Potential ZEDE developers seem to be risk-averse when it comes to developing the infrastructure needed for them to succeed.
Juan Orlando Hernandez recently traveled to Asia, picking up the slightly overdue feasibility report for a ZEDE in southern Honduras from the Korean International Cooperation Agency, (KOICA). The project being studied is to develop a deep water port in the city of Amapala, on El Tigre island two km off the Honduran Pacific coast, as well as a logistics center in the municipality of Alianza on the adjacent mainland.
Why develop a port at Amapala?
For years the Panama Canal has been a bottleneck to shipping from Asia to the Atlantic coast ports of the US and Europe. The largest ships today cannot fit in the locks, and the canal simply has insufficient capacity, even for existing ships which do fit in the locks. There's often a one to three day wait to go through.
The delay and size restrictions have prompted three projects along the Pacific coast of Central America.
The Panama Canal authority itself is building a new set of locks that can accept
larger ships, but its overall capacity is limited by the amount of fresh water
available in drought years, as at present. Under current conditions only 17 cargo ships a day can transit the canal.
There is a separate Chinese project to build a new sea level canal across Nicaragua underway.
Honduras' southern ZEDE is yet another alternative, in which container ships would dock in Amapala and unload their cargo to be transported and sorted and stored in the logistics area. It would then get trucked over a new road from Nacaome to Puerto Cortés where it would be matched with container ships docked there for delivery to Atlantic ports.
Hernández says the feasibility report was entirely positive. Despite this, there was no announcement of the proposed ZEDE being formed.
Instead, Hernandez announced an agreement for cooperation between the port of Busan in South Korea and the port of Amapala to improve their training and port procedures.
At Hernández's very next stop, in Japan, he solicited something never before discussed as a Honduran government infrastructure project. He asked the Japanese International Cooperation Agency (JICA) to finance the building of a bridge from the island of Zacate Grande to Amapala.
Zacate Grande is itself connected via a bridge to the mainland, and houses many vacation ranches owned by wealthy Hondurans.
There's no reason to develop the port at Amapala without also connecting it to the mainland to take advantage of the port facilities. Previous discussions of the Amapala port had always included development of the bridge as part of the ZEDE development.
Now the government of Honduras is seeking to get someone else to pay for the development of this critical piece of infrastructure for the ZEDE, rather than have the ZEDE itself fund it. Was this change dictated by the feasibility report? Did that report separate the bridge from the port development and say Honduras should provide it as part of the infrastructure? JICA did not commit to building the bridge, but agreed to study the project.
On his return from his Asian trip, Hernández signed contracts with Mexican companies for development of two more sections of the new highway to connect the south coast of Honduras with the Caribbean coast port of Puerto Cortés. The funds for this construction are borrowed from Mexico.
This roadway is also a strategic piece of infrastructure to enable planned ZEDEs in the south of Honduras. Without easy transport between the Pacific and Caribbean coasts there is no reason to develop the port of Amapala. This new roadway is scheduled to open in 2017.
For all the hype of a ZEDE as a way to develop Honduras, the current proposal seems to be requiring a large outlay in infrastructure development from the host country before there is even a commitment of ZEDE development.
Hernández promises ZEDE announcements soon...
Showing posts with label ZEDE. Show all posts
Showing posts with label ZEDE. Show all posts
Friday, September 11, 2015
Wednesday, July 29, 2015
Juan Orlando Hernández Visits Asia
Honduran President Juan Orlando Hernández traveled to Asia last week to further joint development agreements. He returned with many wishes of goodwill, but few concrete commitments.
His trip took him to South Korea, Japan, and Taiwan. During the trip, Hernandez promoted Honduras as a gateway for Asian commerce with all of Central America.
The first stop on the tour was South Korea. There he signed a memo of understanding with the port of Busan, to develop commerce between Busan and ports in Honduras. The agreement anticipates cooperation in port management and development with the goal of increasing shipping between Honduran ports and Busan. In a meeting with the Busan Chamber of Commerce Hernandez spoke of the investment opportunities in Honduras and his goal of making Honduras the shipping logistical center of the Americas.
