Mexico clears legal roadblock to Punta Colonet development

Mexico clears legal roadblock to Punta Colonet development The Mexican government last week cancelled disputed mineral rights that have been a primary roadblock to the development of a planned Baja California competitor to the U.S. Southern California ports.
   The Punta Colonet mineral rights controversy is not going away though, as the owner of the now apparently worthless claims said it would appeal the government decision.
   The Colonet port and an accompanying rail project that would connect to U.S. main lines have been on the drawing boards for several years. It has progressed slowly, however, experiencing numerous delays, including that caused by the mineral rights issue.
   The Mexican government took steps to cancel the rights earlier this year and Grupo Minero Lobos, holder of the rights since 2005, allowed a 60-day response period to the cancellation pass without comment. Despite an appeals process that could last several years, cancellation of the mineral rights allows the Mexican government to complete a bidding process for the development of the Colonet port complex. Bidding is expected to start in December for the project, which is located about 150 miles south of San Diego. The schedule calls for a winner to be announced in mid-2008.
   Differing versions of the Punta Colonet port plan have ranged in cost from as much a $1 billion to $9 billion, and varied in scale from smaller than the Port of San Diego to as large as the ports of Long Beach and Los Angeles combined.
   The Mexican government's current vision of the port is in the 5 million-TEU-a-year range, about one-third the size of the Los Angeles-Long Beach port complex. This plan would make Punta Colonet about the size of the New York-New Jersey port complex, the third busiest U.S. container port complex. Container volume in 2006 for New York-New Jersey topped 5 million TEUs.
   Government officials earlier this month said they expect bids for the port/rail development and operations contract — both set to be offered to the same firm — to come in at a range of $5 billion to $6 billion.
   In April, Union Pacific pulled out of a plan to partner with Hong Kong-based port operator Hutchison Holdings to bid on the project. The Omaha, Neb.-based railroad has said since that it may look at other partnerships. UP's main rail lines through the U.S. Southwest are the most likely connection point for any rail from Colonet.
   Mexican construction firm Ideal and U.S. marine terminal operator SSA Marine have both indicated they will compete in bidding for the Colonet project.
   Last month, the Mexican government announced plans to spend upwards of $44.5 billion to upgrade and expand the country's transportation infrastructure under President Felipe Calder'n’s $250 billion national development plan for 2007-2012. The development of infrastructure to support Punta Colonet featured heavily in several major components of Calder'n’s plan.