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San Juan and Puerto Rico's Future Depends on the Train

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San Juan and Puerto Rico's Future Depends on the Train caribbeanbusinesspr.com THURSDAY, NOVEMBER 18, 2010 WEEKLY $2.00 ©2010 CASIANO COMMUNICATIONS INC. SSantini:antini: TThehe ttrainrain iiss ccoming!oming! SSanan JJuanuan aandnd PPuertouerto RRico’sico’s ffutureuture ddependsepends oonn tthehe ttrainrain En nuestras 27 modernas sucursales nuestro compromiso es brindarle un servicio confi able y de excelencia By John Marino pages 22-31 TOP STORY INSIDE SPECIALREPORTS Bayamón • Caguas • Cayey • Cidra • Dorado • Guaynabo • Gurabo Hato Rey • Humacao • Río Piedras • Santurce • San Lorenzo Prepa: Vía Verde Housing Stimulus Act boosts will be open mortgage originations page 41 Certifi ed public accountants, www.laboratoriosborinquen.com money managers and fi nancial to business consultants offer expert advice Tel. 787.743.0330 Does P.R. need 100% container hookups inspection at its ports? page 50 page 2 “40 años haciendo la diferencia” Local auto sales jump 18.9% in October page 58 A Special Report produced by For up-to-the-minute local, national, international and economic news in English, go to caribbeanbusinesspr.com now on 22 CARIBBEAN BUSINESS THURSDAY, NOVEMBER 18, 2010 51 CARIBBEAN BUSINESS THURSDAY, NOVEMBER 18, 2010 Continued from previous page to a separate inspection area outside performance for the container-se- funneled into only one inspection the processing line. curity programs; therefore, it will SATOUR to fulfi ll machine could conceivably create Despite the port director’s assur- be diffi cult to assess whether or not havoc. ances, the fact that 100% container 100% scanning achieves increased The slowing of cargo fl ow out scanning has not been implemented security. of a shipping company’s yard can anywhere else in the world creates Logistics: Space constraints at the San Juan’s economic potential adversely affect the logistics of the uneasiness among those affected. ports are a big concern. supply chain, which in turn can “This initiative hasn’t been Technology and infrastructure: drive up the cost of doing business implemented anywhere else. Environmental conditions have for all involved. If the shipping Studies by federal agencies and damaged equipment and caused Light-rail project is ‘backbone’ of $3 billion project to company runs out of ground space international security agencies delays, and infrastructure capacity at its facility, one of its few options show that inspecting 100% of the and equipment compatibility have transform city into world-class host destination is to stack containers one on top cargo is not a practical solution to presented diffi culties in the SFI pilot of another. The high labor rates the smuggling issue,” said Joselin program. involved in such contingencies Ramos, senior vice president of Consistency with risk manage- drastically increase operational CaribEx, an airfreight and maritime ment: Many in the security indus- costs, compromising already thin shipping company. try have said that 100% scanning is profi t margins. Moreover, by having One of the studies Ramos referred not consistent with accepted risk- to wait longer to pick up a container, to was conducted by the GAO on Puerto Rico Ports Authority management principles and diverts the trucking company’s costs also behalf of the U.S. Customs and Bor- Director Alberto Escudero resources away from other essential go up because now it is performing der Protection Agency (CBP), which security measures. fewer pickups and deliveries in the falls under the umbrella of the U.S. According to the GAO study, inci- same amount of time. These costs Department of Homeland Security. dents of technological breakdowns will be passed on to the distributor, The Security & Accountability for causing delays have occurred. In which might respond by increasing Every Port Act (SAFE) of 2006 discerned from the report that some Southampton, England, a piece of its inventories. All these cost called for testing the feasibility of of the objections raised by the GAO radiation-scanning equipment failed increases will eventually be passed scanning 100% of U.S.-bound cargo would not apply to Puerto Rico’s because of rainy conditions and on to the consumer. containers and implementing the inspection initiative. These are re- had to be replaced, resulting in two Despite the concerns shared by recommendations of the 9/11 Com- lated to the international trade and weeks of diminished scanning capa- most in the industry, Escudero insists mission Act (9/11 Act), which re- inspections being done in foreign bilities. Additionally, Port Qasim in 100% inspections shouldn’t be an quired full inspection of U.S.