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Medellín Metro News 106

Published in Medellín Metro News Written by March 16 2018 0

The annual “Medellin Como Vamos” (“how are we doing?”) citizen survey released March 15 finds that while most Medellin residents remain relatively optimistic, Colombia’s economic slowdown in 2017 pushed the favorability index downward.

The face-to-face survey in November 2017 of 1,500 residents across all zones and all socio-economic strata found that in general -- compared to the 2016 survey -- Medellin residents trimmed their relative satisfaction with the city as a place to live, while individual satisfaction with the quality of life “fell appreciably compared to 2016 and compared to the historical average of each one of the ratings,” according to the survey report.

With employment and health being the top-two concerns of Medellin citizens, “it is telling that in [2017] the national economy showed signs of stagnation, with a consolidated growth of 1.8%, the lowest registered since 2010, and very similar to that registered in 2009, when the economy grew by 1.7%,” the report noted.

“This was reflected in fewer job opportunities for all those who sought employment in the city and the metropolitan region, with an unemployment rate that remained above 10%. Thus, while 27,000 new jobs were created, the population that was looking for work also grew, resulting in 7,000 more people unemployed.

“Regarding health, the results of the survey show that, in a context of greater coverage of the health service and greater reported access, there are still pending challenges to be solved, specifically in terms of quality,” the survey added.

Availability of prompt outpatient service declined year-on-year, “with two out of 10 Medellin residents having to wait more than 30 days,” the survey found. “Although satisfaction with the health service remained stable, comparatively [the ranking] remains one of the lowest among the goods and services investigated by the survey.”

For Medellin’s poorest sectors (“estrato 1” and “estrato 2”), the overwhelming majority of them are in the government-subsidized sector affiliated to the Savia Salud “EPS” (health maintenance organization), in which the city of Medellin owns 36.65%, the departmental Antioquia government another 36.65%, and worker-benefits cooperative insurer Comfama owning the remaining 26.7%.

Problem: Savia Salud is running more than US$250 million in the red, as spending far out-runs income -- and politicians warn of potential financial collapse. Such a collapse would leave some 1.7 million of the poorest residents in Antiqouia --the majority of which live in and around Medellin – without health insurance.

Among the 13 measurements in the survey: “subjective well-being,” in which those surveyed indicated average satisifaction of 6.99 points on a scale of 0 to 10, where 0 is the worst possible and 10 the best possible.

As for “poverty and inequality,” the percentage of inhabitants of Medellín considering themselves as “poor” fell slightly in the 2017 survey, at 19%.

As for “citizen security,” the percentage of people in Medellín who considered the city to be safe “decreased by four percentage points [in 2017] compared to 2016,” the survey found.

As for “environment,” air-pollution concerns grew, as “air is the environmental aspect of Medellín with which fewer citizens are satisfied,” according to the report. Only 15% of citizens surveyed said they were “satisified” with air quality – by far the worst result among all survey questions, the report noted.

As for “public management,” the survey found that “employment, health and housing are the agenda items that citizens propose” for the Medellin Mayor to put as highest priorities.

As for “economic situation, food and employment,” only 38% of Medellin households said their economic situation improved in 2017, wheareas in 2016, 51% cited improvements.

As for “education,” 79% of the surveyed homes in Medellín indicated they were “satisfied with the education received by children and young people between 5 and 17 years old.”

As for “housing and public services,” Medellin citizens “remained highly satisfied with their housing and their neighborhood. The public natural-gas home service maintained the highest satisfaction while internet [service] rated the lowest satisfaction," according to the report.

As for “mobility and public space,” 35% of those surveyed “affirmed that their trips took longer in 2017 than in 2016,” because of continuing growth of the motor-vehicle population -- without a corresponding growth in road infrastructure or a corresponding increase in high-capacity, high-quality public-transit options.

As for “citizen responsibility,” the survey found that “ethnic minorities, reintegrated people [those fleeing the countryside to relocate in the city] and people with different sexual orientations were the groups about whom there is less respect in Medellín.”

