Port of La Unión
El Salvador‘s transportation infrastructure includes a road network, the Port of Acajutla, which is fully operational, and the Port of La Unión, which was built two years ago and it is not yet in operation, the El Salvador International Airport (AIES), and the Ilopango Airport. The Ilopango Airport hosts national civil and military aviation operations, and an inoperative and deteriorated railroad system.
Foreign trade follows the following routes: towards Central America, by land; by sea, trade uses the ports located both on the Pacific and Atlantic Oceans. On the Pacific side, the ports of Acajutla are used for El Salvador and Port Quetzal for Guatemala; the Port of La Unión is to enter operations in the near term. The other route is through the Atlantic using Port Barrios in Guatemala, and to a lesser degree Port Cortés in Honduras. By air, trade uses the El Salvador International Airport (AIES). The railroad is not in use.
The port of La Union offers high potential as an alternative or additional container terminal serving the South of Honduras. The reduced depth of the entrance channel (7.4 m at medium low tide versus 9.5 m for San Lorenzo) and the lack of shore cranes are the main constraints. Regarding the use of La Union to import relief cargo into Honduras: The port will profit from the improvement of road access to San Lorenzo (Canal Seco or Corredor Logistico) which was in progress at the time of the assessment. The lack of an operator has meant the port had been handling lower than expected traffic levels since it opened in 2009 and has not received any container traffic at all since 2013.
In order to travel from La Unio´n to Puerto Corte´s on Honduras’ Caribbean coast (that is, on the Atlantic) there are a mere 100 kilometers of highway in Honduras yet to be built. Once done, this would create what proponents call an “Interoceanic Dry Canal.” If this stretch of road were paved and were to end in the port of La Union, a container truck could go from the Pacific to the Atlantic in seven and a half hours. That is a competitive alternative to the Panama Canal, which is the other great interoceanic route.
The basic construction for the Port of La Unión was finalized in April 2008. It is a multi-purpose ocean terminal specializing in container traffic. The terminal did not immediately enter into operation, and would require additional investment in infrastructure and port equipment to do so. According to the loan agreement signed with the Japanese government for its construction, operations of the port were to be granted as a concession to a private entity specialized in managing and handling ports. This entity must invest in equipment, warehousing facilities, etc. The Port is a third generation terminal which has 3 docking stations, 240, 220 and 360m in length, 9.5, 14 and 15m in depth, respectively, and able to handle specialized vessels of up to 4,800 TEU.
In 2009, the President of El Salvador inaugurated the newly constructed Port of La Unión, consisting of a 560-meter wharf with berths for two ships and an open storage area of approximately 290,000 square meters. The Comisión Ejecutiva Portuaria Autónoma de El Salvador, (CEPA), the Salvadoran government entity responsible for developing and managing transportation infrastructure in El Salvador, intends to expand operations at the port under a public-private partnership in the form of a 30-year concession to a private company specializing in port operations. El Salvador’s National Assembly passed a concessions law in 2011 that enabled the port concession process to move forward.
Five rubber-tired gantry cranes for container mobilization and stacking were acquired in 2010. In spite of the new facilities, however, no ship operators had yet begun to call at the Port. CEPA, the entity responsible for running the Port, wanted to develop the Port operation under a public private partnership (PPP) in the form of a long-term (30-year) operating concession to a company specializing in port operations.
Under the anticipated concession arrangement, CEPA would maintain certain responsibilities at the port, such as vessel traffic management and navigation, dredging and maintenance of the port’s approach channel, and providing support tug boat and pilot boat service to the shipping vessels that access the port. CEPA is receiving advisory services from the International Finance Corporation (“IFC”) of the World Bank Group to facilitate the port concession process.
CEPA contracted with the International Finance Corporation (IFC) to advise on the concession, including preparation of terms and conditions for the tender, and the recruitment of port operating companies to participate. A law permitting the concession that was requested by IFC has been passed by the National Assembly and the concession can now go ahead. The concession as proposed in the new law will include the operation of the Port for thirty years and the development of lands around the Port. In addition to operating the Port, the law specifies that the concessionaire invests $30 million in new infrastructure within five years.
The concessionaire will be required to implement certain upgrades to the container terminal, including pavement improvements and the addition of ship-to-shore cranes, and the IFC will contract for engineering and other studies to determine the likely cost and extent of these projects. In addition, the IFC has determined that CEPA will be required to make improvements in other areas to make the concession attractive to potential operators and ensure the successful operation of the Port. Providing an independent assessment of the responsibilities of CEPA and the costs involved will add credibility to the concession project and assist in its completion.
The shipping companies CMA/CGM and China Shipping were the first to make their operations in the Port of La Unión official. They will dock at the Salvadorean port once a week, reported the country's state-owned ports authority (CEPA) 05 July 2010. “CMA/CGM, the third-largest container shipping company, made an agreement with China Shipping, one of the largest Chinese transport companies, to operate at this port, located In the Gulf of Fonseca”.
By November 2016 no bids were received for a possible concession to operate the Port of La Unión in El Salvador, meaning a public-private partnership contract for the port is now extremely unlikely. The lack of interest seems to stem from the belief that there isn’t enough traffic to support terminals at both La Unión and Acajutla. Commenting on the lack of bids, Nelson Vanegas, president of the Autonomous Port Executive Commission (CEPA), said: “It seems that it [the terminal at La Unión] will remain inactive, more than seven years after being opened."
In August 2018, El Salvador’s Comisión Ejecutiva Portuaria Autónoma (CEPA), or Autonomous Port Executive Commission, was to issue a new tender for the Port of La Unión Centroamericana (Port of La Unión). The decision was revealed by CEPA’s president, Nelson Vanegas 29 April 2018.
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