Punta Colonet, Baja California

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Punta Colonet, north of San Quintín, Baja California, is one of the most productive agricultural areas in Mexico's Baja California peninsula. Its proximity to Mexican Federal Highway 1 and the United States have spurred the growth of large commercial farming in the area. Punta Colonet is a beautiful, unspoiled area where orchards and farms run right to the ocean's edge. The point, nearby town, bay, and cape are reputedly named after Captain James Colnett, a British sea captain who explored this section of the Pacific coast in the late 18th century. There has been tremendous growth in the region over the last five years.

1 Proposed Port
2 Proponents
3 Concerns
4 Rationale
5 See also
6 References
7 External links

[edit] Proposed Port

There is a proposal to turn the bay (Bahía Colonet) near Punta Colonet, a desolate and sparsely inhabited inlet, into a multi-billion dollar deep water mega-container port able to handle next-generation vessels.^[1]^[2] The mega-port will cover 30 km² which more than 70 km², making it as large as the U.S. ports of Los Angeles and Long Beach combined. The projected multimodal maritime center would make Punta Colonet the largest port in Mexico and the third-largest in the world, after Singapore and Hong Kong.^[3] Port operations will require a city of up to 200,000 people.^[4] The project will require a new power plant and a desalination plant. The port will also require a 300 km plus (200 mile) rail line from the Port to reach the United States border and an intermodal facility.

Hutchison Port Holdings, the world's largest port developer, had partnered with Union Pacific Railroad as one of the bidders for the project, but the plan was shelved after six years of study and over US$25 million spent by Hutchison Port Holdings – according to Mike Power, soon to be ex-CEO Mexico Major Port Project (as of August 2007), who is based in Ensenada, Baja California.

The reasons for the withdrawal from the partnership of Hutchison Port Holdings (HPH) and Union Pacific (UP) differ. Hutchison cites recalcitrance and obstruction from the Mexican federal government and the local Ensenada municipal government of Mayor César Mancillas Amador. Also, shipping demographics have changed during the course of six years in favor of expanding the Panama Canal which operates under a concession by the Panamanian government to Hutchison.

Union Pacific representative Robert W. Turner, Senior Vice-President of Corporate Relations, cited resistance to railroad lines traversing farmers' lands north of the U.S.-Mexico border crossing near Los Algodones, Baja California, and Yuma, Arizona. Whatever the true reason for the dissolution of the partnership, the Hutchison/Union Pacific partnership is over as by reported by Diane Lindquist of the San Diego Union Tribune on May 2, 2007.^[5] The Union Pacific proposal called for a new rail line to be built from the port and over the mountains to Yuma, Arizona, where it would have met the company's Sunset line.^[6]

[edit] Proponents

A Los Angeles firm, representing Chinese and Korean concerns, was lobbying the Mexican government to be granted permission to build the multibillion dollar port in the agricultural area of Punta Colonet, 150 miles (240 km) south of Tijuana, to handle between 1.5 million twenty-foot equivalent units (TEU) and 6 million TEU of cargo. A mineral rights lobby had a different plan to develop the area as a mining area. However, the mineral rights lobby was bypassed by the Mexican federal government, and the port was planned for bidding and obtained the backing of former President Vicente Fox of the PAN. Los Angeles area ports, likewise, also generally supported the plan as a congestion relief measure.

Ernesto Ruffo Appel, Baja California's former PAN governor and Mexico's ex-border czar, and Ensenada businessman Roberto Curiel Amaya teamed-up to bid on the project. They claimed then that investors from Asia and Europe were committed to Punta Colonet, but declined to divulge their investors identities.

Their plan is to build 18 berths at the port capable of processing 850,000 TEU of containerized cargo annually. The consortium also planned to combine the project with an air-freight airport north of Ensenada. It was reported that instead of running a rail line 180 miles (290 km) across the Baja California peninsula to and then connect the state capital Mexicali and Yuma, Arizona, as the federal plan envisioned, the defunct consortium of HPH/UP ostensibly would have built a line to Ciudad Juárez in the state of Chihuahua where rail crossings into the United States already exist. But certainly any such rail line necessarily would run through or near Mexicali, the capital city of the state of Baja California for any tie-in with the US trans-continental rail system.^[7]

[edit] Concerns

[edit] Environmental

One US environmentalist was quoted as saying of the project, “This is just another case of exporting California’s dirty environmental problems to the pristine coastline of Baja California. This is one of the last places we can preserve the beauty that once was the entire west coast.”

