Current Events

CURRENT EVENTS

Mexican Port Delayed
Diane Lindquist - Union-Tribune 7/16/2006

Presidential election and mining prospects stall major Ensenada-area project.

Mexico's plans to develop a major container port at Punta Colonet in Baja California to transfer Asian goods into America's heartland have stalled. The proposed port at Punta Colonet would be as large as the ports of Long Beach and Los Angeles combined. Subsequently, César Patricio Reyes Roel, ports director for the Secretariat of Communications and Transportation, announced that the competition under which companies will bid to develop and operate the port was being delayed “three or four months maximum.” Several forces are prompting the postponement of the project 150 miles south of the border that is envisioned to be as large as the ports of Long Beach and Los Angeles combined. The presidential campaign has diverted the Fox administration's attention from the port project, while Mexican federal and Baja California state officials are bickering over how to structure the operation, said sources who asked not to be identified because of the political sensitivity of the subjects. Moreover, a competing project in which an Ensenada businessman has secured mineral rights to more than 74,000 acres, including the port site, is preventing Mexico from publishing the port's coordinates, the first step in opening the bidding process.

“This is a mining project. It is not a container port project,” Gabriel Chávez, the Ensenada residential real estate developer who has obtained five mining concessions in the Colonet area, said in an interview this week. He gained the concessions to extract minerals from the region several months ago under a new law that allows mining on the ocean floor. Chávez says significant deposits of titanium and iron stretch more than 30 miles from Punta Erendia on the north to Colonet and further south. The concessions' boundaries reach from coastal property at the port site 12.5 miles into the ocean. The value of the minerals, which are contained in more than 2 billion cubic meters of sand, is estimated at $70 billion, he said. “Of course, I could be wrong. It could be a tenth of it,” Chavez said. “Anyway you want to look at it, it's more important than the port.” Mexican officials say investment in the port and a rail line that would run to the U.S.-Mexico border east of Mexicali could total $4 billion to $5 billion. They expect additional infrastructure and other investment needed to create a city with as many as 200,000 residents supporting the port operations could run as much as $22 billion. Chávez, who was the president of a group of Ensenada business leaders called Vida Enseñadense that spurred the move to develop a port and rail line at Colonet, said his motivation for the mineral project is to bring added-value industrial activity to the region. Originally, he said, he tried to persuade communal ejido landowners to join him in developing the port project. But when most backed off, he was approached by mineral interests in Baja California who convinced him that extracting the titanium and iron would be more beneficial for regional development than the port. Chávez said he has three partners and potential investors lined up, whom he declined to identify. “We have not only buyers but companies willing to undertake the project. They don't care about a port,” he said, although he added that some kind of port operation would help his operation ship the minerals.

Under an agreement with the Autonomous University of Baja California, he said, students are conducting studies to determine the type and extent of the mineral deposits. “It usually takes six to seven years to explore, drill and put the minerals on the market. We want to start exploitation before 22 months,” he said. Chávez notified Mexican officials involved in the port project of his +mineral rights concession only recently. “I thought it was my responsibility to explain this before they went public (with the bidding competition),” he said. “They thought I was coming to the party to kill the clown.” The postponement of the bidding has prompted concern among maritime and rail companies interested in a piece of the project. “People are getting concerned about the longtime viability of the project,” said Karen Hutchens, a public affairs consultant in Mexico. “I think everybody's waiting for the bidding process to move forward and are thinking this will be a good project,” said Albert Fierstine, the former business development director of the Port of Los Angeles who now heads a consulting firm. Jesús Lara, a Punta Colonet landowner who has been retained to represent ejido members in the matter, said, “The community is upset that it's stopping a project that will have benefit for them, the state and the country.” “How can you explain that the minerals are located where there's interest for the port?” he asked. Chávez denied implications that he is promoting the mineral development to extort money.

“I'm not for sale,” he said. Sen. Hector Osuna Jaime, who represents Baja California and is chairman of the Mexican Senate's transportation committee, said the claim to the mineral rights causes a problem. “If they want to take advantage, it's unfortunate,” he said. But, he added, administration officials are trying to find a solution that will satisfy all parties. “Everybody needs to understand that everybody could win,” Osuna said.
In his statement delaying the bidding process, federal port director Reyes said the government has abandoned the plan to dedicate all activity to container ships and would be willing accommodate mining operations. “Without a doubt,” he said, “I believe the projects could exist together. The mineral part cannot function without a port, thus we are speaking with them and hope we can secure an important accord where both parties can have their activities.” The Punta Colonet situation has highlighted some issues that weren't anticipated with the legislation allowing the assignment of mineral rights under the sea, Osuna said." The government,” he said, “is going to think twice about granting these concessions in the future." Diane Lindquist: (619) 293-1812; diane.lindquist@uniontrib.com

