Thursday, April 23, 2009

Punta Colonet, and West Coast Port "Wars"

Punta Colonet is a currently an isolated farming area in Baja California, Mexico. It is the proposed site of a deep water seaport:
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. (LA Times, March 2008)

Punta Colonel would most likley be non-union, or at least, not have the wages associated with the Longshoreman's and Teamsters unions. Because of the lower wage costs, it could pose a competitive threat to California's ports by the end of the next decade, especially if international trade does not recover and there is excess capacity in the industry. In this way, it would further the process of global wage arbitrage within the United States. And, though many Californians don't like the associated pollution that comes with their ports, they are an economic lifeblood, and any reduction in importance would further strain the state's economic future.

Punta Colonel might also work in relationship with the Trans-Texas Corridor - a proposed massive expansion in the transportation infrastructure from Mexico, through Texas, to points throughout the United States.

However, the Corridor and Punta Colonet face several "complications" to their future. Both are affected by the Obama administration's decision to ban Mexican trucking companies from operating in the United States. This eliminates the labor-cost savings that those firms bring.

Bidding has been delayed on the Punta Colonet port, given the current economy.
Mexico's largest construction firm, ICA, does not expect the 50bn-peso (US$3.26bn) Punta Colonet port project, in Baja California state, to be tendered before 2010, the firm's VP of administration and finance, Alonso Quintana, told BNamericas.
The announcement followed a statement made on January 14 that the tender would be postponed indefinitely due to the global economic crisis, the second time the project had been delayed. (Business News Americas, March 2009)
Its future is also complicated by the expansion of the Panama Canal.

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