With a proposed location just 150 miles south of the US/Mexico border, the Punta Colonet port is envisioned as a direct competitor for Asian cargo with US West Coast ports such at the Southern California ports of Long Beach and Los Angeles.
Over the past five years, the proposed plan has faced numerous delays and changes in both the scope and scale of the development. All movement on the development ceased sometime in early 2009, with most account citing the growing worldwide economic downturn.
However, Mexico's Secretary of Communications and Transport Juan Francisco Molinar recently indicated to attendees at a national port meeting in Mexico that plans for the Punta Colonet port were back on track. Given that Mexico has seen a 30 percent increase in Asian traffic this year, Molinar said, "I think we're on the right track to put Mexico on the logistics platform."
As a possible Mexican rival to the dominant Southern California ports, the development of Punta Colonet has raised concerns in the American shipping industry about a major shift of cargo to south of the US/Mexican border. The Colonet port would deal almost exclusively in US-destined container cargo from Asia that would head from Colonet via rail into the US southwest and then east to the US Midwest and Eastern Seaboard.
While Molinar offered no additional details in his recent comments on the current vision of a Colonet port, differing versions of the port plan in the past have ranged in cost from $1 billion to as much as $9 billion and varied in scale from smaller than the Port of San Diego to as large as the ports of Long Beach and Los Angeles combined.
In 2007, Mexican Deputy Transport Minister Manuel Rodriguez told Reuters that he expected the proposed port to be in the 5 million TEU-a-year size range, making Punta Colonet about the size of the New York/New Jersey port complex, the United State’s third busiest container port complex.
Rodriguez also told Reuters at the time that he expected the bids for the project to come in at a range between $5 billion and $6 billion. The Mexican government’s vision of the port in late 2008, shortly before movement on the plan ceased altogether, envisioned a Punta Colonet port about a third the size of the LA/LB complex, currently the busiest in the Western Hemisphere handling a collective total of about 15 million TEUs per year.
Despite the ups and down of the project, the Mexican government appears to be committed to building something at Punta Colonet.
In 2007, the Mexican government announced plans to spend upwards of $44.5 billion to upgrade and expand the country’s transportation infrastructure under President Felipe Calderón's $250 billion national development plan for 2007-12. The development of infrastructure to support Punta Colonet featured heavily in several major components of Calderón's plan.
In September 2008, Calderon personally opened bidding for the Punta Colonet megaport development, described at the time as the largest maritime project in the nation’s history.
“The physical space of Colonet is four times greater than the Port of Los Angeles and represents more than five times the space of the Port of Long Beach, in California,” said Calderon.
Colonet’s location, said Calderon, would allow Colonet to offer “greater dynamism and efficiency” for containers moving from Asia through the US West Coast ports to east-of-the-Rockies US markets.
“Colonet is going to tie together the productive chains of Asia and North America,” Calderon said. “We are going to connect Mexico with the world and continue opening the door of solid growth for our economy--one that allows us to not only compete, but to win in the global economy in which we live.”
Although some domestic Mexican cargo will undoubtedly move through Colonet, at least some of the estimated 2 million TEUs per year projected to be handled on the opening of Punta Colonet's first phase would likely come at the expense of the Long Beach and Los Angeles ports.
The contracts opened up for bid by Calderon included development of marine terminals at Punta Colonet as well as a rail component that would connect the port to the US mainline rail tracks in the US Southwest. The developer, under the plan at the time, would also have been expected to operate the developed port facility under a 45-year concession agreement with the Mexican government.
In January of 2009, the Mexican government promised slightly more than $1 billion to the Colonet project with plans to obtain the rest of the financing through a public/private partnership with the eventual facility operator.
At the time, several large consortia indicated they would bid on the project, including:
- A partnership between Mexican billionaire Carlos Slim Helu and the New Jersey-based terminal operator Ports America Group.
- Mexican construction firm Ideal.
- US marine terminal operator SSA Marine.
- A consortium formed by former Ensenada municipality president and Baja California Gov. Ernesto Ruffo.
The largely undeveloped future location of the Colonet port is surrounded by farmland tracts owned by established local families. Called ejidors, these communally-owned farm tracts were deeded to the local families by the Mexican government in the late 1940s and are passed down from family member to family member.
In addition to the prime coastal real estate at the projected site of the port, a large dry riverbed -- in some areas more than a half-mile wide and running from its outlet at the Colonet Bay through a gorge in the Sierra Juárez Mountains 40 miles away and the most logical location for a port rail line – is also ejidor land.
While Hong Kong-based port operator Hutchison Port Holdings originally purchased a small tract including the riverbed outlet on the Punta Colonet bay from a small group of ejidors, as of 2009, Hutchison’s Colonet property was surrounded by property either owned by Ruffo’s PCI or ejidors that were willing to sell to PCI.
As head of PCI, Ruffo also developed a very detailed plan that sought to take circumvent the Hutchison tract and full advantage of Ruffo's property commitments, land he already owned and the local terrain.
Ruffo’s and PCI’s long-range plan for the port at the time envisioned a megaport that would rival any in the world, with 18 berths that would each accommodate the largest of container vessels. Each berth, according to Ruffo, would be able to handle 850,000 TEUs annually. The port would ship about 60 percent of the containers inland via rail, handle about 30 percent as transshipments, and send the remaining 10 percent out on trucks.
It is unclear if Ruffo, or any of the previously interested bidders, is still involved or interested in any potential development of the Punta Colonet port.
Regardless of who wins the contracts, any potential bidder will ultimately have to negotiate with U.S. rail giants Union Pacific or BNSF, which control the mainline tracks running through the U.S. Southwest. UP had originally been a potential bidder, but pulled out of a proposed partnership with Hutchison in 2008. On breaking the Hutchison partnership, UP indicated it was still open to bidding with another partner on the Colonet project.
