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American Shipper

UP likely to ?watch from sidelines? on Punta Colonet development

UP likely to ôwatch from sidelinesö on Punta Colonet development

What first seemed to be a move by Union Pacific to break out of a partnership on a Mexican port development now appears to be a full withdrawal from the original plan by the Omaha, Neb.-based railroad.

   Last month, UP announced it was canceling its partnership with Hong Kong-based port operator Hutchison Port Holdings. The two formed the partnership to bid on the development of a proposed port complex at Punta Colonet in Baja California, Mexico. The port, as envisioned by the Mexican government, would eventually rival any U.S. West Coast port, including the complex in Los Angeles and Long Beach. Goods arriving at the Colonet port would be shipped via a new rail line to the main U.S. tracks just north of the U.S./Mexican border.

   The UP-Hutchinson proposal for Colonet would have seen Hutchison develop and operate the actual port in Mexico, while UP would have built a rail spur from main domestic tracks leading into Mexico. The plan envisioned the spur being in the Yuma, Ariz. area, and UP had conducted extensive site surveys in preparation for a bid.

   On breaking the Hutchison partnership, UP indicated it was still open to bidding with another partner on the Colonet project. However UP told the Associated Press on Thursday that it has no plans to revive the Yuma plans to serve the Colonet port.

   The railroad indicated that a different area, in the less developed Imperial County, could be looked at for the spur, but without a partner the firm would be “on the sidelines watching things unfold in Mexico.”

   The Mexican government is preparing to take bids on the Colonet plan, which some estimate could ultimately run upwards of $9 billion.

   Last week Mexican construction firm Ideal said it would compete in bidding for Colonet project. The company joins U.S. marine terminal operator SSA Marine on the potential bidder list.

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