- The Washington Times - Wednesday, September 3, 2008

ENSENADA, Mexico

President Felipe Calderon opened bidding last week for construction of a huge new seaport that could eventually compete with Los Angeles-Long Beach, the largest port complex in the United States.

Mexico’s $5 billion Punta Colonet project would transform a wind-swept bay 150 miles south of the U.S. border into a booming port city, creating an estimated 80,000 jobs, drawing freighters from Asia and funneling manufactured goods north.

“We’re looking to be sure we don’t fall behind in making Mexico a strategic logistics platform for trade and global investment,” Mr. Calderon said while touring the foggy beach where the port will stand.

A planned railroad would link Punta Colonet to the United States, allowing freight to skip Southern California traffic and head directly to points across the Midwestern U.S., including Chicago. Planners have yet to determine where the tracks would cross the border - although El Paso, Texas, and Yuma and Nogales, Ariz., have been mentioned.

The port would be the largest infrastructure project of Mr. Calderon’s administration, which has pledged hundreds of millions of government dollars for highways, railroads and airports in the past year in an effort to create jobs and pump cash into Mexico even as the world economy slows.

At Punta Colonet, however, Mr. Calderon is seeking private bidders to build the port and accompanying railroad before running it on a 45-year operating lease.

The bidding process should conclude late next year, and the port should start operating in 2012, said Jose Rubio, project director for Mexico’s Baja California state, which is working with the federal government to develop the port.

By 2020, the port should be able to annually handle 6 million TEUs, or 20-foot equivalent units, a measurement used to estimate container traffic - more than double the nation’s current freight capacity, Transportation Secretary Luis Tellez said.

Los Angeles and Long Beach meanwhile processed a combined 15 million TEUs in 2007 - some 40 percent of all freight entering the U.S., including 80 percent of imports from Asia.

Mexico’s bid for a slice of the U.S. shipping market hangs on the continued growth of Pacific shipping traffic, now stalled by a struggling U.S. economy and higher fuel costs that have made importing more expensive.

But long-term forecasts are bright: Long Beach expects its freight traffic to double by 2028, according to port spokesman John Pope, and the two ports plan to spend more than $2 billion on infrastructure improvements to prepare for it.

Punta Colonet hopes to steal away some of that new business - but it will be only one competitor among many. A massive expansion at Canada’s northern Prince Rupert Port will also use rail to target U.S. markets. Meanwhile, a $5 billion expansion of the Panama Canal will make it easier for Asian freight to reach Miami, Atlanta and other southeastern U.S. cities.

The port, isolated in the relatively remote desert around Punta Colonet, will rely entirely on its proposed rail line to the U.S. - which could stretch as far east as the Mexican state of Chihuahua, across from New Mexico and Texas, Mr. Rubio said.

Punta Colonet would serve “more like a relief valve for us than a direct competitor,” said Theresa Adams Lopez, spokeswoman for the Port of Los Angeles. “There are plenty of boxes to go around.”

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