José Martínez
President of Mexican Association of Port Infrastructure (AMIP) and CEO
Marinas JMH
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Insight

Port Success Linked to Private Investment

Tue, 11/01/2016 - 09:15

Cancun’s impressive Nichupté lagoon is a veritable jewel in the crown of Mexico’s Caribbean coast. Its iridescent waters shifting between azure and jade, cerulean and chartreuse, host over 400 docks in a synthesis of nature and nautics. Equally, the Boca del Rio port in Veracruz acts as the heart of the district, supplying the veins of the bars, restaurants and shopping malls flowing across the coastline. This fusion, says Julio Martínez, President of AMIP, is one of Mexico’s most valuable assets. “Piers and beach promenades serve as a communal space, in the same way as beaches. They are a space in which the community can come and take a leisurely walk in all conviviality,” he says.

AMIP is an organization that brings together the different voices of the maritime industry, from environmentalists  and engineers to lawyers and contractors. It has led a number of developments, like that in Altata, Sinaloa, where it built a pier of around 2km in length. On the day the pier was inaugurated, it received a staggering 80,000 visitors and today it welcomes 8,000-10,000 tourists on a daily basis. These are projects that have the opportunity to change the life of the country’s population, Martínez says, as it is where the maritime and terrestrial environments collide.

The establishment and expansion of ports have gained prominence since the country introduced its market- opening Energy Reform just over two years ago. Besides the expansion of the all-important Port of Veracruz, other work is being done as investments target new projects.

Among the projects is the new port of Matamoros that will address expected demand from oil exploration in the northern part of the Gulf of Mexico. Altamira, developed 30 years ago, is a noted industrial port focused on the petrochemicals industry and processes containers. Its security system is being expanded. Another important port that is garnering attention is Tuxpan, especially regarding the investment made by the private sector in the development of the new SSA Container Terminal. “While there have been major budget cuts, these do not severely impact the development of ports, only the share between the public and private sectors,” Martínez says.

Besides oil, the ports are of strategic importance to the country’s automotive sector considering Mexico produces 2.4 million vehicles annually, of which 900,000 or so are exported. The ports also receive imported auto parts to fuel the country’s industry. “The automotive industry contributes a larger share to the Mexican economy than oil, so we need communication nodes and a fluid mobility system,” says Martínez.

The sector has undergone important changes since 1994, when the private sector was given permission to participate in infrastructure development. “This crucial  policy transition channeled private investment into ports and railroads, which has allowed the sector to grow at twice the rate of GDP,” says Martínez. “I believe the success of the port industry today is intrinsically linked with the sector’s opening to private investment, without which today’s infrastructure environment might look very different.”

Most of the country’s freight is moved by land but Martínez says that when the distance between the two locations exceeds 500km, transport modes such as rail and sea are much more efficient. Although Mexico has 14 highway corridors, many of the bypasses and bridges are outdated or lack proper development. The country also has 22,000km of railroad infrastructure, which dates back a century.

AMIP believes the focus of development should be on creating greater numbers of horizontal corridors to prevent saturation. Martínez suggests increasing maritime traffic, since this would represent a much cheaper option. “Horizontal corridors should be developed to complement the existing vertical ones,” he says. “The focus should be on the development and efficiency of ports.”