-bound ports where the incoming cargo Pakistan has experienced diffi culties issue because of the scanning-speed cargo containers by 2012. To fulfi ll would originate. with scanning equipment because of capabilities of the equipment. these requirements, CBP created the Nevertheless, other initiatives extreme heat. Both of those condi- “These machines will scan a Secure Freight Initiative (SFI) and objected to by the GAO would tions would be present locally. box in six to eight seconds,” he launched a pilot program at seven certainly apply to the local plan. The Ports director said the project said. “Boxes don’t move out of the seaports. The general conclusion of These are: can be carried out in spite of such shipping lines’ facilities all in one the report is that this initiative has Workforce planning: Increased trepidations. day. This should not be an issue.” many challenges and that overall it data generation would require ad- “The fact that this initiative hasn’t Escudero added that when would not be effective in accom- ditional personnel to handle the in- been implemented in any other place the machine detects something plishing the initial goal of curtail- creased volume. is not a valid reason for us not to requiring physical inspection of a ing drug and arms imports into the Measuring performance: There try it locally,” said Escudero. “We container, the container is removed country. CARIBBEAN BUSINESS have been diffi culties defi ning Continued on page 52 BY JOHN MARINO BUSINESS in an exclusive inter- The mayor believes there is a lot teams, the three-term mayor said. [email protected] view. In fact, the train’s fi rst phase riding on the train—namely, the Already known by its Spanish name should be nearly complete by the end future economic aspirations of San SATOUR, the San Juan Automated an Juan Mayor Jorge Santini is of this four-year term. Juan, and by extension, all of Puerto Urban Transportation System will Spledging to begin construction of “I am going to build this train. I Rico. The train, combined with the make existing facilities, from the a $400 million light-rail train proj- don’t care what anybody says or existing Urban Train and other fu- Puerto Rico Convention Center to ect through San Juan next year that who says it,” Santini said. “We are ture mass-transit extensions, will the Puerto Rico Coliseum, not to will be coming to a station near you undertaking the necessary fi nancial provide San Juan the necessary in- mention the city’s vast hotel and sooner than you might think. steps so that we can contribute more frastructure to really enter the league tourism districts and Old San Juan, Financial and permitting hurdles if things get tight. of world-class cities, like Seattle, much more viable, Santini told are no obstacles, and the construc- “If the federales get real technical, New York City or Chicago, able CARIBBEAN BUSINESS. And tion project is less complex, costly I will build it myself,” the mayor to attract thousands more visitors it fi ts in with central government and time-consuming than most peo- said. “Find a municipality that can each year, and able to host world- plans to emphasize professional ple think, Santini told CARIBBEAN tell you that.” class events and professional sports Continued on next page 50 CARIBBEAN BUSINESS THURSDAY, NOVEMBER 18, 2010 FRONT PAGE 23 CARIBBEAN BUSINESS THURSDAY, NOVEMBER 18, 2010 Continued from previous page services, trade & exports and tour- ism in the island’s future economic Does P.R. need 100% development. Moreover, it will be the driver to fi nally get underway a decades-long, container inspection at its ports? $3 billion dream to remake the entire Isleta de San Juan and the neglect- ed Puerta de Tierra neighborhood connecting Old San Juan with the BY JAIME SANTIAGO Although everyone unanimously [email protected] Condado tourism district into a vi- agreed that any effort to curtail the brant waterfront sector with coastal importation of illicit drug and arms is parks and promenades, public the- gainst heavy odds and despite welcome, many concerns were raised aters and attractions, and new hotels, Aindustry critics, the Puerto Rico about the intention, effectiveness and retail and housing space. Ports Authority (Ports) is moving full need for 100% container inspection. The train line will run from the speed ahead with the implementation Many in the maritime industry feared existing Urban Train Station in Economic Development & of 100% container inspections at is- the implementation of this initiative San Juan Mayor the Sacred Heart area of Santurce Commerce Secretary San Juan Deputy Mayor land ports. Once completed, the new would disrupt their day-to-day Jorge Santini to Old San Juan. It will run along José Ramón Pérez-Riera Lourdes Rovira inspection program will affect every operations by slowing the dispatch Fernández Juncos Avenue through single incoming container not previ- of full containers when vessels Santurce and Miramar, loop around ously scanned by federal authorities, discharge cargo at their facilities. the Puerto Rico Convention Center medical care to high fi nance to legal initiatives and the pursuit of major group holds regularly scheduled pro- a CARIBBEAN BUSINESS inves- The fi rst scanning machine is due to District, and then run along an ex- expertise.
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