LEADING THE REGION INTO GLOBAL COMMERCE
El Salvador is acquiring the favorable conditions to become a regional distribution center

CEPA manages the leading airport in Central America and aims to met the challenge of ensuring El Salvador benefits from increased global trade

A strategic hub in one of the most stable and sound economies in the Americas, El Salvador is set to exploit its location as a regional distribution center and become the flagship of Central America’s commercial growth and integration into the global economy. By bringing up the country’s ports, airports and railways up to internationally competitive standards, CEPA, the Autonomous Executive Ports Commission, is firmly positioned as a key player in the country’s commercial and economic expansion.

President Flores’ efforts to open the Salvadoran economy to the rest of the world are pushing the country to take advantageous positions in Central America’s imminent growth challenge. El Salvador is now determined to head the region’s development through implementing progressive legislation and a free market philosophy, which is showcased by its major role in CAFTA, the region’s Free Trade Agreement with the U.S., Central America’s most important venture so far in the path of commercial opening, and the adoption of the U.S. dollar as legal currency in 2001.

As the main entrance gates to the country and prime facilitators of foreign trade, El Salvador’s ports and airports are the cornerstones of infrastructure development plans, and CEPA is set to meet the challenge of guaranteeing efficiency and modernization levels that ensure the country benefits fully from the increased commercial activity. The new La Unión Port project, the foreseeable realization of an inter-oceanic channel connecting the Pacific and the Atlantic through Honduras, and the modernization and expansion of airport cargo facilities are in the headlines of El Salvador’s development agenda.

RUY CÉSAR MIRANDA President of CEPA

President of CEPA, Mr. Ruy César Miranda, highlights El Salvador’s comparative and competitive advantage with the rest of the region regarding transportation development. “We started developing the airport back in 1980, and have invested US$80 million from our own resources in the last 8 years. At present, we are the leading airport in the region; passenger capacity of the terminal building has doubled to 2.5 million passengers a year, while we are currently handling 1.8 million, so there is space for growth.” The 15-year master plan for the airport development, aiming to cater for the increase in commercial activity generated by CAFTA, also includes a US$2 million investment in the modernization of the cargo terminal, which handles many of the activities related to the Free Trade Zones neighboring the airport. Mr. Miranda draws attention to the strategy of commercial positioning of El Salvador’s airport in relation to others. “A beneficial geographic position, with a surrounding land that is available for development, and high security are crucial for maintaining the regional leadership of our airport infrastructure.”

However, more important than the airports for the realization of CEPA’s mission are the ports, which are fundamental for boosting El Salvador’s potential as a commercial center. Puerto Acajutla is the mainstay of the country’s import and export activities, which is set to experience an unprecedented turnaround in 4 or 5 years with the opening of a new port. “Today Acajutla is El Salvador’s only commercial port, handling around 3 million metric tons of cargo. Now we are ambitiously launching ourselves into a project for a master concession of the port and surrounding area to private operators that is sure to launch great business opportunities,” explains Mr. Miranda. “The concessionaire will be required to invest US$18 million as a minimum and to reduce the current tariffs in about 25 percent, which will guarantee high levels of efficiency and competitiveness in the port for the next 30 years.”

While Puerto Acajutla is presently projected to absorb the growing trade demands created through CAFTA, a technically advanced port infrastructure specialized in container cargo, Puerto La Unión, is being built in the Gulf of Fonseca, on the borders with Honduras and Nicaragua. “The port is going to be a center of distribution, mainly for the Central American and Pacific side region,” says CEPA’s President. “La Unión is going to have the necessary technical and physical conditions for big ships, improving trade and lowering the cost of ocean transportation between our region and the rest of the world.”

As well as bringing great economic and social benefits -namely substantial employment opportunities, the upcoming project, a US$125 million investment, will provide a powerful magnet for growth. With a depth of 46.5 feet, the port has a specialized container terminal for handling containers and the most modern and efficient equipment. The land surrounding the port provides an additional area for launching the area’s commercial potential.

Although commerce in the region will be connected to the new port through the highway network, El Salvador’s railroad system is one of the tools for economic development that CEPA aims to utilize in coordination with air and shipping transportation activities. The reactivation of railroad cargo and passenger transport in the country’s western region will provide the backdrop for the more ambitious port projects.

In addition to being a linchpin for El Salvador and the Central American region’s economy, La Unión is a decisive step towards connecting the Pacific and the Atlantic oceans through a dry channel, as highlighted by Mr. Miranda. “The truth is that Central America, during these past decades, has always considered the possibility of creating an alternative to the Panama Canal, but at last, for the first time, there is a strong possibility of making the dream a reality.” The joining of Puerto La Unión to Puerto Córtez through a road network built on Honduran territory opens the path to an inter-oceanic route that would multiply the region’s investment opportunities. “Honduras has proved to have the resources and the interest to build the roads; they have already completed a good section and there are around 100 kilometers left to build,” says Mr. Miranda. “In El Salvador, CEPA has concentrated efforts on making the La Unión Port project a success.”

A modern and economically stable democracy, El Salvador is striving to become a strong reference on the international scene and is on the path to substantial improvements. Meanwhile, CEPA is working towards putting the country on track to realizing its huge potential and becoming the regional logistical center.