Search is on for more West Coast ports

May 3, 2005
The success of Mexico's booming West Coast ports, Manzanillo and Lazaro Cardenas each located some 1,000 miles distant from the U. S. border is sparking

For instance, the port of Ensenada in Baja California, just 100 miles south of the Tijuana border, is revamping its facilities, dredging its cove to handle larger ships, and has begun intermodal deliveries of containers. Separately, late last year, Hutchinson Ports Holding of Hong Kong signed an agreement with the Government of Baja California to jointly carry out a feasibility study to build a port and a 150-kilometer railroad to connect with Mexicali. The study is due to be completed in July 2005. If undertaken, this would not be a federal Mexican project.

In April a group of major shipping and freight companies announced that they are eying Punta Colonet — about 150 miles south of Tijuana — as a site to develop as a 27,000-acre, multibillion-dollar deep sea port. The idea is that Punta Colonet would initially attract one million containers a year, with capacity to handle as many as five million after just five years of operation, handling cargo from both Los Angeles and Long Beach. Both U.S. ports handle about seven million TEUs a year, but container ship traffic from China alone is growing at a rate of 15% a year. Neither Los Angeles nor Long Beach has room for growth, and they have other impediments, including environmental restrictions.

It's been hinted in the press that Punta Colonet could become the "future Mexican Long Beach." The project has been theoretically budgeted at $1 to $2 billion. It includes a 93-mile, two-way railroad to Mexicali, east of Tijuana, over the desert and through the Juarez mountains. The rail line would link to Calexico, better known as Imperial Valley, from where products would be redistributed throughout the U.S.

Also in the proposal stage is the construction of roads, housing projects and extensive infrastructure, since none presently exists at Punta Colonet. Expectations are the completed port will return an estimated $200 billion dollars to investors and would develop now vacant areas of the Baja California peninsula.

"We have to get Colonet developed," says Walter Romanowski, an executive with Los Angeles-based Marine Terminals Corp. (MTC), a holding company owned by Evergreen and Yang Ming shipping lines of Taiwan, Hanjin of South Korea and China Shipping of Shanghai — all among the world's largest shipping firms. "There are no other viable West Coast options."

Evergreen, however, has disclaimed any interest in investing in this still " secret project," which is being promoted by Mexico's largest port operator. Hong Kong-based Hutchison Port Holding, on the other hand, has voiced interest in the port's development.

"Evergreen does not participate in the Mexican terminal of MTC and is not a true stockholder in MTC," Evergreen told British transportation news service EyeforTransport.

Romanowski wants to build a complex of berths, warehouses and cranes that by 2012 will be handling 1 million standard container units a year.

In Mexico, the project is almost nonexistent. The Secretariat of Communications and Transportation has made no official announcement about it, and in Baja California the state governor, Eugenio Elorduy Walter, only acknowledges that "we have signed an agreement for a feasibility study of the Punta Colonet project" with Hutchison Port Holdings.

The Hutchinson Port director general in Mexico City, Jorge Magno Lecona, declined to speak on the subject, saying Baja's state government and corporate officers of Hutchison Port Holding are negotiating the deal. In Mexico, Hutchison operates the ports of Ensenada, Manzanillo, Lazaro Cardenas and Veracruz, the nation's largest container ports.

Baja California Senator Hector Osuna Jaime claims the project will promote much needed growth in jobs and industry for Baja California. A new port, he says, will spur investors to build factories, possibly reversing the recent trend that has seen manufacturing jobs leave Mexico for China.

Punta Colonet has all the potential to serve as a much needed deep sea port on the West Coast. It is the only place left on the entire California coast that is pristine and ready for development.

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