What Honduran ports? The Honduran press was vague about this, but there is every reason to think the main target is Honduras' port facilities on the Pacific Coast, where the country has a small coastal access via the Gulf of Fonseca.
Hernández also signed an agreement with the Korean government to supply Honduras with electric cars and establish a network of charging stations for them. To do this, Korea also agreed it would have to improve the electricity supply and distribution network in Honduras.
Wrapping up his achievements, Hernandez asked the World Taekwando Federation (WTF) in Korea to send taekwando teachers to Honduras to train Honduran children in schools, and in public parks and government buildings. He asked that this program be funded through the Korean International Cooperation Agency (KOICA), and that the WTF do this as part of its Taekwando Peace Corps. He is quoted as saying
While in South Korea, Hernández also took delivery of the long-awaited ZEDE feasibility study, completed by KOICA. Alert readers may recall that one of the identified target areas for development as a ZEDE is the Honduran Pacific port of Amapala, on El Tigre Island in the Gulf of Fonseca. Nonetheless, reporting on the Korean leg of Hernández' trip does not mention ZEDE development.
In the next stop on his trip, in Japan, Hernandez sought further cooperation between the Japanese International Cooperation Agency (JICA) and Honduras. He received assurances that Japan would fund $135 million in renovations to two existing hydroelectric projects, Rio Lindo and Cañaveral, to raise them to 60 megawatts output.
He also asked JICA to supply Honduras with teachers of art and sports to train Honduran children in schools and public places as part of his vision of how to deal with juvenile delinquency, complementing his endorsement of Taekwondo while in South Korea.
In addition, Hernandez requested that JICA fund the construction of a bridge from the city of Amapala, on El Tigre island, to the mainland. This might be characterized as Honduras' own Bridge to Nowhere: the entire municipality of Amapala, which includes the islands in the Gulf of Fonseca, has a population reported to be around 11,000.
So why the interest in a bridge there?
The bridge is cornerstone infrastructure needed for Hernandez's vision of ZEDEs in southern Honduras. The Rough Guide to Honduras evocatively describes the town of Amapala, located on Isla del Tigre, as "once the country’s major Pacific port and now a decaying relic of the nineteenth century". What Hernández envisions is making Amapala a major port again, with other people putting up the development capital.
Moving on to Taiwan, Hernández signed an agreement to promote mutual trade and investment. He made presentations to a group of businessmen and met with the Taiwanese government to pitch Honduras as Taiwan's way of getting more Taiwanese goods into Central America by exploiting Honduras's membership in CAFTA.
What did not come out of the Asian trip was any announcement of a group of investors prepared to take on development of the ZEDE opportunity. Nonetheless, the echoes of that initiative were there in the background, as they have been on most of Hernández' foreign presentations.
For example, earlier this month a Honduran commission traveled to Mexico to secure funding to complete two more segments of another infrastructure project that would be necessary to support Hernandez's ZEDE vision, the so called "dry canal": a four lane highway from Honduras's Pacific Coast to its Caribbean coast.
The two road segments, already under construction by Mexican firm CAABSA and totaling a length of 54 km., need a further $30 million to be completed. A third segment of 46 km. is being built by a Brazilian firm, funded by a loan from the Brazilian Development Bank. The whole of this roadway is supposed to be completed in 2017 and is necessary to make ZEDE developments along Honduras's Pacific coast economically feasible.
No reports exist in Honduran press relating the results of the Mexican trip. But combined with Hernández' pursuit of Japanese government funding for the bridge to Amapala, the mission of the Mexican trip shows that developing the Amapala port remains the focus of the Hernández government. Whether it will attract the foreign investment required, as a ZEDE or otherwise, remains to be seen.
His trip took him to South Korea, Japan, and Taiwan. During the trip, Hernandez promoted Honduras as a gateway for Asian commerce with all of Central America.
The first stop on the tour was South Korea. There he signed a memo of understanding with the port of Busan, to develop commerce between Busan and ports in Honduras. The agreement anticipates cooperation in port management and development with the goal of increasing shipping between Honduran ports and Busan. In a meeting with the Busan Chamber of Commerce Hernandez spoke of the investment opportunities in Honduras and his goal of making Honduras the shipping logistical center of the Americas.