However, it make sense to place a major mega-port and intermodal rail freight facility in a less populated area such as Punta Colonet. Obviously, appropriate environmental safeguards need to be implemented under NAFTA regulations.^[8] Among the environmental investment required at Los Angeles ports are 80% less-polluting ultra-low sulfur diesel trucks, plus port electricity so waiting ships don't have to burn fuel oil. These things were said not to be required in Mexico. But Mexico indeed does has environmental safeguards which are now enforced. Environmentalists are also concerned with pollution from port operation of ships, trucks,and locomotives and the discharge of sewage, toxic paint, and invasive species discharged by the boats into the harbor. These concerns are real. Although these are actual truths many changes are being made at this time by many transportation companies such as Union Pacific railroad which is constructing a 90 million dollar solution to the Long Beach/Los Angeles problem of pollution as an inland port where the trucking industry will be reduced for access to the direct port movement of containers unless they wish the customer to be charged a fee for pick up or delivery of the container at the port where the train is exempt from the charge. ^[9]^[10]

[edit] Ejidos

Even though the development of the port was announced and many meetings were held with numerous foreign and domestic business executives, the nearby ejidos, or small communally-owned farming communities, that own the coastal land upon which the port will be built never were contacted. After banding together with a large property owner, those small landowners gained access to the planning and political processes so that their concerns could be heard and represented by the federal government. At this time the small land owners group have the largest say how the land will be used into relation to the needs of the land owners represented by Jesus Lara. Mr Lara has family ties in this area for decades and is a southern California businessman with ties to the trucking industries. With a point of view very congruent to the landowners in the area. t^[11]

[edit] Jobs

Also, some US citizens are concerned about loss of jobs in favor of cheaper Mexican labor. Where unions do not have a stronghold to direct employees terms and limits with employers may be the key to this project in relation to California based port operations success.A new view of Mexican labor may be apparent with Punta Colonet^[12]

[edit] Mining

Before the port project was started, the federal Economy Secretariat issued an operating concession to Grupo Minero Lobos, to permit mining of titanium and other metals from the sea bed in most of the bay. The concession covers 30,000 hectares - 45 kilometers of coastline and five kilometers into the sea, including the 3,000 Hectares designated to become Puerto Colonet. Grupo Minero Lobos believes that the mining concession automatically gives them the concession for the new port. The Mexican federal government opposes this because the port would lose its competitiveness.^[13]^[14]^[15]

Within the next decade this port may become the largest investment ever made in Mexico. It is likely that the project is going ahead regardless of the legal situation and the withdrawal of HPH and UP. The mining project will need the port as well. The two projects should be able to work together and prosper.^[16]

[edit] Security

Delivery of goods will need to be inspected at the US border, slowing just-in-time deliveries.

[edit] Monopoly ownership

The Chinese company Hutchison Whampoa that had proposed to build Puerto Colonet is owned by Chinese billionaire Li Ka-Shing, which company controls 35 major ports in the world including the four most important ports in Mexico. There was a concern about the near monopoly ownership of North American ports in the event of a conflict with China.^[17]

[edit] Rationale

If the port is not built, containers may have to be shipped in the port at Lázaro Cárdenas, Michoacán where expansion is currently underway to increase volumes, due to congestion at the ports of Los Angeles, Long Beach, and Oakland, which is even farther, unless expansion plans in US ports are aggressive enough.

Lázaro Cárdenas is used now on a small scale as a shipping gateway to interior US cities such as such as Chicago, Kansas City, and Houston, as it is closer to the heart of the continent than Los Angeles. Puerto Colonet on the other hand would be closer to fast growing Arizona, Nevada and other mountain states and could serve as a bypass to the congested Los Angeles region with a comparable distance to those markets, and it would be over a thousand miles closer than the port at Lázaro. Currently, ships often have to wait a week to unload in the Los Angeles region, and large truck congestion is a big problem on the Interstate 710 and other connecting higways in the LA Basin.

Thus, ports and jobs could be kept in the US, but at a much higher overall cost, as much of California's infrastructure is already maxed out.

The mega-port also would be expected to be a boon to the Baja California regional economy, providing several hundred thousand jobs directly or indirectly. A city nearby will need to be built, and highways and railways upgraded, providing vast economic growth potential.

The latest plan as of August 2007 is that Ernesto Ruffo Appel is putting together a new consortium to bid on the concession (and to build and run the mega-port) from the federal government. With the election victory of PAN gubernatorial candidate José Guadalupe Osuna Millán over former Tijuana mayor and PRI candidate Jorge Hank Rhon, the optimism is that the new governor will take the appropriate steps necessary to encourage rapid rail and port development within Baja California.

As reported in the Saturday/Sunday, August 4-5, 2007 edition of The Wall Street Journal, an article by reporter David Luhnow cites that the wealthiest man in the world, Mexican billionaire Carlos Slim, may be the motive money force behind a new consortium comprising his new construction company Ideal SAB, Grupo Mexico and UP rival, Burlington Northern Santa Fe (BNSF).

The story is not over as Ernesto Ruffo Appel and his associates buy up land along the Punta Colonet coastline under the name of a group called "Puerto Colonet Infraestructura".