The annual “como vamos” surveys are sponsored by Fundación Proantioquia, the Medellin and Bogota Chambers of Commerce, Eafit University, Comfama, daily newspapers El Colombiano and El Tiempo, and Fundación Corona.


Published in Medellín Metro News Written by March 14 2018 0

Colombia’s Agencia Nacional de Infraestructura (ANI) infrastructure-project agency president Dimitri Zaninovich on March 13 publicly hailed what he termed as multi-billion-dollar investments in “fourth generation” (4G) highways connecting Medellin and Antioquia to key ocean freight ports.

In a speech following inspection of Colombia’s first-ever unified air-freight inspection zone at Medellin’s Jose Maria Cordova (JMC) international airport – now 56% complete and due for start-up by December 2018 -- Zaninovich cited “4G” investments that would top COP$23 trillion [US$8 billion], benefitting Medellín and Antioquia.

Zaninovich claimed that the projects are moving ahead promptly. But he failed to highlight that the crucial “Pacifico 1” divided highway -- linking the southern Medellin suburb of Caldas to Colombia’s main Pacific port at Buenaventura via the under-construction “Pacifico 2” and “Pacifico 3” highways -- has been stalled for years, with little explanation on the hang-up.

“Pacífico 2 and Pacifico 3 have advanced by 33% and 40% respectively,” he said. “We can’t lose forward progress that Colombia has achieved until now, because we’re moving ahead -- and great infrastructure projects already are a reality,” he said.

“Public-private association” (APP in Spanish initials) contracts involved in highway, ocean-port and airport projects are unprecedented in Antioquia, he added. These 4G highway projects will cut freight transport times by at least 30%, he added.

Major cities in Colombia (including Medellin) are severely penalized by expensive freight transport costs -- the result of Colombia’s decades-long delays in building high-speed, divided highways over-and-through the nation’s steep, mountainous terrain.

To overcome this problem, the national government is working with private-sector development consortiums on all the "4G" highway projects including Pacífico 1, 2 and 3; Mar 1 and Mar 2; Conexión Norte; Autopista al Río Magdalena 2; and the 100%-private initiatives “Vías del Nus” and the “Antioquia-Bolívar” highway links, he added.

What’s more, ANI is also working to push-forward the “Transversal de las Américas” highway linking Atlantic ports as well as the proposed “Vial del Oriente” highway connecting the “oriente” (east of Medellin) region to Llanogrande (next-to the JMC international airport).

Zaninovich added that ANI also favors development of two proposed ocean-freight ports near Turbo, Antioquia: “Puerto Antioquia” and “Puerto de Pisisi.”

Published in Medellín Metro News Written by February 27 2018 0

Japan’s Ambassador to Colombia Keiichiro Morishita this month unveiled new offices in Medellin of the Japan Chamber of Commerce and Industry (CCI).

The decision to open new offices here came following an initiative by local investment promotion agency ACI (Agencia de Cooperación e Inversión de Medellín).

According to ACI, the new CCI office aims to boost foreign investment in Medellin, fortify commercial exchanges and promote educational and cultural initiatives.

CCI already has offices in Bogota -- for more than 30 years -- but now aims to expand its efforts in Medellin.

CCI affiliates are mainly Japanese companies operating in Colombia as well as Colombian empresarios with commercial aims in Japan, added CCI executive director Oscar Romero.

Initially, CCI will locate its offices in Medellin’s “Ruta N” high-tech landing space, but later will move to its own headquarters, according to ACI.

Published in Medellín Metro News Written by January 27 2018 0

The Medellin-based “Vias del Nus” (“Vinus”) highway construction concessionaire announced January 22 that it won crucial permits from Agencia Nacional de Licencias Ambientales (ANLA) to build twin tunnels through “La Quiebra,” the principal obstacle blocking cost- and time-efficient freight traffic between Medellin and the Rio Magdalena.

