The damage caused by the sinkhole on the Palín-Escuintla Highway; the daily paralysis on National Route 14 and on the old route to Escuintla; the congestion in the mooring of ships at the Empresa Portuaria Quetzal (EPQ), the uncertainty about the future of the APM Terminals container terminal, and the announcement of a long process of public-private alliance for the La Aurora International Airport (AILA) frame the current situation of land, sea and air logistics in Guatemala.
Although winter has not entered an intense phase and a second part is still pending, which is the most critical due to the formation of tropical storms in the Atlantic, traffic jams on commercial routes on the South Coast last up to eight hours due to heavy traffic in the area of influence of the Palín-Escuintla Highway, which maintains a negative impact both at a personal level and in the production chain, distribution and consumption of goods and services.
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Meanwhile, the Ministry of Communications, Infrastructure and Housing (MICIVI) approved the continuation of the public-private partnership (PPP) process for the reconstruction, rehabilitation and operation of the Escuintla-Puerto Quetzal Highway (AEPQ), a message that may provide relative calm in the current situation.
But these are just two issues. Experts agree that a transformation is needed at Micivi, which will be the responsibility of the current authorities, as well as resuming planning to avoid new crises for the productive apparatus.
The diagnosis
Free Press He consulted Jorge Benavides, an associate researcher at the Foundation for the Development of Guatemala (Fundesa), who provides a perspective on logistics infrastructure, which in his opinion should be addressed from two branches: one is to foresee operation in optimal conditions, due to the condition of vulnerability derived from the fact that logistics systems are radial, which means that they go from one point to another, without the capacity for redundancy.
This first point necessarily and strictly leads to planning the capacity of the logistics network, which means: “I know the vehicle capacity of the road sections, when they become saturated and when they need maintenance; the same happens in the port system, because we can foresee the increase in cargo, container movement, rise in exports and imports, critical points and whether it is necessary to expand or guarantee maintenance so that it works better.”
In his opinion, Guatemala lost the capacity to plan the logistics network service eight years ago and although there are master investment plans, they have not been translated into the execution of resources.
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He exemplified that in the Guatemalan Pacific, some 900 thousand containers are being moved annually and due to the projections for cargo and exports, a capacity of 1.4 million should be reached, which implies the expansion of the docks, the space in the maneuvering area, investment in cranes or new yards for refrigerated cargo; and these investments are not made overnight, but rather take between 4 and 5 years, and the execution of the expansion would take the same amount of time.
In terms of roads, he cited the expiration of the Palín-Escuintla Highway concession as an example, since it had been known for 25 years when it would expire and that when it ended, there would not be the same amount of traffic and the load would increase, so the width and dimensions of the road surface had to be foreseen. “Therefore, Guatemala’s logistics network is vulnerable due to the lack of planning.”
For Douglas González, former vice-minister of Micivi and independent political analyst, the entire road construction system has collapsed and requires major surgery. The challenge is to transform the infrastructure institutions, reform the ministry and the Public-Private Partnerships (PPP) Law, without stopping public works and addressing emergencies arising from the rains. In his opinion, the ineffectiveness of Micivi in the last 10 years is taking its toll today.
No responsiveness
Regarding the response capacity to deal with emergencies, Benavides identified that the entity in charge of responding to these emergencies within Micivi are the Road Zones, which belong to the General Directorate of Roads (DGC). However, “for many years those who work there have responded to political favors, are hired under the 031 line or do not have the capacity or presence in the areas when a problem occurs.”
He reiterated that today there is no budget in the Road Conservation Unit (Covial) to provide maintenance; the DGC Road Zones do not respond because they do not have the capacity and the only agency that is responding to emergencies in the road area is the Army Corps of Engineers, which does not have sufficient materials, machinery or territorial deployment, which are strong limitations.
In the case of emergencies in the port system, these are the exclusive responsibility of the EPQ in the Pacific and of the Santo Tomás de Castilla National Port Company (Empornac) in the Atlantic. “But when one looks at the contingency programs, they do not include issues of attention to anchorages and the emergency structures are not defined.”
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He said that something that could also start to affect is the air issue, but that at the moment there are still no effects, because commercial aviation depends heavily on the cargo of packages and some perishable products.
But then, if there are problems on the runway (in the taxiway area), it is the same as on any road and if preventive maintenance is not carried out, problems with aircraft sliding, damage to the front landing gear and other things begin. “If this is not addressed, the departure or arrival of aircraft is delayed, especially commercial ones.”
He noted that there is no emergency preparedness program in the rainy season in that area either, even though winter lasts at least five months each year.
González said that the Government is talking about several important infrastructure projects to be carried out, but under the current conditions of Micivi, it is almost impossible to carry out quality work.
To achieve this, the service should be outsourced via UNOPS – United Nations Office for Project Services – in the case of roads and ICAO – International Civil Aviation Organization – in the case of AILA, if results are to be seen. This, while the governance of Micivi is reformed or a new infrastructure ministry is created. In the case of the metro, although it is a large-scale project, it is easier to carry out a PPP via the municipality, he suggested.
“Attention is urgently needed”
Ricardo Rodriguez, an analyst at the Central American Business Intelligence (CABI) firm, said that there are now several catastrophes affecting the logistics chain at the same time, and “the Palín-Escuintla Highway must be fixed as soon as possible, because it is a section that goes to EPQ and everything that happens for foreign trade. The AILA must be improved, because it is the face of the country and we depend on the ports for fuel and other products, so all of this must be resolved as soon as possible.”
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He recalled that there is a lot of legislation that dates back 40 years, while the conditions of the country have changed drastically, so there must be a complete reengineering, but there is influence of political issues, especially from the Congress of the Republic, which makes that in the end, everything is a matter of negotiations, so the process will not advance quickly.
“What has been discussed recently may be a faster mechanism, but we would have to go into the details of how it will be carried out for AILA (the APP), to free it from the institutions involved and hand it over to a company with a more immediate margin of maneuver.”
Position of the builders
José Fernando Orellana Wer, executive director of the Guatemalan Chamber of Construction (CGC), commented that the administrations prior to this government have been negligent in addressing one of the crucial actors for economic development, which is critical infrastructure.
“The lack of transparency and technical criteria, corruption, the absence of prioritization, the lack of planning and supervision in the works being carried out and permanent improvisation have been the norms in recent governments. This has led to the deplorable state that we see today and is what the current administration found,” he said.
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“The government of President Bernardo Arévalo has an important challenge, which is to start a process to reverse the years of delay and neglect that critical infrastructure has suffered. In this sense, it will be up to him to find a solution to achieve the effective and adequate operation of APM Terminals, make the decisions and sign the necessary contracts.”
He also suggested that the Government implement a maintenance plan for priority roads to prevent the sections from continuing to deteriorate until they are completely worn out.
“The construction sector welcomes the fact that Micivi approved the Final Engineering Study for the Escuintla-Puerto Quetzal Highway because it shows significant political will to promote and close a PPP for the operation and maintenance of this highway that is in critical condition. We will see how its effective operation develops.”
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