What Honduran ports? The Honduran press was vague about this, but there is every reason to think the main target is Honduras' port facilities on the Pacific Coast, where the country has a small coastal access via the Gulf of Fonseca.
Hernández also signed an agreement with the Korean government to supply Honduras with electric cars and establish a network of charging stations for them. To do this, Korea also agreed it would have to improve the electricity supply and distribution network in Honduras.
Wrapping up his achievements, Hernandez asked the World Taekwando Federation (WTF) in Korea to send taekwando teachers to Honduras to train Honduran children in schools, and in public parks and government buildings. He asked that this program be funded through the Korean International Cooperation Agency (KOICA), and that the WTF do this as part of its Taekwando Peace Corps. He is quoted as saying
“Violence is one of the serious social problems facing Latin American countries, and I think taekwondo is the most effective tool to solve the issue".Hernandez had previous contact with the WTF while President of the Honduran Congress, when he attended a dinner in Korea to honor then-president Porfirio Lobo Sosa, who holds a 3rd Kukkiwon Dan certificate.
While in South Korea, Hernández also took delivery of the long-awaited ZEDE feasibility study, completed by KOICA. Alert readers may recall that one of the identified target areas for development as a ZEDE is the Honduran Pacific port of Amapala, on El Tigre Island in the Gulf of Fonseca. Nonetheless, reporting on the Korean leg of Hernández' trip does not mention ZEDE development.
In the next stop on his trip, in Japan, Hernandez sought further cooperation between the Japanese International Cooperation Agency (JICA) and Honduras. He received assurances that Japan would fund $135 million in renovations to two existing hydroelectric projects, Rio Lindo and Cañaveral, to raise them to 60 megawatts output.
He also asked JICA to supply Honduras with teachers of art and sports to train Honduran children in schools and public places as part of his vision of how to deal with juvenile delinquency, complementing his endorsement of Taekwondo while in South Korea.
In addition, Hernandez requested that JICA fund the construction of a bridge from the city of Amapala, on El Tigre island, to the mainland. This might be characterized as Honduras' own Bridge to Nowhere: the entire municipality of Amapala, which includes the islands in the Gulf of Fonseca, has a population reported to be around 11,000.
So why the interest in a bridge there?
The bridge is cornerstone infrastructure needed for Hernandez's vision of ZEDEs in southern Honduras. The Rough Guide to Honduras evocatively describes the town of Amapala, located on Isla del Tigre, as "once the country’s major Pacific port and now a decaying relic of the nineteenth century". What Hernández envisions is making Amapala a major port again, with other people putting up the development capital.
Moving on to Taiwan, Hernández signed an agreement to promote mutual trade and investment. He made presentations to a group of businessmen and met with the Taiwanese government to pitch Honduras as Taiwan's way of getting more Taiwanese goods into Central America by exploiting Honduras's membership in CAFTA.
What did not come out of the Asian trip was any announcement of a group of investors prepared to take on development of the ZEDE opportunity. Nonetheless, the echoes of that initiative were there in the background, as they have been on most of Hernández' foreign presentations.
For example, earlier this month a Honduran commission traveled to Mexico to secure funding to complete two more segments of another infrastructure project that would be necessary to support Hernandez's ZEDE vision, the so called "dry canal": a four lane highway from Honduras's Pacific Coast to its Caribbean coast.
The two road segments, already under construction by Mexican firm CAABSA and totaling a length of 54 km., need a further $30 million to be completed. A third segment of 46 km. is being built by a Brazilian firm, funded by a loan from the Brazilian Development Bank. The whole of this roadway is supposed to be completed in 2017 and is necessary to make ZEDE developments along Honduras's Pacific coast economically feasible.
No reports exist in Honduran press relating the results of the Mexican trip. But combined with Hernández' pursuit of Japanese government funding for the bridge to Amapala, the mission of the Mexican trip shows that developing the Amapala port remains the focus of the Hernández government. Whether it will attract the foreign investment required, as a ZEDE or otherwise, remains to be seen.
