San José, Costa Rica, since 1956

Caldera Port Contract Approved

After five years of discussion, a plan to modernize the central Pacific port of Caldera has taken a huge step forward in a move being praised by the business community as a longoverdue solution and criticized by the Association of Public and Private Employees (ANEP) as a shady transaction.

The Comptroller General s Office, responsible for reviewing and authorizing all government contracts, approved a 20-year contract last week for the private Sociedad Portuaria de Caldera to take over the port s cargo handling and improve existing infrastructure starting July 1.

Paul Zúñiga, president of the Pacific Port Authority (INCOP), told The Tico Times the contract approval is the most important development in Costa Rican ports in the past 30 years. INCOP s approximately 1,000 employees will lose their jobs when the Colombian company takes over, though according to Zúñiga those workers and their community will benefit overall from the change.

It s no secret that Caldera, the biggest port on the Pacific, is at the point of collapse, he said. By improving the port, work conditions will improve and new jobs will be created.

The contract is the first of three designed to overhaul the 25-year-old port, where lengthy delays caused primarily by limited space are estimated to cost shipping companies and, therefore, distributors, retailers and consumers millions of dollars each year.

Of the country s export total, approximately one-fourth (last year, 2.7 million tons of cargo) moves through the port, which was built to handle only 650,000 tons per year, Zúñiga said. In the first six months of last year alone, boats waited in line for a total of 5,844 hours (244 days) at Caldera, causing total losses of $6 million (TT, Sept. 23, 2005).

The Sociedad Portuaria still faces some hurdles, including obtaining approval from the Public Services Regulatory Authority (ARESEP) for its tariff plan for loading and unloading goods, and an environmental viability permit from the Technical Secretariat of the Environment Ministry (SETENA).

In addition, ANEP has filed two criminal complaints before the Prosecutor s Office against the Legislative Assembly, INCOP, the Public Transport Ministry (MOPT) and President Abel Pacheco for their roles in the contract approval process, alleging authorities violated the Concessions Law by publishing the bid information too late and conducting illegal, unofficial negotiations.

Susan Quirós, of ANEP s Legal Advisory Unit, told The Tico Times she acknowledges that Caldera is in a state of collapse, but alleges that authorities allowed the port to deteriorate to justify that a private company (takes over). She added the recently approved contract has the same problems as the other versions, referring to the two contracts the Comptroller rejected in 2004 and 2005 for defects primarily regarding fees charged to shippers.

Zúñiga called the idea that INCOP did not correct the errors absurd and said the process has been very transparent. He added that though ANEP does represent a small group of INCOP employees, most workers support the plan and are willing to use their severance checks to start small businesses.

Under the contract, Sociedad Portuaria must make an initial payment of $5.1 million to begin operating the port, and invest at least an additional $3 million in improving infrastructure; it must pay INCOP 15% of its earnings annually. INCOP estimates this payment will equal $1.5 million per year, according to Zúñiga.

The $5.1 million initial payment will go toward severance pay of $1,000-50,000 depending on each worker s years of service.

The remaining $24.9 million, for a total of $30 million in payments to workers, will come from the funds accumulated in the Port Authority s coffers.

It s unclear how many of those employees might find work at the port after INCOP s liquidation. According to ANEP s Quirós, Sociedad Portuaria has indicated it will need only 200 workers to operate the port; Zúñiga agreed significantly fewer than 1,000 will likely be hired. He explained that though the Port Authority now has teams of 24 workers to unload ships, technological advancements mean that large ships from fruit companies Dole or Del Monte now require only three workers to unload.Many of the workers now on INCOP s payroll have nothing to do, he said.

However, opportunities for small and medium businesses will abound, since Sociedad Portuaria will need services now provided by INCOP from cleaning and maintenance to port security. The government has provided a list of these services to unions, which are now responsible for informing and preparing workers, he said.

The Union of Private-Sector Chambers and Associations (UCCAEP) said in a statement that the contract approval gives the business community reason to hope that additional progress toward highway and airport improvements, as well as improvements at the ports of Limón and Moín on the Caribbean coast, will finally take place.

These ports, which handle approximately two-thirds of the country s imports and exports, also face limitations, though Caldera s inadequacies are more severe.

UCCAEP also expressed hope that the other two contracts needed for Puerto Caldera s modernization one to build a grain dock and another to take over the towboat services will also take place by July 1.

Zúñiga said the grain dock contract with the Colombian-Costa Rican Consorcio Portuario Granalero de Caldera is under consideration by the Comptroller s Office and may be approved as soon as April 19. The contract for towboat services, with Chilean company Saam, is under review and has not yet been signed.


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