Mexico Seeks Bidders For $5 Billion Pacific Coast Port Project

By Paul Kiernan, Of DOW JONES NEWSWIRES

ENSENADA, Mexico -(Dow Jones)- The Mexican government will start seeking bidders next week for a long-anticipated, $5 billion port project at Punta Colonet on the Baja California peninsula.

The Pacific coast port, which by 2022 is expected to be able to handle 6 million containers per year, will be Latin America's largest in terms of capacity, Communications and Transport Minister Luis Tellez said Thursday.

At a press conference, Tellez said Punta Colonet will allow Mexico to benefit from the enormous trade potential between Asia and North America.

He said economic ties between the two regions are taking off at a time when the world's largest port system - Los Angeles and Long Beach, California - is saturated with traffic and nearing capacity.

Unlike those ports, which are closed in by the second-largest metropolis in the U.S., Punta Colonet is 140 kilometers from the nearest major city in a sparsely populated region where empty desert meets open ocean, and will occupy some 2,700 hectares.

"The fact that the port is away from urban centers allows us to plan - in advance, in an orderly way, and with respect for the environment - the development of such an economic hub as Punta Colonet will be," Tellez said.

Bidding rules for the project will be published next Tuesday. Manuel Rodriguez, the ministry's coordinator for Punta Colonet, said the project comprises four different concessions - one for a container terminal, another for the port's basic infrastructure, another to build one or two railway lines connecting the port to the U.S. railroad network, and another for the electromagnetic spectrum to operate the trains.

The first three concessions will be for 45 years, but Mexican law dictates that the maximum duration of concessions in the electromagnetic spectrum is 20 years.

Consortia that plan to participate must be formed by December, and will have to present their proposals by next July, Rodriguez said. He said the ministry expects to decide on a winning consortium in September 2009.

Officials anticipate that the port will begin operating in 2012, at which time it could move as many as 2 million containers per year. Mexico's entire port system currently has an annual container capacity of around 3 million.

President Felipe Calderon said the port will offer significant employment opportunities, with an estimated 24,000 jobs generated during the construction phase of the port and another 59,000 needed to operate it.