Punta Colonet to be built from scratch, official says
By Diane Lindquist UNION-TRIBUNE STAFF WRITER March 28, 2006

ENSENADA – Mexico in the next two weeks plans to publish the dimensions and specifications of the megaport it expects to be developed 50 miles south of Ensenada at Punta Colonet. One to two months after publishing the footprint, government officials will offer the project up for bids, Ensenada port Director Carlos Jáuregui González said in an interview. It is expected to become Mexico's largest port, he said. Port development and operating concessions will be paired with a concession to build and operate a rail line that will run 180 miles north and connect to the U.S.-Mexico border east of Mexicali, he said. Together, the projects are expected to have a value of $4 billion to $5 billion. In the interview, Jáuregui offered the most details yet on the highly anticipated Punta Colonet project. The development, which is being pushed by global shippers and major retailers such as Wal-Mart and Costco, is expected to relieve congestion at the ports of Long Beach and Los Angeles, which handle 40 percent of the cargo shipped into the United States and 80 percent of U.S. imports from Asia. A dispute between shipping lines and dock workers in 2003 led to a shutdown of all major Western U.S. ports, prompting shippers to seek alternatives south of the border.

Punta Colonet, currently a desolate, uninhabited inlet 150 south of San Diego, is expected to receive ships carrying containerized cargo mostly from Asia. The containers will be transferred to rail cars and sent to destinations in the interior of Mexico and the United States. Unlike most other infrastructure projects Mexico has offered in a spate of privatizations over the past two decades, the Punta Colonet port and railroad development will be built from scratch, Jáuregui noted. "In this case everything will be new," he said. "The difference is that the developers will build everything." The port will occupy nearly 7,000 acres, 97 percent of it water and 3 percent tidelands, he said. It will be configured in a U shape, with one leg making up a breakwater to protect operations from ocean waves. Officials of the Mexican ministries of communications and transportation, the navy and the environment – which along with the state of Baja California are overseeing the development – are putting final touches on the rules under which the project will be bid and the terms that will determine the winners.

Once bidding terms are published, Jáuregui will embark on a campaign that will take him to the United States, Asia and Southeast Asia to encourage private enterprises to enter the bidding for the long-term development and operating concession. The winning bid "will be the best proposal for handling the container traffic and the volume that will be provided," he said. "The development will have to be done by phases. Obviously the construction of the breakwater and the dredging (for the port) will be one of the initial investments." Work on the project is expected to start by 2008 and take four years. Once in operation, Punta Colonet will come under the jurisdiction of the Port of Ensenada. It will be a specialized port, handling only container ships. Container traffic currently handled at the Port of Ensenada, which is a mixed-use port, will be shifted to Colonet by 2017 when the current operator's concession ends. Other types of cargo will be moved to the port at El Sauzal north of Ensenada, leaving Ensenada for cruise ship and tourist activities.

After Punta Colonet's first phase of development, the port could handle 1 million TEUs – or 20-foot equivalent units, the standard measurement in the shipping industry – and as much as 6 million TEUs by 2025, making it the largest port in Mexico. Development of Punta Colonet will not only include the port and the rail line but also a new city that will support port operations. "We'll have to develop a new city or urban settlement," he said. "Where are the workers going to live? What will be the cultural and social supports? All types of agencies, universities and institutions will be involved." Environmental studies will be mandatory, he said. Assessments conducted for the rail line will seek to ensure that indigenous communities are not harmed. "This is an opportunity for us, including investors and the community, to provide a project that will promote sustainability," Jáuregui said. "We have to let the people know there's not going to be another pollution source. Rather, this project will generate
economic activity and jobs and a better quality of life."

