Guatemala is hoping to become an international transit hub with the construction of an Interoceanic Corridor that organizers say will excel in areas where the Panama Canal is struggling and transform the surrounding region's economic and social landscape.

Since its opening in 1914, the Panama Canal has gained a global reputation for cutting the crossing time and distance between the Atlantic and Pacific Oceans, as well as boosting trade between countries. 

The U.S., China, Japan, and South Korea are some of the main users of the canal, which is currently undergoing expansion work to accommodate larger ships.

However some say that despite the expansion, the Panama Canal simply cannot cater for some of the gargantuan vessels sailing the seas today.

Having realized this, in 1999 a group of predominantly Guatemalan businessmen decided to undertake a monumental project that would unite the two great oceans at the other end of Central America.

Interoceanic Joint Board president Guillermo Catalan told www.freshfruitportal.com he was hoping to develop international transport infrastructure to offer shippers more convenient commercial routes, making Guatemala a crucial link in the global supply chain.

"The project involves developing various transport systems to facilitate the movement of containers, gas, and other carbon-based products from ocean to ocean," he said.

The International Corridor will include a nearly straight four-lane highway that will be 372-km-long and 100-meters wide. This will run parallel to a freight rail line, as well as oil and gas pipelines.

Two deepwater ports will also be constructed on the Atlantic and Pacific Guatemalan coasts, each with the capacity to accommodate up to six ships of 22,000 twenty-foot equivalent units (TEU) each.

On top of that, the project will include areas designated for industrial, commercial and logistical development in a free trade zone adjacent to each port and along the length of the transit system.

Catalan added there would be transfer zones that would connect the domestic market with neighboring countries such as Honduras and El Salvador.

But that's not all, as the project - which already has the participation of 46 business entities as capital partners - may even create environmental conservation areas of both sides of the corridor.

'Increased quality of life'

Financing for the mammoth project is currently coming from seed capital provided by national and international private firms and investors, although around 90% of the total funds are from Guatemala.

"The separate stages of construction and operation will be financed by these firms, who acquired rights of way through long-term BOT [Build-operate-transfer] contracts that will last for around 40 to 50 years," Catalan said.

The Guatemalan businessman said the initiative's goal was to be an instrument of development for not just the country, but the entire region.

"The benefit of this project has multiple dimensions, with a huge economic, commercial and social scope," he added.

Some 6,000 jobs are expected to be generated from the Interoceanic Corridor, and up to 80,000 residents who live near the project could also benefit from its construction.

In addition, Catalan said it would increase the country's logistic and trade competitiveness, while also attracting foreign investment.

"This will lead to a better climate of certainty and opportunity for the development of businesses and other public and private initiatives," Catalan said.

"There will be an increase in both the quality of life and the human development possibilities throughout the entire region."

A new horizon for exporters

According to the president of the Interoceanic Joint Board, exporters from a huge range of countries stand to benefit immensely from the project by way of increased shipping capacity and lower tariffs.

"By having deepwater ports that are able to hold larger capacities, Guatemala will be able to receive much larger vessels, which could produce economies of scale for the whole of South America, thus reducing maritime transport costs," he said.

"The tariffs for maritime freight would be considerably reduced because of the increased number of direct routes, which would reduce stops needed at other ports and therefore lower the costs of fuel, time, and cargo management."

Currently, the project organizers are still in the process of acquiring landownership from the 3,743 residents located around the site area. Owners are being asked to voluntarily contribute their land in exchange for preferential status to the transport system.

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