Colombia's coal producers' federation Fenalcarbon has signed an agreement with the transport ministry to fund infra-structure rehabilitation on the Atlántico main line to handle additional export coal traffic to Ciénaga, where a new deep-water port is envisaged. An initial budget of 7bn pesos has been allocated for track reconstruction in the regions of Cundinamarca, Boyacá and Santander.
By the end of July the municipality of Bogotá hopes to select a consultant to develop the outline design of the first metro route in the Colombian capital. The Inter-American Development Bank has indicated that it is willing to provide US$2·5 bn towards construction in the form of a 25-year loan.
Pacific transfer approved
16 Jul 2008
COLOMBIA: National concession agency INCO has given its approval for the concession to upgrade and operate the 498 km Pacific rail network to be transferred to a new owner, Ferrocarril del Oeste SA.
The 30-year concession had originally been awarded in 1998 to Tren de Occidente, but in 2006 INCO began legal proceedings to cancel the agreement on the grounds that the concessionaire had failed to meet investment commitments and traffic targets.
Over the remainder of the concession, the new owners are expected to invest US$12·2m in new locomotives and wagons, as well as upgrading infrastructure between Yumbo and Zamorano. It is hoped to increase traffic from its present level of 30 000 tonnes a month to 600 000 tonnes in the first year of operations by the new owners, with 1·1 million tonnes the target for the third year.
Sistema Ferroviario Central railway project attracts bids from several suitors
By Gavin Sullivan
Published: July 20 2009 13:22
Last updated: July 20 2009 13:22
Colombia’s proposed USD 602.6m overhaul of the country’s 1,050 km Sistema Ferroviario Central railway line has attracted bids from several players including Spain-based Grupo RENFE and Colombia-based Odinsa, a government source told mergermarket.
According to a spokesperson from INCO, the government entity responsible for the sale, the Colombian government is offering a 30-year operational concession of the railway in exchange for a USD 187.5m capital injection from a private partner.
The spokesperson said the government would invest USD 415m in the two-year infrastructure project that the private partner will be responsible for carrying out.
The spokesperson would not release the names of companies who have expressed interest, but noted that the project has attracted attention from both national, and multinational investors and contractors.
According to the government source, in addition to Odinsa and Grupo RENFE, US-based Translogistics, and local Colombian groups Sociedad Portuaria de Santa Marta, Fidupetrol and Cicon, will all likely be preparing offers.
Interested companies will have until the end of July to present offers, the spokesperson said, anticipating that a final deal would be reached with a future private partner by the end of August.
An analyst attributed the high-level of interest in Sistema Ferroviario Central to the opportunities associated with connecting the country’s natural resource rich Magdalena river valley, with the Caribbean-based ports in the coastal city of Santa Marta.
According to the analyst, the potential amount of cargo for the new rail system is estimated at 2.2m tons annually. The analyst noted that the Colombian government is expecting demand for the rail system to increase by 3.8% annually, for the duration of the 30-year concession. The types of cargo along this railway include coal, cement, iron, steel and cereal.
The analyst said another benefit for a future operator, is that upon completion of the restoration, the Sistema Ferroviario Central will link up with Concesion Ferrea del Atlantico, which operates an existing, and expansive network of railways on the Atlantic coast.
In the analyst’s opinion, the Santa Marta-based Sociedad Portuaria de Santa Marta holding, which runs the Caribbean port, would stand most to benefit from control of the railway. The analyst was, however, doubtful of the group’s ability to lead the restoration process.
Once complete, the Sistema Ferroviario Central will extend from Villavieja, in the area of Huila, to the town of Chiriguana, in the Caribbean region of Cesar.
The Colombian government has been working with advisors from the Colombia-based consultancy group, Concol on the development of the project, the spokesperson added.
Vale coal haul
03 October 2009
COLOMBIA: Last month Brazilian mining firm Vale expected to begin using the Atlantic railway network to carry up to 3·5 million tonnes of coal a year between its mines and Puerto Córdoba.
Vale bought a 8·4% stake in railway concessionaire Fenoco in April, and has built a 7 km link to its mines and a 3 km route giving access to the Rio Córdoba port, which it also owns. The miner expects the switch from road to rail haulage will cut transport cost per tonne by around a half.
