#infrastructure

Colombia`s infrastructure; one of Latin America`s worst

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Colombia’s infrastructure is one of the worst in Latin America, according to the World Economic Forum.

Of the top twelve economies in the region, Colombia has the tenth poorest provision of vital infrastructure; this, despite the promise by President Juan Manuel Santos to make the issue a priority of his administration.

In Santos`first year in office he created the National Infrastructure Agency (ANI) to push through the works identified as catalysts for economic growth.

Last week the president defended his track-record:

“In three years we have invested 22 billion peso ($11.7 million) in infrastructure development. That shows the magnitude of the efforts that we have made,” insisted Santos.

Despite slow progress, the ANI last Wednesday received nine bids as part of the “Fourth Generation” (4G) investment programme.

4G promises much. It is Colombia’s largest ever public investment project, designed to “improve connectivity between the principle centres of production and exportation to make Colombia a more competitive country and overcome the historical drag in transport infrastructure”.

According to the ANI, the project will provide an estimated investment of 44 billion peso ($23.2 million) under a public – private partnership scheme:

“With this initiative, the length of roads throughout the country is expected to nearly double, from 6,000 km to 11,000 km in the next six years.”

Undoubtedly good news if these promises are delivered. Few disagree that the current lack of infrastructure in Colombia is a major threat to the country’s economic competitiveness, domestically as well as internationally.

Colombia needs better roads, railroads, ports and airports. Cities are poorly connected to both internal and external markets, largely because of the extreme topography of the country.

Cutting transport costs is crucial to the country’s manufacturers, especially the coffee farmers, who continue to struggle from significant production costs. Crucially, it is key to overcoming the isolation at the root of the country’s socio-economic inequalities.

According to financial analyst James McKeigue, the 4G investment project should boost the country’s GDP by 1% per year, with a further 0.5% coming from a multiplier effect. The planned works will create approximately 200,000 direct jobs across Colombia, with a further 250,000 indirect ones. Importantly, many of these will be created in the remote areas where jobs are most needed.

But infrastructure improvements will bring security improvements as well as economic benefits.

The Colombian government has never been able successfully to control all of her territory. The majority of the population lives in the country’s largest three cities, Bogota, Medellin and Cali.

Outside of these major areas, a combination of jungles and mountain plains remain largely uninhabited, with limited infrastructure, resulting in a weak state presence in and around surrounding regions.

The resulting economic inequality throughout rural Colombia is severe, in part explaining the conditions which helped spawn criminal organisations known as BACRIM, and guerrilla groups, such as the FARC and ELN.

These groups fight for control of lucrative resources such as oil, gold, marijuana and coca.

Without significant infrastructure development throughout the regions where the conflict rages, the government cannot begin to solve the underlying problems of inequality and lack of development.

Indeed, any peace accord with FARC guerrillas would be vulnerable as illegal armed groups will seek to fill the vacuum left by the rebels in areas lacking state presence.

Photo, Colombia Noticias

Colombia´s infrastructure needs

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Colombia´s road infrastructure in both urban and rural settings makes for difficult transportation and is one of the reasons, as highlighted by the World Bank, for the country’s lack of economic competitiveness. With mostly one lane intercity highways, it often means that accidents or potholes cause long delays and increased costs for delivery; add to this the wear and tear of the vehicles and the movement of goods become less and less economically efficient.

Attempts to rectify this most fundamental of requirements for a modern, functioning country are of course on-going, and progress is being made, but all the work and improvements have come with their own set of challenges causing knock on delays and bottlenecks on already congested roads.

Nevertheless, in ushering in the new year, President Santos announced approximately $40 billion COP of spending on highway infrastructure, which he said would start 30 different projects throughout the country, all designed to complete the famous ‘la Ruta del Sol’.

This ambitious goal and the significant investment attached to it hope to increase employment opportunities and answer the World Bank’s concerns about the stagnating effect of poor infrastructure on the country’s economic development. The flip side, however, is that as the nation embarks on these major highway projects, it is inevitable that long-term negative effects on traffic flow and environmental impact will be felt.

One current example of this is the transvial between Calarcá (Quindío) y Cajamarca (Tolima), which requires building tunnels through the mountains at a length of 8.5 kilometers – it began in 2005, and is yet to be completed. This project, initially expected for September 2013, has faced several setbacks. It has even been suspended a four times, due to unauthorized changes in the blueprints, water contamination in region, and other irregularities. What´s worse, the Instituto Nacional de Vías (Invías) has failed to contract out the electromechanical work, which could mean we´re at least a year a way from seeing the light at the end of these tunnels.

President Santos’ vision of “connecting [the country] and reducing travel time, employment opportunities, road responsibility and security, improvement in the competitiveness of the production sector, and an increase in tourism as one of the main areas of regional development” resonates with the majority of the population.

Though in pursuing these goals, proper and transparent contracting are paramount if such work is to be carried out efficiently and with minimal environmental damage. But Colombia´s recent history is strewn with irregular, badly or corruptly managed contracting. Will Santos´plan work to avoid delays and harm to those living in the regions were the infrastructure is to be laid down? Time will tell.