Mexico, top private interests look to revamp Pacific ports south of the border
by Will Weissert, Associated Press 3.21.2006

MEXICO CITY – Mexico and major shipping interests are bolstering Pacific ports south of the border, hoping to catch future runoff as an increasing tide of Asian cargo sails toward already clogged ports in California. Mexican officials in coming weeks plan to study the feasibility of turning Punta Colonet – a sparsely populated, wind-blown bay on the Baja Peninsula 150 miles south of the U.S. border – into a super-port on par with twin facilities at Los Angeles and Long Beach, the largest western port complex in North America. he new development at Punta Colonet could handle 1 million TEUs annually after its first phase of construction and more than five times that amount in the longer term, said Carlos Jauregui, executive director of the Ensenada port, a facility 50 miles south of the U.S. line that would likely administer the project at Punta Colonet. Mexico plans to offer long-term contracts to private interests who would build and manage the port. Jauregui said preliminary estimates put the cost – including a rail link to the U.S. border – as high as $5 billion. Work isn't expected to begin until at least 2008, and would likely take four years. “By then, we should see a major overflow in containers that Los Angeles-Long Beach won't have the capacity to handle,” he said. Pope said officials at Long Beach are working to increase efficiency so as to better keep up with demand. “No one has really given a prediction saying this is going to be the year Los Angeles-Long Beach can't accept more cargo,” he said. Long Beach's port is deep enough to receive huge ships carrying 8,000 containers. Whether the project at Punta Colonet would by deep enough to handle container ships that large is unclear. Proponents say major global shipping interests have supported the plan. It would be good news for top retailers like Wal-Mart Stores Inc., Mexico's largest retailer, and others who want their goods delivered faster. But approval could depend on who replaces President Vicente Fox, who leaves office in December. Major Mexican government initiatives often fall apart after an administration change.

Cross-Border Plan Offered by Health Net
By Abigail Goldman, Times Staff Writer
March 15, 2006

    Health Net of California is expected today to announce the state's first private insurance plans for people who want to see doctors either in Mexico or the USA.
       The company said several new plans costing as little as $75 a month would be offered directly to individuals and families, rather than through employers. The plans would be available in Los Angeles, Orange and Ventura counties Five years ago Health Net began offering employers group insurance plans that allow workers to see doctors locally or in Mexico, where healthcare is less expensive and preferred by some immigrants to the U.S. Until now, however, families that buy insurance privately have
had few affordable options.
    Woodland Hills-based Health Net, California's third-largest for-profit HMO, said it was able to guarantee a high level of care by working with Sistemas Medicos Nacionales, the only Mexican health plan licensed by the state of California. The two have collaborated in employer-sponsored plans offered by Health Net.
    Mexi-Plan, one of five new cross-border Health Net plans, began as a collaboration with the Mexican Consulate General in Los Angeles, which found that after immigration issues, access to health coverage is the top concern of Mexicans living in the Los Angeles area. Under Mexi-Plan, the least expensive plan among Health Net's new offerings, a person age 19 to 39 would pay $75 a month. Families would pay about $300.
    A visit to the doctor's office in the U.S. would cost the patient $15, generic medications would require a $5 co-pay and hospital visits would be covered at 75% with a $2,500 deductible and a maximum annual out-of-pocket cost to the member of $5,000.   In Mexico, however, members would pay less, with a $5 co-pay for office visits, $5 for generic medications and 90% coverage for hospital stays with no deductible.

More time to procrastinate! Passports won't be required at the end of 2006. The government just figured out they need more time. Maybe they plan to set up some Senate hearings and really waste our tax dollars.

This is what they now plan - You will need a passport if you travel by air or sea to South America, the Caribbean and Bermuda after December 31, 2006. After December 31, 2007 passports are required for all border crossings. The logic seems simple! Terrorists have agreed not to drive across any borders during 2007. They are only allowed to fly or take a ship. The Department of Homeland Security is working out the details about charter boats.

To think the good folks at the Department of Homeland Security have discovered that requiring a passport will stop terrorists. I wonder how much we pay these folks -- it can't be enough! By the way, don't try to call these folks! They are so afraid of their own wire taps that they don't take phone calls.

New laws on the serving of alcohol are going into effect in the entire state of Baja California. The thrust of these laws is to prohibit the "2 for 1" and "all you can drink" promotions that are so popular with the teenagers that flock into Baja for holiday weekends. The details of the laws have not been released!

I'm sure this is going to stop the teenage crowd from drinking. Sure! The government official who came up with this idea needs to join the good folks at Homeland Security. I'd feel much safer if terrorists were required to carry passports and not drink and drive.

For the oldsters, remember dropping down the off-ramp and having to make the quick U turn to head to the San Diego border. Someone got the idea to put the off-ramp on the over side of the interchange. Say adios to the famous U turn. Now, if they would only fix that intersection near the border!

Many National Holidays will now be observed on the nearest Monday as in the United States. The offical reason is that: This will allow Mexicans to enjoy the same benefits that U.S. residents - the "three day weekend".