The Colombian Government has set up a new team of consultants and specialists to oversee the estimated $440m Sistema Ferroviario Central railway concession.
The move follows a corruption scandal in the tender process, which led to its suspension in September.
The project involves building a 1,050 km railway from La Dorada to Chiriguaná, linking Colombia's central area to the Santa Marta port on the Atlantic coast.
The winning team will build the La Dorada stretch, renovate the stretches connecting the districts of La Dorada and Buenos Aires, Puerto Berrío and Envigado and La Dorada and Facatativa, and maintain the Chiriguaná-Buenos Aires rail stretch.
The team will also provide passenger and cargo transport services over a 30-year period.
The railway is expected to handle half of the cargo transported along the country's central corridor.
Medellín orders CAF metro trains
04 December 2009
COLOMBIA: Spanish train builder CAF has been awarded a contract to supply 12 three-car trains for the Medellín metro.
The 211bn peso order announced on December 2 is being funded by the metro together with loans from the Bogotá, Occidente and AV Villas banks. A further 57bn pesos will be spent on related works.
The 69 m trains will be similar to the existing fleet of 42 trains, with a maximum capacity of 1 145 passengers. Deliveries will start in 18 months and be completed within 24 months.
The trains are needed to increase service frequency, facilitate planned maintenance and meet future demand, in particular from the southern extension of Line A to Ancón Sur.
Medellín's metro network currently consists of two lines totalling 28·8 km with 25 stations. A western extension of Line B and a tramway along Highway 80 are also envisaged in the metro's 2020 master plan.
Given that there are several proposals for new international railways in this area, such as FERISTA and Colombia/Ecador/Venezuela which would be standard gauge, would this internal line within Colombia take the opportunity to regauge from 915 to 1435mm?
Coalcorp Mining has begun carrying coal from its La Francia mine in Colombia to Santa Marta using its own wagons on the Fenoco line, in which the mining firm owns an 8·43% stake. Unloading is undertaken by Vale.
Medellin to invest US$213mn in first trolley line - Colombia
Wednesday, May 26, 2010 17:41 (GMT-0400)
Colombian city Medellin's mayor Alonso Salazar will invest 420bn pesos (US$213mn) to build the city's first trolley line, the city's international investment and cooperation agency ACI said in a release.
The trolley line, known as Corredor Verde, will connect Medellin's central eastern area, linking transportation system Metro's downtown San Antonio station to two cable car systems in the Las Estancias area of the city.
The investment will be sought from financing entities and will be disbursed over the next three years.
A total of 61bn pesos is to be invested this year; another 160bn pesos will become available to the municipality for the system in 2011; and the final 196bn pesos will be disbursed in 2012.
Corredor Verde will total 4.3 km. The first line is expected to be ready next year and will serve as a pilot for the implementation of the rest of the system.
The full trolley system is scheduled to be inaugurated at end-2012.
The Colombian government will launch an international tender for the construction of capital Bogota's metro system
The construction of a metro system for the capital was strongly backed by President Alvaro Uribe and president-elect Juan Manuel Santos will also support the initiative, said the official.
The preliminary project has already been drawn up by a consortium comprised of Spanish firms Sener Ingenieria de Sistemas, Transporte Metropolitano de Barcelona, Advanced Logistic Group, Santander Investment and Colombia's Incoplan.
The municipality of Bogota is now drawing up bidding rules for a tender to carry out detailed engineering studies for the project, which will include soil analysis and station design, the official said.
The metro system will be comprised of both overground and underground lines, said the official, adding that details regarding the total number of stations and the line's design will be determined by the engineering studies.
Earlier this week, Uribe said transport in Cundinamarca department will receive 340bn pesos (US$178.9mn) in financing every year during the 2016-2032 period. National economic and social policy council Conpes is expected to approve the funding over the next few weeks.
Of the funds to be released each year, 300bn pesos will go towards mass transport initiatives in Bogota, including improvements to buses that form part of the city's Transmilenio system.
The remaining 40bn pesos will be invested in improvements to suburban trains connecting the capital with the rest of Cundinamarca department.