Monday, January 26, 2015
Hernandez loses vote on Military Police
Congress voted 67 to 61 over the weekend to not change the Honduran constitution to include Policia Militar de Orden Público (PMOP). So much for Oscar Alvarez's claim that he had 80 solid votes in favor, made on the 18th of January. The opposition in Congress held together and won.
Those that wanted the constitutional change included the entire National party bench (48 members) plus all of the Christian Democrats (2), the only UD party member, and 10 members of the Liberal party. Those opposed to making the constitutional change included the entire Libre party bench ( 37 members) plus the 13 members of PAC, the only PINU party member, and 17 members of the Liberal party.
Only the Liberal party members split their vote on this motion, and today there was talk of making those Liberal party members who voted in favor of the constitutional change face party disciplinary hearings for breaking with the party leadership.
So what changes does this mean for the Militarized Police? Nothing. As things stand, they continue to function as they do today under the law that created them (decreto 168-2013) until Congress votes not to fund them further using the security tax.
This, however, is the first significant defeat the National party has received since becoming the majority in Congress under this President. In the face of this defeat, Juan Orlando Hernandez vowed to hold a public referendum asking the question "Are you in favor of giving the Militarized Police of Public Order a permanent place in the constitution of the Republic?". He has submitted a law to Congress to submit the question to the Honduran electorate in the 2017 general election, and the bill would have the effect of changing the Honduran constitution in the way the National party could not through Congress.
However, the bill introduced contains some additions to the language that were not in the bill submitted to Congress for approval.
In Article 274, the proposed constitutional changes include language letting towns, villages, and ZEDEs request that the PMOP, or other parts of the Armed Forces [emphasis added], provide them with a public security service. The proposed changes to Article 329 include granting the Executive branch the ability to declare ZEDEs as "special security zones", and gives the Executive branch the right to declare regions, populated or not, as "special security zones", whose security is provided by the PMOP.
This is overreaching by Hernandez, contemplated neither in the ZEDE authorization law nor previous proposals about making the Militarized Police mandated in the constitution.
Those that wanted the constitutional change included the entire National party bench (48 members) plus all of the Christian Democrats (2), the only UD party member, and 10 members of the Liberal party. Those opposed to making the constitutional change included the entire Libre party bench ( 37 members) plus the 13 members of PAC, the only PINU party member, and 17 members of the Liberal party.
Only the Liberal party members split their vote on this motion, and today there was talk of making those Liberal party members who voted in favor of the constitutional change face party disciplinary hearings for breaking with the party leadership.
So what changes does this mean for the Militarized Police? Nothing. As things stand, they continue to function as they do today under the law that created them (decreto 168-2013) until Congress votes not to fund them further using the security tax.
This, however, is the first significant defeat the National party has received since becoming the majority in Congress under this President. In the face of this defeat, Juan Orlando Hernandez vowed to hold a public referendum asking the question "Are you in favor of giving the Militarized Police of Public Order a permanent place in the constitution of the Republic?". He has submitted a law to Congress to submit the question to the Honduran electorate in the 2017 general election, and the bill would have the effect of changing the Honduran constitution in the way the National party could not through Congress.
However, the bill introduced contains some additions to the language that were not in the bill submitted to Congress for approval.
In Article 274, the proposed constitutional changes include language letting towns, villages, and ZEDEs request that the PMOP, or other parts of the Armed Forces [emphasis added], provide them with a public security service. The proposed changes to Article 329 include granting the Executive branch the ability to declare ZEDEs as "special security zones", and gives the Executive branch the right to declare regions, populated or not, as "special security zones", whose security is provided by the PMOP.
This is overreaching by Hernandez, contemplated neither in the ZEDE authorization law nor previous proposals about making the Militarized Police mandated in the constitution.
Tuesday, February 11, 2014
Amapala, La Alianza, and Nacaome Studied for ZEDE Development
Honduras yesterday completed the announcement that Ebal Diaz started on February 5. At that time he pre-announced that a ZEDE would be established in Choluteca or Valle. His latest announcement adds some details, but it turns out there is a lot more information that could be shared, and has not been.
