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Gateway to a continent
on: October 01, 2010 In: Columns & Interviews, Transport & LogisticsTags: No Comments
manta is a "canton" – a subdivision of a province – on Ecuador's west coast, with a population of about 190,000. It is also home to the closest port to China in all of Latin America.
"Manta can be the platform for China to access Latin America," said Jorge Hidalgo, consul-general of Ecuador in Shanghai. "Right now China is taking products to the west coast of the US, overland into Latin America and across to the east coast. We would like to give them another option."
The port sits at the head of the Manta-Manaus Corridor, a 2,400-kilometer overland road-and-river route being developed between Ecuador and Brazil. Ships would dock at Manta and unload their cargo onto trucks, which would then travel to Quito, over the Andes and down the other side to the Amazon River. From there the cargo would journey on to Brazil, via Peru, by boat. The connection is scheduled for completion in 2011.
A subsidiary of Hong Kong-based Hutchison Port Holdings (HPH) initially won the US$468 million contract to expand deepwater facilities and operate Manta Port, but it withdrew in early 2009.
Jaime Estrada, mayor of Manta, spoke to China Economic Review about his development plans.
Q: Manta will be home to one of Ecuador's new special economic zones (SEZs). What opportunities will this create for Chinese business?
A: The government is about to approve the creation of special areas of economic development (ZEDEs), one of which will be located in Manta. This scheme will provide China and countries that want to invest in Ecuador with infrastructure, skilled human resources, and a regulatory framework to facilitate trade. There will also be tax advantages linked to the creation of new jobs, technological investment and assisting less developed areas.
Q: China has enjoyed great success with its own SEZs. To what extent can Ecuador learn from China in developing trade and investment?
A: China and other Asian countries have undergone major industrial and commercial development in recent decades and this is partly due to the implementation of SEZs. I consider them to be our role models. Ecuador has traditionally had excellent relations with China. These relations have been strengthened in recent years through investment in the oil industry and infrastructure, which allows us to assimilate experiences from China.
Q: Manta Port has great potential. Why did HPH pull out of the project?
A: This was due to adverse market conditions, arising from the impact of the global financial crisis on international trade. Manta Port Authority immediately took charge and construction of deep water facilities will continue as planned. Several companies have expressed an interest in financing expansion as well as operating the port.
Q: Can Manta Port become the access point for Chinese companies entering Latin America? What kind of infrastructure investment is required to achieve this goal?
A: The port has various factors working in its favor: it is located only 25 nautical miles from shipping routes; its existing port, airport and refinery development projects; its position on the Manta-Manaus route; and the ZEDE. Manta is certainly in a position to offer logistical support to international trade coming out of China and Asia. We are confident that we will become strategic partners and their front door to Latin America. Significant investment is required to consolidate this ambitious project, whether it is for deep water port facilities, road infrastructure or airport modernization.
Q: To what extent are Chinese companies already involved in infrastructure projects in the Manta and Manabi province?
A: The oil sector has been the chief recipient of Chinese capital, but in recent months there have been major investments in areas like power generation and telecom. In Manabai, Tiesiju Engineering Group is building one of the largest water projects in the region. A number of other Chinese companies have also expressed an interest in participating in infrastructure projects in Manabi.
Q: Ecuador is keen to diversify its exports to China. What role can local governments play in this?
A: The coordination between different public bodies and Manta in Manabi province has resulted in the creation of an investment promotion agency, Invest MANABI. The agency's mission is to promote various regional products as well as attract foreign direct investment. Regional governments through incentives specified with the support of the national government are seeking a share of foreign companies in the territory Manabi.
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