The Interoceanic Consortium of Guatemala began the development of the San Jorge International Logistics Centerthe first phase of a project that seeks to position the country as a regional hub for trade and logistics. The initiative plans to move cargo between the Atlantic and the Pacific in about 4.5 hours and compete for part of the container market that other international corridors use today.
The Interoceanic Corridor of Guatemala began the execution of its first economic component with the development of the San Jorge International Logistics Center, an infrastructure designed to integrate port, airport, railway, industrial and commercial services in a single complex, as part of a strategy to strengthen the country’s logistics competitiveness.
Rolando Melgar, executive director of the Interoceanic Consortium of Guatemala, explained that this center constitutes the first stage of a project that will be developed gradually and that It will later incorporate the San Luis Logistics Center and the railway and multimodal interconnections between both coasts.
In addition, it was indicated that the investment potential amounts to US$15 billion, taking into account the entire project.
A commitment to the regional logistics business
The proposal seeks to turn Guatemala into a connection point for international trade through a multimodal system that will combine ports, railways, roads and pipelines.
According to Melgar, the objective is to offer a comprehensive solution for companies that carry out foreign trade, by concentrating logistics infrastructure, industrial parks, commercial areas, services and a railway terminal in the same space.
One of the main markets that the project aims to attract are international cargo flows that currently transit through other logistics corridors.
According to the executive, the Consortium has identified around 10 million 20-foot containers that could use the Guatemalan corridor by reducing waiting times and improve connectivity between both oceans.
Transfer between oceans in 4.5 hours
One of the central components will be the railway system. Melgar indicated that, once the infrastructure was completed, The journey between the Atlantic and the Pacific can be done in approximately 4.5 hours through freight trains that will circulate at an average speed of 80 kilometers per hour.
He explained that the project is designed mainly for the transportation of goods and that the railway will be part of an integrated system along with roads and pipelines for different types of cargo.
The challenge of coordinating thousands of owners
Before beginning the development phase, the Consortium had to resolve one of the main challenges of the project: coordinate with the owners of the land through which the corridor will pass.
Melgar affirmed that it was possible to align the interests of more than 5,500 owners along the 372 kilometers of the routea process that he described as the greatest challenge overcome so far.
Investment in stages
Financing will also be structured in phases.
According to the Consortium, each component will have its own financial structure as the development of the project progresses.
Preliminary estimates indicate that the multimodal system – which includes ports and railways – will require investments of between US$4.5 billion and US$5 billion, while the pipeline network would require around US$3.5 billion.
Melgar added that the Consortium is currently negotiating the selection of the railway operator that will become the strategic partner of the project, based on the technical and operational conditions presented by each bidder.
Expected economic impact
In the initial stage of construction of the San Jorge International Logistics Center, the project foresees generate around 2,500 jobs. As the next phases progress, The development will seek to attract industrial, commercial and service companies that settle in the logistics complex.
Melgar compared this process to the gradual growth of a shopping center, pointing out that consolidation will depend on the progressive arrival of companies that take advantage of Guatemala’s infrastructure and strategic location to serve Central American and international trade.
Background
The Guatemala Interoceanic Corridor is not a new proposal. Its history dates back to 1999, but the project gained institutional momentum during the government of Otto Pérez Molina. In June 2012, initiative 4502 was presented to Congress, which sought to declare it of national utility and interest, and in 2013 the Executive issued Government Agreement 270-2013 for that purpose.
The proposal, as mentioned above, contemplated a connection of about 372 kilometers between the Pacific and the Atlantic, through ports, railways, roads and other logistical works. However, the project did not materialize within the announced deadlines.
The agreement issued by the Pérez Molina government was challenged through an unconstitutionality action. Although its promoters continued to manage it as a private investment, the originally announced infrastructure was never built and, more than a decade later, the project is once again seeking to attract investors and clients.