A US$12bn megaport on central Peru’s San Lorenzo island, and another US$7bn port in southern Tacna province with a railroad connecting to Bolivia. The US$5bn-8bn Punta Colonet port project in northwestern Mexican state Baja California Norte. A US$650mn port on Costa Rica’s Atlantic coast. A transcontinental dry canal running through South America, the Shaw Group’s US$3bn Ferrocarril del Istmo rail project linking Central American nations, the Transístmico road/rail corridor project designed to link Mexico’s Pacifi c and Gulf coasts across the Tehuantepec isthmus, and the list goes on…
All of these projects are in different stages of development; indeed, some may just turn out to be pipe dreams, or some may even be white elephants if ever implemented. But regardless of the actual feasibility of these initiatives, they all point in the same direction - connectivity.
Countries are fi nally coming to the realization that pushing economic and industrial/ agricultural development may be all for naught if they can’t get their goods to market, or if their goods are not competitive on international markets due to poor internal infrastructure. The fact that it often costs more to transport goods within Central America than to ship them to overseas markets in the US and Asia, for example, is ridiculous.
Hence programs such as Mexico and Central America’s Plan Puebla-Panamá, or South America’s integration initiative IIRSA. Even countrywide programs such as Mexico’s national development plan PNI for 2007-12, or Brazil’s growth acceleration program (PAC), see billions of dollars being invested in transport infrastructure to try to get the region up to scratch, especially when compared with developing Asian nations that spend the equivalent of 2-6% of GDP on transport infrastructure, against less than 1% in many Latin American countries.
The goal is to reach the investment levels recorded by Asian countries, which spent the equivalent of 2-6% of GDP on transport infrastructureHow to fund such projects? International cooperation and multilateral lending is simply not enough. Chile seems to have the concessions concept down pat, even though it may be fi ne-tuning some aspects of it, while other countries adjust the model to their own needs and idiosyncrasies. Such is the case with Brazil’s public-private partnership (PPP) programs, or the tweaked model in Mexico’s public service provision (PPS) projects
But it’s not only about connectivity. Importing countries are placing more importance on how the exporters are handling environmental issues, including water and waste management. Panama, for instance, has undertaken an ambitious US$360mn, three phase program to build a 47km system of collectors to treat and dispose of the 280,000 m3/d of wastewater produced in Panama City.
But perhaps the country that has most come to realize the need for controlled development of hydrological resources is Mexico. Its capital city and the surrounding area is sinking due to the overdevelopment of its aquifers. The national water commission Conagua is working together with local utilities to come up with novel solutions, including recharging aquifers and searching for alternate sources of water.
Meanwhile, Brazil’s largest water utility Sabesp - often the trailblazer for most water issues in the country - has been making strides into areas of wastewater development, including expanding wastewater services, but also offering this treated wastewater at a fraction of the price of potable water to companies for industrial use, such as for cleaning equipment or as a cooling agent for machinery. Given the cost savings and the increasing emphasis on preserving water resources, this example will surely serve as a model region wide.
But to take a look at the region’s pathfi nder when it comes to water issues, we turn once again to Chile. The government, while providing a stable atmosphere for concessionaires to do business, at the same time has required high service levels and has fi ned those companies that have failed to meet previously agreed upon development plans. Further, it has turned its focus to industrial wastewater treatment, threatening companies with closure if they cannot reach the standards required by government. This has provided a signifi cant opportunity for environmental services companies, and for the future we can expect more such opportunities throughout the region as other countries strive to catch up.
