Users and representatives of various business chambers have reacted this Saturday, August 3, to the announcement by the authorities of the Ministry of Communications, Infrastructure and Housing (CIV) of the opening of lanes at kilometer 44 of the Palín Escuintla Highway for next week.
In an official statement released on Saturday, authorities reported on the progress of work on the aforementioned stretch, which connects with the Empresa Portuaria Quetzal (EPQ) as well as the land borders with Mexico and El Salvador.
The section was affected last June by the first rains at the start of winter, which caused problems.
Trade union positions
“It would be very positive news if both lanes were opened in the next 96 hours. This will help improve the logistical times of movement from the South Coast to the City. It is important that they finish restoring the entire stretch in the short term,” Carmen María Torrebiarte, president of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif), told Prensa Libre.
The mayor of Escuintla, Abraham Rivera Estévez, pointed out that “for the municipality, this is encouraging news that not only eases the passage of heavy transport through our jurisdiction, but also improves the mobility of goods that transit through the sector.”
According to Enrique Lacs Palomo, executive director of the Guatemalan Chamber of Food and Beverages (CGAB), the expectation is that the stretch will be open as soon as possible. In four days, reestablishing a lane gives us the expectation that by the end of August the stretch will be fully operational.
“It is positive; this will help speed up traffic from the port to the department of Guatemala,” said Enrique Meléndez, executive director of the Guatemalan Association of Gasoline Dealers (Ageg).
Fanny D. Estrada, director of institutional relations for the Guatemalan Association of Exporters (Agexport), said it is a great relief to think that in 4 days this vital artery for trade will be able to be used. 60% of export and import cargo uses this route.
Business consultant in logistics René Muñoz Barnoya said that he hopes it can be rehabilitated, since the costs for importers, exporters and merchants have increased substantially with the EPQ, which is the closest to Guatemala City and the industrial area of the country.
Hector Fajardo, director of the Central American Chamber of Transporters (Catransca), said that it is something that Guatemalan users of that road want, but being aware of the reality, we believe that it will take a while longer, probably due to weather conditions that may bring rain to the area.
Guillermo Alvarado García, marketing manager for an industry in Amatitlán, commented that in principle it is a partial solution that helps, “but the other strategies already implemented must be maintained because if they redirect everything to this sector for the moment it is enough and chaos will be created.”
We must bear in mind that in this sector the traffic is heavy transport that normally travels at a slower speed and this reduces the fluidity, which is why he insisted on maintaining the actions already implemented on other roads.
Impacts?
As for the possible impacts and economic repercussions on both the national productive system and people, there is no consolidated data, but those consulted assure that there are losses during the interruption.
For example, Muñoz Barnoya said that some companies and industries had problems in the supply of raw materials, the increase in inventories to continue production, which means a “quite high” cost of capital.
The other effect is the cost of transportation and personnel, which could have easily increased by 50%, in addition to the labor effects on the personnel collecting the goods from the ports.
“What used to be done in four to five days can now be done in two weeks, so it is a serious problem. Having a ship waiting is also a problem for the export sector that increases costs, since prices are negotiated, they can no longer be varied, and it is a very high cost for everyone,” he said.
The president of CACIF stated that the most important impact is on people; the time spent traveling a short distance. Therefore, “spending more than 10 hours sitting in a truck, car or bus every day is emotionally, family and financially exhausting.”
Rivera Estévez agrees, stating: “The impact on residents will be significant by minimising the transport burden in our area. Although there may be some temporary inconvenience, this will significantly improve mobility and safety in the municipality. We believe that this will greatly benefit us.”
For Lacs Palomo, estimating the additional cost of this interruption is very difficult, but using an empirical model it has been indicated that it could be between Q15 and Q20 million during this entire period for CGBA members.
Meléndez confirmed that there was no increase in freight rates on the part of the transporters, which is why there was no adjustment in the price to the final consumer.
The impact generated by the closure of this route is highly negative in human, health, social, economic, legal and logistical aspects, says Fajardo.
He gave examples of drivers who are unable to get home at convenient times to meet with their families, drivers suffering from illnesses due to stress, health complications for road users due to delays, social impact due to not being able to travel and fulfil social commitments, increased logistics and transport costs as well as increased prices for transported products, and financial penalties for breach of contract.
The commercial impact is due to delays in deliveries, suspended sales due to difficulty in supply, dissatisfied customers who sought solutions in substitute products or new suppliers, suspension of service provision and all this causes in some cases price increases derived from additional costs, added Alvarado.
On the other hand, the costs not contemplated in this sector are the increase in fuel costs and depreciation on vehicles, overtime and various expenses for work at night or on weekends, which occur because the products are raw material to continue with other production processes.
What lesson does it leave?
Those surveyed were also asked what lessons this event leaves, and recommendations to prevent it from happening again in the future, and these were their suggestions.
“The vulnerability of infrastructure when it is not properly maintained. The importance of having the technical staff and resources to provide assistance in the shortest possible time,” said the president of CACIF.
The CGAB representative indicated that these events have become repetitive at a high cost for everyone, with an adequate risk analysis, status reviews, preventive maintenance and strengthening the capacity for contingency intervention, the cases would be minimized.
For the mayor of Escuintla, not only because of what happened on the Highway, but it is essential to resume a maintenance plan for the main road network. “This plan must be attended to periodically, not only in case of eventualities. All international highways are in very poor condition and it is crucial to resume this issue and learn about the importance of these routes. They are not only vital for the mobility of people, but also for the mobility of goods and the economy. Therefore, a reengineering of the MICIVI is urgently needed to be able to properly attend to the maintenance of the road network.”
The director of Ageg believes that the importance of supervision and maintenance of the roads is essential to avoid interruptions on the routes that affect the country’s economy.
For consultant Muñoz Barnoya, the most important thing on a highway is its section and road surface design; maintenance is vital, especially in matters related to rainfall.
“We are not a flat country; there are waterways everywhere and the appropriate work must be done, as well as maintenance over time, which is what has been lacking, as in other parts of the country,” he concluded.
The Agexport representative stated that this emergency has provided a lesson in foresight and planning. “Not only for the coming years but also for the current one, since the rains, hurricanes and storms that are technically forecast will present similar situations in the coming months,” she reiterated.
Alvarado concluded that Guatemala is highly vulnerable to climate phenomena and roads are impacted by this situation, therefore, it is essential to maintain constant maintenance of the roads, constantly evaluating the situation, areas at risk of lahars, checking river beds parallel to roads and towns, alternate roads in good condition for use in case of emergency, checking pipes and other installations under current roads to prevent disasters.
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