First phase of Cuba’s Mariel port update opens

Posted on Monday, 01.27.14

First phase of Cuba's Mariel port update opens
BY MIMI WHITEFIELD
MWHITEFIELD@MIAMIHERALD.COM

Cuban President Raúl Castro and Brazilian President Dilma Rousseff
snipped a ribbon Monday to mark the opening of the first phase of the
Port of Mariel renovation, a nearly $1 billion project that is largely
financed by Brazil.

Better known in Miami as the departure point for the 1980 Mariel
Boatlift, Mariel will become Cuba's main foreign trade port and work in
conjunction with the island's new Mariel Special Development Zone,
essentially a foreign trade zone that provides tax and customs breaks
for enterprises within its 180 square miles.

For centuries Havana, 28 miles east of Mariel, has been the hub of
international commerce in Cuba.

Castro called the Mariel renovation "a transcendental project for the
national economy."

The first phase of the port project includes a 2,290-foot long wharf
that Granma, the Communist Party newspaper, said would allow Mariel to
handle Post-Panamax ships that will traverse the Panama Canal when its
expansion is completed in the second half of 2015.

Castro said Cuba's "geographic location along the route of the main
maritime transportation flows in our hemisphere will favor its
consolidation as a regional logistics platform of the first order."

But port analysts say Mariel won't reach its full potential as a
trans-shipment port — where Post-Panamax container ships discharge cargo
that is loaded on smaller feeder ships bound for ports too shallow to
accommodate the big ships — as long as the U.S. embargo against Cuba
remains in place.

That puts the largest market in the Americas out of bounds for cargo
trans-shipped through Cuba. PortMiami is currently in the midst of a
dredging project that should make it big-ship ready by the time the
canal expansion is completed.

The Mariel project is an indication of growing friendliness between
Brasilia and Havana. It was Rousseff's second visit as president to Cuba
and she said that the cooperation on Mariel was "a symbol of our lasting
friendship.''

During his speech at Mariel, Castro noted the project "has depended on
important financing from the Brazilian government at advantageous terms
that began under the presidency of Lula (President Luiz Inacio Lula da
Silva, Rousseff's predecessor) and it has not only been a great help in
building the container terminal but also in other public works such as
highways, networks, rail lines and dredging the bay."

The $957-million project was financed by a $682 million loan from
Brazil's National Bank of Economic and Social Development with the rest
of the financing coming from Cuba. Rousseff noted that Cuba purchased
more than $800 million in goods and services from Brazilian suppliers
during construction.

A subsidiary of the Brazilian construction giant Odebrecht is working on
the port — and that has landed Odebrecht in hot water in some Cuban
exile circles.

Another Odebrecht company, Odebrecht USA, has won major public contracts
from American Airlines Arena to the North and South Terminals at Miami
International Airport but it does no work in Cuba.

Some exiles contend that Odebrecht shouldn't be awarded public contracts
if its parent company does business in Cuba.

A 2012 state law that appeared to target Odebrecht USA prohibited state
and local governments from hiring companies with business ties to Cuba
for any projects worth at least $1 million. Odebrecht sued and an
appeals court ruled in its favor in May.

The priority during the next phase of improving Cuba's transportation
network, Castro said, will be upgrading the island's rail system to help
give the renovated port more value and lower transportation costs.

Rousseff said Brazil would be providing financing of more than $200
million during the second phase of the Mariel renovation. When the
project is completed, the port is expected to be able to handle 3
million containers annually.

Rousseff also said there was growing interest on the part of Brazilian
companies in locating in the Mariel Special Development Zone.

Source: First phase of Cuba's Mariel port update opens - Business -
MiamiHerald.com -
http://www.miamiherald.com/2014/01/27/3896861/first-phase-of-cubas-mariel-port.html