On Monday February 10 Diaz, along with Juan Orlando Hernández, annnounced that in cooperation with the Korean International Cooperation Agency (KOICA) they would do a study of where in southern Honduras to establish a ZEDE. Their announcement said that once an area is selected, the Koreans will develop a master plan for the administration of the ZEDE. Diaz said:
But there's a lot Diaz didn't say that's revealed in a document freely down loadable on the Honduran Ministry of Planning and External Cooperation (SEPLAN) website. This document, signed by members of the previous administration on August 23, 2012, lays out the project more fully.
Titled in English "The Feasibility Study and Master Plan for the Establishment of a Special Development Region in Honduras", the document is signed by representatives of KOICA, Coalianza, SEPLAN, and the then-Vice President of Honduras, Maria Guillen de Bogran.
This agreement was made before the current ZEDE law was passed (in June 2013) and thus refers to Regiones Especiales de Desarrollo (RED), the predecessor to ZEDES in the model cities legislation that was found unconstitutional.
KOICA agreed to contribute $4 million, and the Honduran government an unspecified amount, in support of the project. The first step called for was a feasibility study of three particular locations in southern Honduras.
The studied locations are Amapala in Choluteca, and La Alianza and Nacaome in Valle. Amapala is on Tigre Island in the Gulf of Fonseca. La Alianza is located on the Guascoran river which forms the boundary between El Salvador and Honduras and currently has poor access to transportation. Nacaome is on the Pan American highway which runs in one direction to El Salvador and in the other direction to Choluteca and on to Nicaragua.
The record of discussions between KOICA and the Honduran government indicates that the feasibility study should take three months from its inception. The three feasibility studies will be given to the Honduran government, which will then have one month to select one of the three locations to build out. Then, KOICA will do a more complete feasibility study, a concept design, a master plan for the design and operation of the ZEDE, and an implementation plan, all to be delivered about 19 months after the site is selected, or about halfway through the Hernández administration's term.
While the agreement between KOICA and the Honduran government was signed back in 2012, apparently Porfirio Lobo Sosa decided to sit on it. Juan Orlando Hernández, who traveled to Korea to see their economic development zones while head of Congress, and who supports the idea of model cities and economic development zones in Honduras, decided to proceed.
Like the model cities law, the ZEDE law has been contested, and on February 8 the Honduran Supreme Court admitted a challenge to the law. The challenge alleges that the ZEDE law violates articles 294, 303 y 329 of the Honduran constitution. These clauses have to do with the ordering of the Honduran territory, the justice system, and the economic development of Honduras.
After admitting the legal challenge, the Constitutional branch of the court passed the case on to the Public Prosecutor, Oscar Chinchilla, for comments. Chinchilla was previously the lone Supreme Court justice in the Constitutional branch who did not find the model cities law unconstitutional. Further, he traveled with Hernandez on the trip to visit Korean economic development zones. This suggests it is unlikely he will find anything wrong with the ZEDE law.
In theory, Honduras says it has local buy-in from the mayors of these towns. But the ZEDE law exempts lands adjacent to the Gulf of Fonseca and on the Caribbean coast from having to hold a referendum for the population to approve being incorporated into a ZEDE.
So it will not surprise us if Amapala ends up being selected for development: the possibilities there include everything from a new port to luxury ocean residential properties, all in an area that has continued to be subject to tension with Honduras' neighbors on the Gulf of Fonseca. All this, and no need to hold a popular referendum if this site is selected.
On Monday February 10 Diaz, along with Juan Orlando Hernández, annnounced that in cooperation with the Korean International Cooperation Agency (KOICA) they would do a study of where in southern Honduras to establish a ZEDE. Their announcement said that once an area is selected, the Koreans will develop a master plan for the administration of the ZEDE. Diaz said:
It's an ambitious project which we start this day with a study and design of the country's first economic zone.
But there's a lot Diaz didn't say that's revealed in a document freely down loadable on the Honduran Ministry of Planning and External Cooperation (SEPLAN) website. This document, signed by members of the previous administration on August 23, 2012, lays out the project more fully.
