 RISING STARS: UNEXPLORED FIELDS OF INVESTMENT |
| Mega ports: an ancient idea in a new world |
It was clear to Christopher Colombus to make Santo Domingo the first city of the Americas. Likewise, it became equally clear to the emerging colonial powers of England, France and Holland to attempt to take over the Hispaniola Island via state financed piracy or outright military invasions while the imperial Spanish Crown was determined to protect and defend the Dominican Republic, the key gateway to the Caribbean sea. Yet it has not been until very recently that Dominicans are finally set to taking advantage of their privileged geographic location.
Mega port is the new word in the twenty first century game of globalized free trade. In other words, enormous seaports supported by airports and surrounded by duty free industrial parks (Free-Trade-Zones), with a capacity to organize and redistribute marine transported cargos can become efficient centers of manufacturing and commerce. "Due to the enormous flux of marine traffic between North and South, a whole process of freight consolidation is taking place before our eyes. This is engendering interesting new opportunities for strategic geographic locations that can play around with the distribution of cargo into smaller -and faster- ships or other means," points out Ricardo Pellerano, co-owner of one of the biggest law firms in the country, Pellerano & Herrera, and an expert in maritime transport. But he warns that Jamaica and Puerto Rico are in the mega port race as well. So far, the DR has three mega port projects.
One of them is Punta Caucedo, situated just 23 miles out of Santo Domingo. This mega port pretends to be a major Free-Trade-Zone for producing, storing and shipping cargo. It is expected to rival other huge ports in the region, measuring up to Colon Port in Panama. Another mega port project is in San Pedro de Macoris, in the eastern part of the island. This port will be the perfect complement to the growing manufacturing industries in the region and the ever-hungry-for-more-services tourist industry.
But the one in the north, Montecristi, right next to the border with Haiti, is the most ambitious project of them all, already boasting a 1.4 billion dollar investment joint venture of American and French firms. In addition to the benefits this project offers-cheap Haitian labor, Dominican political stability, key geographic location- the Montecristi Mega port expects to become the biggest commerce and freight-shipping center in all of Central America and the Caribbean. But this project entails more than just an enormous seaport. The Montecristi project includes a space for an industrial shipyard, an international airport, a Free-Trade-Zone arena for manufacturing, and an ecological reserve along with top quality tourist resorts. The company that won the bid for this project, Balaguiere-Transdominicana de Desarrollo, includes board members and advisors from prestigious international firms to make sure the mega port dream does not go astray. For example Maersk and Evergreen are in marine transportation; Carnival and Four Seasons in tourist management; Grupo Egis in airport control; Nusebe-Emirat d'Ajman in Free-Trade-Zone manufacturing, etc. Just the size of these investors grants the project credibility, due to their experience in the field, available resources and extended business relations.
These mega ports are designed to be self-sufficient trade centers, where the cost of commerce is considerably reduced by having the industrial zone and shipping facilities all in one spot. It all just goes to show how these mega ports can have an all included self-sufficient economy within themselves. | | The new gold era |
The Dominican Republic holds the oldest and highest mountains in the Caribbean Sea, which contain some of the richest mineral deposits in all of Latin America. The land holds an abundance of gold, nickel, bauxite (a precious stone similar to turquoise but lighter in color) as well as minerals for construction purposes such as limestone, gypsum (for making plaster) and salt. As with coffee, Mr. Mejia's government is not waiting any longer to make good use of the country's natural resources. It is determined to put the mines -that have pretty much been out of use in the last decades- back in business.
Hence, one of the first things the new government did when it took office in August 2000 was to create the Corporate Mining Union, an institution whose main purpose is creating favorable conditions for foreign investment in this sector. "One of the more interesting projects has been the creation of Industrial Mining Free Zones, in which there are incentives to process, commercialize and transport the mining resources," asserts Mr. Miguel Peña, president of the UCM."The State is going to set the legal bases and coordinate the efforts to establish the mining free trade zones but it is also going to build infrastructure (roads, ports, etc.) to help Dominican resources reach international markets," he adds.
The fourth largest gold mining company in the world, Canadian based Placer Dome, has won the bid for the Dominican mine La Rosario and it is contemplating making a 300 million dollar investment in exchange for a 50 year contract in which the government would be entitled to a 5% royalty over the benefits on gold extraction.
| Preparing for an open sky |
Another pro-business maneuver of Mr. Mejia's government has been allowing the national airports operate under private hands via 25-year concessions. If the Dominican Republic is strategic for marine transportation, why not make it a center for air travel as well? And who can do this better than professionals? By conceding all operational rights to Aerodom, an international corporation consisting of local and foreign investors such as the Vancouver airport and the Italian De Giglio construction company, the government has avoided the heavy financial burden of upgrading state owned airports to meet burgeoning new tourist demands. In exchange for 25 year operating rights, Aerodom is committed to investing 250 million dollars in renovating the airports, of which 60 million dollars have already been spent. "This is a booming business," says Mr. Abraham Hazoury, president of Aerodom. "The success of our project can generate a concession based model that really functions. A model in which the State can transfer all the logistical operations instead of transferring ownership itself (hence, outsourcing). This system allows the Government to enjoy all the benefits of privatization but without losing ownership over the properties that many government cabinets find essential". The government is not only pleased by not having to pay for infrastructure (which it will inherit 25 years later) but also by the company's well-structured bond emission for its financing supported by the Inter-American Bank. |