Colombia's national planning division (DNP) is drawing up a plan to rehabilitate 1,322 km of railways that are currently inoperative.
Some of the rail lines are inoperative due to deterioration, damage, vandalism or theft, while others saw services suspended some time ago because of low cargo traffic, the official said.
Authorities are also working to determine how much of the railway should be concessioned and how much of its rehabilitation should be covered by the public sector.
Once studies are completed and the government has a clear idea of the required investment, authorities will contact multilateral organizations to request technical support and financial assistance.
While Colombia's railway network is mainly used for cargo transportation, authorities are also studying the possibility of using at least some railways for passenger transport, the official said.
Colombian city Medellin expects to award a tender to build the city's first trolley line in October, the head of the city's public works division, Mauricio Valencia, said.
The tender for the US$213mn line is expected to be launched in August and the paperwork signed in November, said Valencia, adding that construction could begin as early as December.
The 4.3 km trolley line, known as Corredor Verde, will be part of Medellin's integral mass transport system, which also includes the city's Metro system and cable car lines, as well as bus services.
The trolley will connect Medellin's central eastern area, linking the metro's downtown San Antonio station to two cable car systems in the city's Las Estancias area.
The government plans to invest 61bn pesos (US$33.1mn) in the system in 2010, followed by another 160bn pesos in 2011 and 196bn pesos in 2012.
Yes, the Spanish version says "tranvias".
So those will be tramways. In USA English, trolleys ; ).
Colombia's national concessions institute Incoplans to launch a tender in 2011 to concession the country's Ferroviario Central railway system.
The system will total 1,045km, connecting districts Villa Vieja, in southern department Caldas, to Chiriguana, in Cesar department.
The concession contract will involve the rehabilitation, maintenance and operation of the line, providing passenger and cargo transport services.
The project was first launched for tender in 2009, with an estimated budget of US$440mn. However, the process was declared void after corruption allegations.
At the time, the project attracted two bidders: Consorcio Sistema Ferroviario Central, comprising Spanish firms Ferrocarriles Españoles de Vía Estrecha (Feve) and Construcciones y Proyectos de Asturias (OCA); and Sistema Ferreo Central, made up of Colombian firms Odinsa and Valores y Contratos (Valorcon), and Noreing of the US.
Following the failed tender, Inco decided to revise the project, and is currently drawing up its technical details and financial structure.
The government expects to award the concession contract in 2012, the official said.
Colombian city Medellin's state-owned subway firm Metro de Medellin will purchase buses for the city's Metroplus mass transport system during H1, a spokesperson from the city's transport division told BNamericas.
The purchase of the buses will be financed by the municipal government, which will disburse 35bn pesos (US$18.9mn) to Metro de Medellin for the operation as part of a municipal development plan.
On January 19, Metro de Medellin's board of directors decided to accept mayor Alonso Salazar's proposal for it to begin operating Metroplus, the city's head of communications, Lina Cuartas, told BNamericas.
"This means that, as of January 19, Metro de Medellin officially became Metroplus' operator," Cuartas said.
Salazar made the request after failing to reach an agreement with current bus owners regarding their participation in the transport system.
Under the city's original plans, Medellin's bus operators would become responsible for purchasing new buses and would have had a key role in operating the system. However, the two sides failed to agree terms regarding the income.
The system, which would have been a public-private partnership, will now be fully managed by the public sector, the transport division spokesperson said.
As well as taking ov er the Metroplus, Metro de Medellin is currently working to expand its network. Two new stations in the city's southern area will be opened this year, according the spokesperson.
The firm is also working with the municipal government to plan a trolley system that will form part of the Metroplus network.
Finally, Metro de Medellin is evaluating new cable car projects to expand its Metrocable division.
Colombia's national concessions institute Inco plans to launch a tender at end-2011 to concession the country's Ferroviario Central railway system.
Inco will carry out a number of technical and financial feasibility studies during 2011 to define contract details allowing the line to be built and operated by a private firm.
Once the results are ready, Inco will launch the tender, said Mozo, adding that if all goes well, the call for bids will be announced by year-end or in early 2012 at the latest.
