MEXICO CITY: The Mexican government is pumping $5 billion — more than 77 billion pesos — into its network of 117 ports, as the country’s rising middle class demands more imports and Mexico rises as a regional manufacturing powerhouse.
President Nieto is pushing forward 25 new projects — including an expansion at the port of Veracruz which has long-suffered from lack of developable land — across its port system, said Guillermo Ruiz de Teresa, general coordinator of Mexico’s ports and merchant marine fleet. The projects are part of the government’s broader approach to manage and expand Mexico’s ports as a system, Ruiz de Teresa said at the American Association of Port Authorities’ annual spring conference in Washington, D.C. Monday.
It may seem like common sense to some, but it’s a new approach for Mexico, he said.
“Before this administration,” Ruiz de Teresa said, “the government approached ports as isolated units.”
The result was a playing field where each port would compete with every other port for business and ultimately lose business in the process. President Nieto’s new approach aims at curbing that in-fighting, Ruiz de Teresa said.
“We think the ports work in a better way if we use them as part of a logistics chain,” he said Monday. “We want to use all the capacity of the ports at the same time.”
This will be accomplished under what Ruiz de Teresa called Mexico’s “two-port system.”
According to Ruiz de Teresa, the government’s new approach will “consolidate” ports into two groups: Pacific Coast and Gulf Coast. Ports along each coast will be approached as one “articulated port system.”
“One port with different doors,” he said.
The first step will be equalizing tariffs at ports across the board, which Ruiz de Teresa said should occur later this year.
Other steps will include at least 25 major projects at Mexican ports on both the Gulf and Pacific coasts, most notably an expansion at the Port of Veracruz which will triple the port’s capacity over the next 25 years.
The port at Veracruz is neither Mexico’s largest nor busiest container port, but my Ruiz de Teresa’s estimation, “it is the most important.”
Expansion at the port will increase the facility’s capacity to 88 million tons , add 35 new berths, include two new turning basins, a logistics attention center for ground transport and the construction of 19.5 kilometer double track railway bypass.
The first stage is underway in Veracruz with the construction of a sea wall designed to break waves coming in from the Gulf of Mexico. That first stage is slated to be completed by 2016. A second stage is scheduled for completion come 2030.
Work on the port in Veracruz is expected to run Mexico roughly 27.5 billion pesos, close to $2 billion.
Veracruz may be the most important, but it’s not the only project planned for Mexico’s ports.
Other key projects coming down the pipeline include new dock construction among other improvements at Seybaplaya port in Campeche state, the construction of deep harbor oil platforms at Altamira port — a first for a Latin American port — and port-wide modernization at Ciudad del Carmen, among others.
It will cost billions of pesos, said Ruiz de Teresa, but it will be worth it to see Mexico’s ports help the country realize its potential as a transportation hub.
In the past two decades, commercial cargo in Mexico has grown twice as fast the nation’s GDP, reaching 5.1 million TEUs last year.
Nevertheless, only 32 percent of all Mexican commercial traffic moves by sea, Ruiz de Teresa said, well behind the U.S. and Europe at 44 percent and 48 percent, respectively.
“For years, Mexico has been seen as a crossroads for trade,” he said. “But, we are still below our true potential.”