The “Quiebra” pass currently only has an obsolete, narrow-gauge railway tunnel as well as a steep, winding highway nearby that snarls freight traffic.

According to the Vinus partners, the environmental permits from ANLA enable start-up of construction of the Quiebra highway tunnels (each 4.1-kilometers in length) as well as 5.1 kilometers of four-lane divided highway between Porcesito and the “Portal del Tunel” in Santiago, all in northern Antioquia.

“The objective of the Vias del Nus concession, which is part of the ‘Autopistas para la Prosperidad,’ is to generate a road interconnection between the city of Medellin and the main [fourth-generation] highway concessions in the country, as well as linking commercial exchange centers such as the Caribbean Coast, Pacific Coast as well as the Rio Magadalena,” according to the Vinus partners.

“This concession will allow easier and cheaper transport of products destined for export, in addition to favoring the entry of products from other regions to the department of Antioquia.

“Additionally, significant time savings will be achieved by having a design speed of 80 kilometers per hour for the new divided-highway roads and for the specific section of Cisneros-Alto de Dolores to the existing Magdalena-2 highway junction.

“Part of the work to be done consists of rehabilitating existing road and building a third lane on the uphill side of highway between San Jose del Nus and Alto de Dolores in order to improve the characteristics of the road and allow a better speed of operation than today,” according to the partners.

In total, the “Vias del Nus” project includes 154.7 kilometers of new and rehabilitated highway that begins in the northern Medellin suburb of Pradera, joining the existing Hatovial highway concession.

“Within this concession is the functional unit between Bello and Pradera that is currently concessioned to Hatovial and that will become part of the project from May 2, 2021,” according to the partners.

“This concession provides for the operation of five toll stations; four already existing in the corridor -- Niquía, Trapiche, Cabildo (Trapiche control toll station), Pandequeso -- and Cisneros, which will be moved because of the new geometry of the highway when the Quiebra tunnels enter into operation.

“To avoid the [potential] diversion of cargo traffic through the northeast route, it is expected that the Agencia Nacional de Infraestructura (ANI) and the Minstry of Transport or the government of Antioquia will issue a restriction upon cargo carriers for categories V, VI and VII on the Porcesito-La Cortada-Yolombó-Yalí-Vegachí-El Tigre-Remedios route (Northeast Trunk),” the Vinus partners added.

The Vinus concession partnership includes Mincivil S.A. (51.8%); SP Ingenieros (22.2%), Construcciones El Cóndor (21.1%); EDL (3.7%) and Latinco (1.1%).

Published in Medellín Metro News Written by January 19 2018 0

Medellin-based multinational electric-power giant EPM announced January 19 the start-up of a 590 megawatt-hours/year (MWh/year) solar-voltaic power system for the “El Tesoro” shopping mall in the Poblado district.

The photovoltaic system will operate in parallel with conventional grid power (overwhelmingly hydroelectric-sourced), according to EPM.

It’s EPM’s first-ever such system installed and financed for commercial customers, under a 15-year contract deal, according to the company, whose sole owner is the municipality of Medellin.

According to EPM general manager Jorge Londoño de la Cuesta, the new system includes 1,568 solar panels, covering a roof area of 2,570 square meters and supplying power mainly to the common areas of the shopping center.

With the new system, “we expect to generate approximately 590 MWh annually, equivalent to the power consumption of approximately 341 homes,” de la Cuesta said.

El Tesoro general manager Adriana González Zapata added that the new system “will bring great benefits – economically, because it will substitute for about 24% of [grid power], and environmentally, as part of our commitment to reduce our carbón footprint.”

The solar-power system will have dispatch priority in power supply, with grid-power serving as backup.

EPM’s 40.9%-owned “Erco Energia” affiliate built and installed the system and will provide maintenance. EPM now can offer similar systems to commercial customers that have “ample” space for photovoltaic panels, the company added.