The concession contract will involve the rehabilitation, maintenance and operation of the line, providing passenger and cargo transport services. The project will require an estimated 1.3tn pesos (US$695mn).
Totaling 1,045 km, the system will connect districts Villa Vieja, in southern department Caldas, to Chiriguaná, in Cesar department.
The rail project was first launched for tender in 2009. However, the process was declared void following allegations of corruption
BEIJING, Feb. 14 (Xinhuanet) -- The Chinese Government plans to cooperate with Colombia in building a 220km transcontinental railway which would link Colombia's Atlantic and Pacific coasts,according to a British newspaper.
The Financial Times quoted Colombian President Juan Manuel Santos as saying on Monday.
The project is treated as one of a series of Chinese proposals that would boost transport links with Asia and improve Colombia's infrastructure, the papersaid, citing documents it has obtained.
"It's a real proposal ... and it is quite advanced," President Santos said..
"I don't want to create exaggerated expectations, but it does make a lot of sense," he said, adding that Asia is the "new motor" of the world economy.
The estimated 7.6 billion U.S. dollar project will be operated by the China Railway Group.
The Panama Canal is now the main shipping route which connects the Atlantic and Pacific commercial intercourse. It represents roughly five percent of world trade, with 13,000 to 14,000 ships passing through it every year.
China is in talks to build a "dry canal" linking Colombia's Atlantic and Pacific coats by rail, Colombian President Juan Manuel Santos was quoted as saying on Feb 13.
With a total length of 220km, this "dry canal", would connect the Pacific coast at the north-Choco Cupica Gulf with the north-Antioquia Gulf of Uraba, and carry over 40 million tonnes cargo to the Pacific ports, the Financial Times reported.
The 220-kilometer project, dubbed as an alternative to the Panama canal, is one of a series of Chinese proposals that would boost transport links with Asia and improve Colombia's infrastructure, the Financial Times said, citing documents it has seen.
The $7.6 billion project is funded by the Chinese Development Bank and operated by China Railway Group, it said.
The report wasn’t confirmed by Yu Tengqun, board secretary of China Railway Group. However, he said the company is willing to fund overseas if conditions are appropriate, reported the National Business Daily on Feb 14.
Though as the largest coal producer in the world, China’s coal imported exceeded 50 million tonnes in 2009, the report said.
The cost of imported coal is lower than that hauled via railways or vessels from North China, it added.
As the fifth largest coal producer globally, Colombia exports coal mainly from the Atlantic and has shipped some coal to China’s coastal areas.
The writer seems to have ignored capacity - a frequent happening in articles like this-
Colombia needs to get smart about infrastructure
TUESDAY, 15 MARCH 2011 16:34 PABLO ROJAS MEJIA
Colombia’s decaying and inadequate transport infrastructure is clearly among the country's top challenges. Poor roads and railways are one reason why the country fell in global rankings of competitiveness in tourism. Standard & Poor’s, a credit rating agency, recently cited infrastructure as one of three key factors keeping Colombia from attaining an investment grade rating, long coveted by the country’s economic policymakers.
Perhaps the only recent bright spot has been urban transport in Bogota and Medellin. The Colombian capital was the first large city in Latin America to replace a chaotic system of competing private bus companies with a revolutionary bus rapid transit system, the Transmilenio. Medellin’s MetroCable, an aerial cable car connecting poor hillside slums to economically vibrant areas downtown, has helped hundreds of thousands of people avoid a lengthy and dangerous commute on winding potholed roads that weave through gang territory. Many Latin American cities now have their own version of the Transmilenio, and most others are considering inaugurating one. The MetroCable has been copied in places including Rio de Janeiro’s Complexo do Alemao slum.
In the meantime however, intercity travel has remained costly an inconvenient. Ten years ago, the main complaint from travelers along rural highways was not congestion or potholes, but rather crime. In this sense, recent improvements in safety along major roads have had the politically inconvenient side effect of revealing their terrible inadequacy. For example, Bogota and Medellin, Colombia’s two largest cities, are only 160 miles apart geographically, but driving from one to the other, though much faster than it used to be, still takes eight hours at best. Shockingly for two cities with outstanding innovations in public transport, the roads that connect them are still narrow, winding and often very congested.
