Esteban Diez, Transport Principal Specialist, Inter-American

Infrastructure and Port Development in Central America: Role of the IDB

Esteban Diez RouxLondonMarch 5th 2014


http://www.iadb.org

The Inter-American Development Bank Discussion Papers and Presentations are documents prepared by both Bank and non-Bank personnel as supporting materials for events and are often produced on an expedited publication schedule without formal editing or review. The information and opinions presented in these publications are entirely those of the author(s), and no endorsement by the Inter-American Development Bank, its Board of Executive Directors, or the countries they represent is expressed or implied.

This presentation may be freely reproduced.

http://www.iadb.org/


General Vision of the IDBGeneral Vision of the IDB

Port Sector in Central America

Procurement

Table of Contents


Main source of financing for the sustainable development of Latin America and the Caribbean

Founded in 1959, the IDB is the oldest and largest regional development bank.

48 members: 26 borrowing members and 22 non-borrowing members. From 1961 to the end of 2013, the IDB has approved US$188.62 billion

in loans and guarantees. The IDB obtains its own financial resources from its 48 member

countries, borrowings on the financial markets, and trust funds that it administers, and through cofinancing ventures.

The IDB’s debt rating is AAA, the highest available.


Public Sector lending with Sovereign Guarantee Investment Loans Policy Based Loans Emergency Loans

Non-reimbursable support: Technical Cooperation: technical studies & project preparation:

InfraFund; FIRII Fund; AquaFund; SECCI Funding Donor Trust Funds (e.g. Korea Technology & Innovation | Korea Poverty Reduction)

ESW: Economic Sector Work

Non-Sovereign Guarantee lending Private Sector Loans Public sub-national entities qualified for NSG

Inter-American Investment Corporation Multilateral Investment Fund

Modalities of Bank Support


2013 US$14.0 billion in approved loans and guarantees.

Loans by topic. 1961-2012Loans by region, 2013

(US$14.0 billion)

CAN$2.15 B

15%

CCB$0.37 B

3%

CSC$6.16B

44%

CID$4.72B

34% Reform and Modernization of

State16%

Infrastructure and Competitiveness

50%

Social Development34%


Typical Projects• Road expansion/rehabilitation • Public transportation (BRTs, Subways) • Ports, airports

Typical Procurement Aspects• Civil works (infrastructure construction, rehabilitation, tunneling, bridges, ports )• Buses, rolling stock, equipment • Technical consulting services

Highlights of 2013 Transport Lending in CA• Nicaragua: Support for Transport Sector III (US$ 91.5 M)• Costa Rica: Transport Infrastructure Program (US$ 450 M)• El Salvador: Mesoamerican Pacific Corridor Improvement Program (US$ 115 M)• Honduras: PPP Atlantic Corridor Supplementary Financing Program (US$ 17.2 M)

Transport Operations

Approvals in Transport 2009-2013(US$ million)


General Vision of the IDB

Port Sector in Central AmericaPort Sector in Central America

Procurement

Table of Contents


Central America and Dominican Republic

Ports in the Study


Two large transshipment hubs in the DR and Panama

2 of 11 Atlantic ports offer direct service to Asia and 7 of 11 offer direct service to Europe

All Pacific ports must transship through Panama to connect to ports in the Atlantic and vice versa.

Most trade goes to the US and Europe

Poor road infrastructure and difficult geography raise appeal of sea shipping

Current Caribbean Port System

Actual liner services that visit two or more ports among those in the study


Connectivity network for ports in StudyEstimation of the weekly number of TEUs that needed to be moved by sea in 2010 between countries in this study


Most trade is with countries out of the region


Infrastructure Limitations Only four ports capable, based on berth depth, to receive Post-Panamax Vessels (two in Panama one in

El Salvador, and one in the DR)

Only four ports can receive Panamax vessels (two in Costa Rica, one in Guatemala and one in Honduras.

Five ports don’t have operational cranes, including one of the Post Panamax ports (Rely on geared ships)


Impact of the canal

Little impact on ports in the study

They need to improve port efficiency, integration with customs and other services and modernize their infrastructure

Might need to accommodate bigger feeder vessels

Better road connectivity

There are plans for transshipment ports in Costa Rica, El Salvador, Guatemala and Honduras

There will potentially be a mega hub on the Atlantic side– Likely at Colon in Panama


Opportunities for Investment La Union – El Salvador

– Awaiting a concession

Puerto Santo Tomas de Castilla – Guatemala– Evaluating the development of strategic projects such as the improvement of the access route

for the port (access directly to the main road bypassing the town), moving the cruise terminal outside the current cargo areas, and the expansion of the current container and grains terminal.

Puerto Limon-Moin– An investment of USD 80 million is planned for the modernization of the current passenger

infrastructure and the development of new areas for touristic purposes once new container terminal is complete.

Puerto Acaluja – El Salvador– Planning to extend C berth by 90 meters, increase some berths’ depth to 15 meters, develop a

new container berth directly connected to the yard, and acquire a new Post Panamax crane.


Opportunities for Investment Puerto Cortes – Honduras

– Planning to have a new container terminal to be given as a concession to a private operator for its development and management.

Puerto Castillo – Honduras– Planning to expand the current terminal by adding 100 m of berth for more flexible dockage operations.

Several investors have showed interest in the port for activities such as ethanol production, exporting of iron scrap, a refinery, and a tourist terminal.

Puerto Manzanillo – Panama – Planning a USD 300 million investment to build 3 new berths and add 38 ha of additional container

storage in order to reach a total annual capacity of 4 million TEUs and enabling the port to handle new-panamax vessels.

PSA Panama International Terminal – Panama– Planning 800 m of additional berth, expansion of the container yard and 10 new post-panamax STS

cranes. This expansion would provide 2 additional new post-panamax berths and increase the port’s capacity to 2 million TEUs.


General Vision of the IDB

Port Sector in Central America

ProcurementProcurement

Table of Contents


Investment loans (SG): execution

Standard project procurement: Civil works Equipment Consulting services: technical & institutional strengthening

Competitive bidding Turnkey vs. split contracts/works

Contact Executing Agencies (Government Ministries) for procurement requirements, bidding documents, contract information, procedures & payments

Actively engage local embassy to identify opportunities Upstream pipeline projects


Business opportunities

IDB (preparation) ≈ 5% Technical Cooperations (TC), pre-investment:

Contracts with IDB, mainly consulting services, support of project preparation (small/moderate value and short term), usually include feasibility studies, due diligence, etc.

In-country (execution) ≈ 95% Loans and or TCs

Competitive biding processes with IDB borrowing country as the client (larger value, longer term, formal competitive bids, e.g., goods, services, civil works, equipment, etc.)

Subcontracting with other firms (as partner, as a joint venture, as a supplier)

Where to start (companies)? Contact Executing Agencies (Government Ministries) for procurement

requirements, bidding documents, contract information, procedures & payments

Actively engage local embassy to identify opportunities


Inter-American Development Bankwww.iadb.org

Esteban Diez Roux [email protected]

Transport DivisionInfrastructure and Environment Department

http://www.iadb.org/

mailto:[email protected]

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Esteban Diez, Transport Principal Specialist, Inter-American

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