EPM will assume the up-front cost of the system as well as handle installation, operation and maintenance. The company will recoup its investment via long-term contracts at “stable” and “competitive” prices per kilowatt-hour -- paired with conventional grid energy supply to ensure constant, reliable power, according to EPM.

Companies employing such solar-power systems can now claim credits as socially responsible entrerprises (“Responsabilidad Social Empresarial,” RSE), and also can get real-time reports on solar power use, according to the company.

The solar-power system EPM is offering doesn’t employ battery storage, but rather is custom-designed for each customer’s power profile, according to the company.

For each 100 kilowatts of newly installed solar power capacity, a commercial company could claim an annual reduction of 28 tonnes of carbon dioxide (CO2) emissions, equivalent to the typical CO2 footprint of 81 homes, according to EPM.

Published in Medellín Metro News Written by January 18 2018 0

The latest study by Medellin-based XM – Colombia’s national power-grid operator and wholesale power-trading center – finds that demand for electric power in Antioquia slipped by 0.8% year-on-year during full-year 2017, while nationwide power demand actually rose 1.3%.

Nationwide power demand in 2017 totaled 66,893 gigawatt-hours, the study found.

Power demand growth in 2017 was relatively strong compared to 2016, when demand rose just 0.2% year-on-year, XM revealed in a report issued January 17.

Strongest power-demand-growth in 2017 occurred in the Atlantic Coast (up 3.8%) and in Guaviare (up 2.4%), XM found.

Nationwide power demand growth for the month of December 2017 rose 3.2% year-on-year, the study found. Residential and small-business power demand rose 4.1% year-on-year in December 2017, but industrial-commercial demand rose by just 1.1%, the study found.

Published in Medellín Metro News Written by December 21 2017 0


Medellin Mayor Federico Gutierrez and Antioquia Governor Luis Perez jointly announced December 18 that the 9.8-kilometers-long “Toyo” tunnel project has now won required environmental licenses, paving the way for construction start-up in January 2018.

The “Toyo” tunnel project – estimated to cost COP$1.83 trillion (US$617 million) in 2012 pesos -- would link the new “Mar 1” and “Mar 2” highway projects together, dramatically improving Medellin’s highway connections to current and future Atlantic freight ports.

Colombia’s environmental licensing agency (Autoridad Nacional de Licencias Ambientales, ANLA) had demanded several changes to the project prior to giving final approval, according to the joint press statement.

The Antioquia department is putting-up COP$780 billion (US$263 million), while the city of Medellin is adding COP$520 billion (US$175 million) and the “INVIAS” national highway agency adds another COP$530 billion (US$174 million) to the project.

The project also includes 18 smaller tunnels of 18 kilometers total, 30 bridges totaling 3 kilometers in length, and 16.9 kilometers of surface highway.

INVIAS has already contracted to the Antioquia government the first section (“Tramo I”) of the project, expected to last six years and cost COP$1.045 trillion (US$352 million) in 2015 pesos. This section includes road works between Santa Fe de Antioquia and Cañasgordas, passing underneath the municipality of Giraldo.

INVIAS aims to award the second section (“Tramo II”) in 2018, according to the joint press statement.

Mayor Gutiérrez added that the project not only will make Medellin industries more competitive, but also will contribute to development of the long-neglected Uraba región of Antioquia.

Environmental licenses include special protective measures for highway sections between Cañasgordas and Buenos Aires; between Pinguro and Las Habas; between Buenos Aires and El Madero; and between Manglar and Giraldo, according to the agency.

Licenses also include provisions for 17 other bridges not authorized earlier; permits for air pollutant emissions; and permits for proper disposal of extracted rocks and dirt.

Published in Medellín Metro News Written by December 21 2017 0

In a December 21 press conference at Mayor Federico Gutierrez's office, Medellin’s top business-development agency leaders revealed a host of initiatives that promise to bring millions of dollars in new investments and re-investments starting in 2018 and subsequent years.