Titled in English "The Feasibility Study and Master Plan for the Establishment of a Special Development Region in Honduras", the document is signed by representatives of KOICA, Coalianza, SEPLAN, and the then-Vice President of Honduras, Maria Guillen de Bogran.
This agreement was made before the current ZEDE law was passed (in June 2013) and thus refers to Regiones Especiales de Desarrollo (RED), the predecessor to ZEDES in the model cities legislation that was found unconstitutional.
KOICA agreed to contribute $4 million, and the Honduran government an unspecified amount, in support of the project. The first step called for was a feasibility study of three particular locations in southern Honduras.
The studied locations are Amapala in Choluteca, and La Alianza and Nacaome in Valle. Amapala is on Tigre Island in the Gulf of Fonseca. La Alianza is located on the Guascoran river which forms the boundary between El Salvador and Honduras and currently has poor access to transportation. Nacaome is on the Pan American highway which runs in one direction to El Salvador and in the other direction to Choluteca and on to Nicaragua.
The record of discussions between KOICA and the Honduran government indicates that the feasibility study should take three months from its inception. The three feasibility studies will be given to the Honduran government, which will then have one month to select one of the three locations to build out. Then, KOICA will do a more complete feasibility study, a concept design, a master plan for the design and operation of the ZEDE, and an implementation plan, all to be delivered about 19 months after the site is selected, or about halfway through the Hernández administration's term.
While the agreement between KOICA and the Honduran government was signed back in 2012, apparently Porfirio Lobo Sosa decided to sit on it. Juan Orlando Hernández, who traveled to Korea to see their economic development zones while head of Congress, and who supports the idea of model cities and economic development zones in Honduras, decided to proceed.
Like the model cities law, the ZEDE law has been contested, and on February 8 the Honduran Supreme Court admitted a challenge to the law. The challenge alleges that the ZEDE law violates articles 294, 303 y 329 of the Honduran constitution. These clauses have to do with the ordering of the Honduran territory, the justice system, and the economic development of Honduras.
After admitting the legal challenge, the Constitutional branch of the court passed the case on to the Public Prosecutor, Oscar Chinchilla, for comments. Chinchilla was previously the lone Supreme Court justice in the Constitutional branch who did not find the model cities law unconstitutional. Further, he traveled with Hernandez on the trip to visit Korean economic development zones. This suggests it is unlikely he will find anything wrong with the ZEDE law.
In theory, Honduras says it has local buy-in from the mayors of these towns. But the ZEDE law exempts lands adjacent to the Gulf of Fonseca and on the Caribbean coast from having to hold a referendum for the population to approve being incorporated into a ZEDE.
So it will not surprise us if Amapala ends up being selected for development: the possibilities there include everything from a new port to luxury ocean residential properties, all in an area that has continued to be subject to tension with Honduras' neighbors on the Gulf of Fonseca. All this, and no need to hold a popular referendum if this site is selected.
Wednesday, February 5, 2014
First ZEDE Pre-announced
Ebal Diaz, advisor to Juan Orlando Hernández, pre-announced the announcement of the first Zona de Empleo y Desarrollo Económico (ZEDE) in Honduras.
ZEDEs, private economic development zones, are the concept that replaced model cities after that law was ruled unconstitutional. Arthur Phillips has an excellent summary on how the ZEDE law came into being here.
The new ZEDE will be on the Pacific coast of Honduras and will reportedly occupy a number of municipalities in the department of Choluteca and possibly Valle as well. Diaz said:
Diaz indicated that the project had both Honduran and international funding, and would be formally announced on February 10.
ZEDEs, private economic development zones, are the concept that replaced model cities after that law was ruled unconstitutional. Arthur Phillips has an excellent summary on how the ZEDE law came into being here.
The new ZEDE will be on the Pacific coast of Honduras and will reportedly occupy a number of municipalities in the department of Choluteca and possibly Valle as well. Diaz said:
I dare say that on February 10 prestigious investors from all over the world will come to the country to invest in factories in several locations in the Departments of Choluteca and Valle.
Diaz indicated that the project had both Honduran and international funding, and would be formally announced on February 10.
Subscribe to:
Posts (Atom)