreme Weather
Accidents Such as Fires & Explosions At Bulk Loading Facilities
Accidents Such as Fires & Explosions At Oil & Gas Terminal Storage Tank facilities
Hazardous Materials Handling Accidents
Truck & Equipment Accidents At On-Port & Off-Port Inspection Facilities"

Read the entire report: http://www.coalitionfase.org/puntacolonetreport-english.html

With all this, why don't they shut down the LA-Long Beach facilities?

Gadget - 3-25-2008 at 11:49 AM

Quote:

Man, all this will give Chicken Little a massive headache :lol:

HEADS UP EVERYONE :!:

Taco de Baja - 3-25-2008 at 12:41 PM

Quote:

Originally posted by TW

With all this, why don't they shut down the LA-Long Beach facilities?

If you think the economy is bad now, try shutting off the massive supply of cheap to expensive goods we use everyday (plastic toys-clothing-electronics-cars) that flow through the LA/Long Beach port.....

Sharksbaja - 3-25-2008 at 02:14 PM

Yea, if the Chinese junk we're buying would last a while we could cut down on the volume of imported......junk.

BAJABAILADOR - 3-25-2008 at 06:23 PM

O.K. I sat down with a big glass of kool aid and read the Coalition For A Safe Enviroment Report. :?:

Must make emergancy trip to colonet fri. :yes:

Gather as many freinds and locals for big party or should I say meeting at house in San Antonio Del Mar. :biggrin:

Someone in the the local community is going to have to establish a local local of the long shoremen union fast.:rolleyes
Also perfect opportunity for a local to establish the first Carbon Credit Bank in all of Mexico. :wow:

BAJABAILADOR - 3-25-2008 at 06:28 PM

Oh sorry one more thing,got to sell house before 121,000 tractor trailer rigs a day hit hwy 1 heading north no matter how many lanes.

With Apologies to Political Analysts

Gypsy Jan - 3-25-2008 at 07:01 PM

Here's a summary:

Major politician/businessman announces major project in Baja.

Lots of press, some money gets passed around and maybe some earth gets moved (remember Escalera Nautica?)

Then everything goes away until the next election cycle.

I am more worried about the things that go on quietly in the background.

David K - 3-25-2008 at 07:22 PM

Quote:

Originally posted by BAJABAILADOR
Oh sorry one more thing,got to sell house before 121,000 tractor trailer rigs a day hit hwy 1 heading north no matter how many lanes.

The railroad line is to move the cargo... I hope! If there will be semi trucks too, then a four lane road is a must or a second highway between Ensenada and Colonet!

BAJABAILADOR - 3-25-2008 at 08:04 PM

from the coalitionfase report

existing streets and highways to include four or more truck lanes rather than build new separate truck routes. Normal public traffic will face congestion at every intersection, bridge, highway and road entrance and exit. A ten million container a year Port facility will generate over 40,000 truck trips a day. The current Port of Los Angeles annual container volume is 13 million containers and truck traffic is 43,000 truck trips per day and it is proposed to expand the Port capacity to 49 million containers annually which would increase truck traffic to over 121,000 truck trips a day. The average container size in the future will be 45' and larger, they will hold over 40% more cargo, increasing from the standard 20' and 40' length.

wilderone - 3-25-2008 at 08:23 PM

No joke re truck traffic. Do research on the Alameda port container corridor. Pollution too. There was legislation to limit operation off-peak hours to reduce highway congestion - 3:00 pm to 2:00 am. If the rail terminus is in Yuma, as is talked about now, then that traffic will be really bad, considering it will be going north, and that route is already full of truck traffic - Phoenix is a nighmare now. Yuma would need new highways, and farmers are worried that diesel pollution would rain on their crops.

bajalou - 3-25-2008 at 08:43 PM

The object of the project is to move the container traffic destined for the Midwest, gulf area, east coast and Europe. And for this type of traffic rail is the only economical way to handle it. LA/LB will not close because of Colonet.

A large percentage of the containers offloaded at LA/LB ports goes to the east coast and is reloaded on ships for Europe saving the shipping companies money by turning the ships around for another load. They began doing this in the late 70's, and from watching the rail traffic east of the LA basin, it continues to expand.

wilderone - 3-25-2008 at 09:35 PM

Which are Int. 10 and 40.