El Salvador’s failure to find a concessionaire for the Port of La Unión (PLU) could leave it without a deepwater container handling facility and without the ability to develop a logistics network linking Central America’s Pacific and Atlantic coasts. This is the opinion of Alberto Arene, economist and former president of the country’s Autonomous Port Executive Commission (CEPA).
He stated that the lack of a concessionaire will indirectly help build a financial case for the construction of the proposed port of Amapala, in neighbouring Honduras, for which Korea International Cooperation Agency (KOICA) is undertaking a feasibility study. This would be a large, deepwater port on Tigre Island. Given the fact that Puerto Quetzal has also just opened in Guatemala, there may not now be a case to promote a rival facility in El Salvador.
According to Arene, the previous government of El Salvador understood that it needed a “heavyweight” operator for PLU. However, regional competition will drive down rates in Central America, and make it impossible for El Salvador to compete. The original concession for PLU became viable only when the government suggested that U$15M would be made available to dredge the access channel, first to 10m and later to 12m, but the first stage should have happened in 2015.
Had the PLU concession been a success, Honduras would not have proceeded with the Amapala project. The original idea was to create a logistics corridor linking PLU on the Pacific with Honduras’s Puerto Cortés on the Atlantic. However, a change of government in El Salvador and new people in charge at CEPA appear to have scuppered this arrangement.
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This complete item is approximately 300 words in length, and appeared in the May 2017 issue of WorldCargo News, on page 13. To access this issue download the PDF here.
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