The flipside of Colombia’s poor infrastructure is that building a single tunnel or widening just one highway can make an enormous difference. A tunnel cutting through the mountains that separate Medellin from quaint colonial towns west of the city has sparked a boom in tourism in the region. A similar tunnel project to the east would cut the travel time between the city and its international airport from about one hour to less than twenty minutes. Villavicencio, a city on the foothills of the Andes and chief gateway to the country’s vast eastern plains, used to be considered worlds away from Bogota, separated by a somewhat dangerous six-hour drive on windy roads. Thanks to a new highway, today Bogotanos can reach the plains in less than 90 minutes.
The ambitious infrastructure improvements proposed under the new National Development Plan – including doubling the number of two-lane intercity highways, upgrading old airports and reviving rail networks – would cost an estimated $17b between now and 2014. This is not cheap, but the government, which seems serious about reducing the deficit, estimates that this is feasible if half of those funds come from private investors.
Indeed, many people with big pockets see in Colombia’s commitment to infrastructure an opportunity to make a lot of money. Brazilian mining baron Eike Batista, the world’s eighth richest man, recently announced his intention to invest some of his billions in the country’s infrastructure projects. Perhaps most notably, China and Colombia have discussed the idea of building a railway connecting Colombia’s Pacific and Atlantic coasts, a plan that aims to rival the Panama Canal.
But given the country’s fiscal deficit and many other challenges – escalating drug gang violence, a massive land reform initiative and stubbornly high poverty rates, just to name a few – it is essential that the country take on this task wisely and carefully. The biggest risk facing the infrastructure boom is clearly not money, but the distortive effect of petty and corrupt politics. German Cardona recently told Dinero magazine that upgrading the country’s infrastructure “is not a problem of funds, but of good management to speed up the projects.”
Take, for example, the Bogota Metro. The capital, dotted with hills and bordered by mountains, is clearly not an ideal city for a subway system. Rather than replace the Transmilenio, the Metro plan would create only one subway line running parallel to an existing bus route. At best, it would boost the city’s self esteem and temporarily reduce congestion, but at an enormous cost. Nevertheless, this politically popular idea got Samuel Moreno elected a few years ago. Among local mayoral hopefuls, it is now taboo to express any reservations about the plan for a Metro.
Bogota and Medellin’s extraordinary periods of creative urban policy and infrastructure improvements encouraged Colombian voters and politicians to dream big, but they should also remember to dream wisely. Unfortunately, as in most countries, the politics of major infrastructure projects in Colombia is complex, personal and often dirty. The country has a great opportunity and plenty of money to transform its transport infrastructure and, in turn, its economy, but if badly managed this process could also produce plenty of pork.
Colombian capital Bogotá's planned metro system will act as a complement rather than a replacement for the city's Transmilenio BRT system, the head of the country's national infrastructure chamber, Juan Martín Caicedo, said..
"The metro is necessary, but as a complement to the transport that already exists in Bogotá and which has proved a success - the Transmilenio. The Metro isn't a replacement for the Transmilenio," said Caicedo, a former Bogotá mayor.
Many have questioned the necessity of the metro given the success of the Transmilenio, which serves 1.6 mn passengers each day. Last month, President Juan Manuel Santos said he backed the metro project, but that this would mean postponing or cancelling plans to extend the BRT system over the city's Séptima avenue.
Critics have also called into question projected passenger demand for the metro system, saying it will serve less than 10% of the city. However, the majority of Bogotá's economic activity is concentrated in its western area, and the metro will have 3-4 times the capacity of the Transmilenio, according to project director Camilo Zea.
The first metro line will total 34.5 km and will be carried out in two phases, the first of which will total 20.3 km with 19 stations. The city plans to build four metro lines over the next 30 years.
Colombian President Juan Manuel Santos announced Wednesday that construction on Bogota's first metro line will begin towards the end of 2012.
Speaking at an economic forum attended by various investors and businessmen in Berlin, Germany, the Colombian president fielded a question about the notoriously insufficient transportation network in the nation's capital.
"We have already given approval for the choice of who will structure the project and then comes the bid to see who is going to build it," said Santos, noting that "the government has already confirmed its interest in financing 70% of the metro, which should start to be built late next year."
The Transmilenio bus network is currently the primary form of transport around Bogota, although the proposed construction works and extensions to the network have been plagued by allegations of corruption regarding the infamous Nule Group and the local government of Bogota.
Medellin is at present the only city in Colombia with a metro system, leaving the capital trailing behind the nation's second-city in terms of efficient transport and mobility.
When the news broke on 14 February 2011 that China had proposed building a 220km-long dry channel between the northern Atlantic and the Pacific coast in Colombia to rival the almost century-old Panama Canal, rail and shipping experts reacted with deterred hesitancy.
While Colombian President Juan Manuel Santos told the Financial Times that it was 'a real proposal' and the Chinese studies would 'all work out', sceptics referred to the fact that rail freight is more expensive and complex than the waterway, as well as that the canal itself is undergoing a $5.25bn (£3.3bn) reconstruction to double its capacity.
Santos, however, believes that the alternative to the Panama Canal could be a great opportunity to boost business between the Asian and the South American continent. "I don't want to create exaggerated expectations, but it makes a lot of sense… Asia is the new motor of the world economy," he said.
Chairman and co-founder of the Railroad Development Corporation (RDC) and the Ferrovias Guatemala, as well as director of the América Latina Logística-Central & Mesopotámico in Argentina, Henry Posner III is one of the stern critics of the proposed railway as a possible alternative to the Panama Canal. Here, he talks about the feasibility of the project, Panama's already existing railway and China's increasing demand for railroads to transport coal.
"The alternative to the Panama Canal could be a great opportunity to boost business."Elisabeth Fischer: What is the logic behind building an alternative to the Panama Canal in Colombia?
Henry Posner: First of all, this is not a rail alternative to the Panama Canal. This is a coal railroad from Central Colombia to the Pacific Ocean and while it has been described as a transcontinental link, my understanding is that coal will be a big part of the rail traffic. So I would describe it more as a coal railroad disguised as a transcontinental link.
China is looking for raw materials everywhere in the world. The Chinese demand is driving expansion of coal industries in Australia, Mozambique and obviously also in Colombia. What is constraining the ability of coal to get to China is quite often missing rail capacity. In this case, it seems to me that China is proactively getting involved in rail transportation in anticipation of problems getting the coal to the market.
We have seen this elsewhere, for instance in our own involvement in the Nacala Corridor in Mozambique. Shortly after we sold our interest in the corridor in 2008, it was announced that Brazilian mining company Vale was taking an interest in the company. In conjunction with their own efforts to explore the coal mine near the railway, they were also involved in the construction of hundreds of kilometres of new track.
So, I would argue that's further evidence of the big picture, which is that in all these places the unifying theme is the Chinese demand for raw materials.
EF: How could Colombia benefit from the construction of this railway?
H Colombia would simply benefit by having an additional market for its coal. But I think it's highly questionable that Colombia could evolve as a competitor to the Panama Canal. As chairman of the railway in Guatemala, I've often been suggested that we should be in the transcontinental land bridge business, competing with the Panama Canal. But we have consistently found that it's simply not realistic to compete with a country where there are already well-established shipping lanes and ports.
"The decision whether or not to realise this project lies in China's and Colombia's hands."If you really believe that the Panama Canal is somehow going to need an alternative than I think the best option would be to update and extend the existing Panama railroad, not building a brand new railroad across mountainous territory at an astronomical cost.
Once every six months for the last ten years, there have been suggestions for a scheme in Mexico, Guatemala, Nicaragua and Colombia to build a rail alternative to the Panama Canal. The real question is: have the projects got vision as well as funding? China at least seems to provide the latter.
EF: Critics suggest that China's plan is largely conceptual. How feasible is the construction of a railway in Columbia?
H I don't happen to know the exact specifics of the proposal but there are numerous projects around the world where demand for coal is driving substantial investment in railways and there is nothing inherently impractical with rebuilding an existing railway for coal business. I think what people may be looking at here, is what would it cost to build a new mountain railway of European standards and that probably wouldn't work.
Colombia with its steeply graded mountains, with the exception of the quarter to the Atlantic, would make it very expensive to operate a railway. I think this would be a shot in the arm for Colombia. The advantage, however, is that they've got an existing right of way and an existing railway even if it's not functioning.
I must say, our own experience in Colombia suggests that it's not an easy country to do business with. We have been involved in past 'this time we're serious' initiatives and projects, and we were involved in one of the past rounds of calls for privatisation, which of course never went anywhere.
So the question becomes what do the Chinese know that we don't? Perhaps there is a link between the most recent round of calls for privatisation in this latest scheme where Colombia sees an opportunity to do it with the Chinese, as opposed to the last scheme, which was an international general tender process.
EF: What are stumbling blocks in the implementation of the Chinese railway?
"It's simply not realistic to compete with a country where there are already well-established shipping lanes and ports."H The decision whether or not to realise this project or not lies in China's and Colombia's hands. A stumbling block, however, could be Colombian greed. The Chinese are going to be seen as the golden goose and there will be a Colombian tendency that China pays as much as possible for the privilege of giving them a functioning railroad, which they themselves could not do on their own.
Any government seeing a big project like this, which involves a country like China with a huge demand for coal, is trying to figure out how much they can get for themselves before driving the project away. It's a natural human tendency and we've seen it everywhere we operate, including the US. Regulators and politicians survive on the value created by projects like this.
EF: Four years ago, a free-trade agreement was signed between Colombia and the US but has not been approved yet. Will this rail proposal encourage Washington to push for ratification of the agreement?
H I would say that the Colombia-US free trade agreement is irrelevant because this is between China and Colombia. The only thing I could think of is that US coal producers would want to be competitive once there is a stronger link between Columbia and China. Therefore the free-trade agreement might get more support in the US.
EF: Do you think that environmental groups will support the construction of a rail link for coal in Colombia?
H Environmental groups might be opposed to the mining of coal. However, they need to recognise that if it's not mined in Colombia then it will be mined some place else.
And more to the point: there has been interest in seeing Colombia diversify away from the drug trade and certainly this would be an important move to diversify the Colombian economy and from a policy perspective this is probably a good thing. I think the answer to most social problems is commerce and economic development. To the extent that coal could become a bigger part of the Colombian economy and to the extent that Colombia itself could participate in that as supposed to having most of the value occur outside of Colombia. I think it could strengthen the Colombian economy and that would be a good thing for the country as well as the region.
EF: Do you think the proposal is likely to go ahead?
H From what I've heard, it sounds like that the fundamentals of the project make sense, as long as it's understood that it's not a transcontinental land bridge for containers but rather a coal railway. It sounds like one of many coal railways being developed around the world to meet increasing demand.
The big question is: is this a long-term and sustainable market or is there something on the horizon like over-capacity that will see this project cut short? This is hardly the only place in the world where Chinese demand is driving investment in capacity of both the mining and transportation of coal. At some point there is the risk that projects in the pipeline are going to get cut short if there is a drop in projected demand.
So my advice to Colombia would be, if 'this time you are serious' make sure you get this done because it may be the last chance for you to have a railway on the Pacific side.
Adif, the Spanish rail infrastructure manager, is about to implement its freight traffic management tool in Colombia
Adif will provide technical assistance for the maintenance and development of its specific freight traffic management tool on the Chiriguaná-Santa Marta section operated by Fenoco (Ferrocarriles del Norte de Colombia).
(28/04/2011) The “Greta" solution, designed by Adif, will be implemented between La Loma and Puerto de Santa Marta in northern Colombia, a 230-kilometre-long section which specializes in serving the local mining industry by transporting over 26 million tons of coal per year.
Adif and Fenoco will collaborate on staff training, technical operation and procurement, drawing up rules and procedures for railway operation, assistance for construction and maintenance of the infrastructure, and the information systems for rail traffic management and regulation.
Adif is a world leader in the field of rail traffic management and control, thanks mainly to the Da Vinci system, developed by Indra and copyrighted by Adif, which is one of the most advanced rail traffic management platforms in the world.