One example: At least three of the world’s top hotel chains are mulling a proposal to build a 180-room executive hotel adjacent to Medellin’s Plaza Mayor convention center, as Agencia de Cooperación e Inversión (ACI) director Sergio Escobar revealed in a post-presentation interview with Medellín Herald.

If a deal is struck in 2018, then it’s possible that construction would start soon afterward -- and the hotel could open for business as soon as 2020, he added.

In his presentation here, Escobar revealed that foreign direct investment (FDI) in Medellin soared to US$372.7 million this year, up from US$211.6 million in 2016.

Among the biggest 2017 investors in Medellin include airport concessionaire Airplan SA (US$34 million), Hotel Marriott/Grupo Roble (US$40 million), and French multinational Almacentes Exito (US$200 million), he said.

Source countries for FDI in Medellin this year include USA (four companies), France (three companies), Canada (two), and one each from Argentina, Brazil, Denmark (a brand-new entrant), El Salvador, Holland, Panama, the UK, Switzerland and Uruguay, he explained.

Tourism Growing

In a separate presentation here, Maria Fernanda Galeano -- Medellin’s Secretary of Economic Development -- revealed that as of December 10 this year, Medellin has hosted 254,541 foreign visitors, up 4.21% year-on-year, with the USA (49%), Panama (18%) and Mexico (15%) accounting for the most visitors. Over the past five years, foreign visitors to Medellin have more than doubled -- and business tourism is especially emphasized, as such tourists spend far more on average than typical pleasure tourists, she added.

So far this year, Medellin has captured 92 major events, up from only 15 events 10 years ago, Medellin Convention & Visitors Bureau director Ana Maria Gallego added here.

Besides well-known annual events for the textile, fashion, electric power and transport industries, Medellin also this year nabbed the prestigious “Smart City Business” convention, Gallego explained.

In 2018, Medellin will host the pioneering “IPBES” biodiversity conference; the South American Hotel & Tourism Investment Conference; and the 74th annual Sociedad Interamericana de Prensa (SIP) conference of journalists, she said.

Plaza Mayor Strengthens Events, Finance

Meanwhile, Plaza Mayor director Juan Santiago Escobar cited in his presentation a drastically improved financial situation for the convention center (which posted several yearly losses prior to 2016, blamed on prior-administration mismanagement) as well as continuing improvements and expansions of facilities.

Through November 2017, Plaza Mayor realized sales growth of 30% year-on-year, while 2017 earnings before interest, taxes, depreciation and amortization rose to more-than COP$3 billion (US$1 million), he said.

Total events at Plaza Mayor grew from 482 in 2016 to 496 in 2017, including big conventions such as ExpoAgrofuturo, World of Business Ideas (WOBI) and the “Feria de las 2 Ruedas” motorcycle show.

Total visitors to Plaza Mayor events so far this year hit 837,584 up 10% year-on-year, he said.

In 2018, major shows coming to Plaza Mayor include Colombiatex, Expofitness, Expoinmobiliaria, Congreso Nacional de Enfermeria, Feria de las Dos Ruedas, Exposolar, Colombiamoda, Expocamacol, Feria Internacional Minera, Congreso Colombiano de Pediatria, Congreso Panamericano de Transporte, Smart City Business Congress and the “INCUBATOUR” tourism conference, Escobar added.

Ruta N/Innovation District Advances

Meanwhile, Medellin’s “Innovation District” high-tech business-development center director Paulina Villa explained in her presentation that Medellin and its “Ruta N” tech center have attracted 49 new businesses this year, including the “Grupo Konekta” multinational software development factory.

In addition, global package-delivery giant UPS has recently added 200 high-tech back-office specialists at Ruta N, while another 108 high-tech companies are now exporting services from Medellin for the first time, Villa revealed.

Additionally, another 86 more companies are expected to join the “Innovation District” in 2018 – joining 204 companies from 30 countries already here, Villa said.

Published in Medellín Metro News Written by December 15 2017 0

Colombia’s national infrastructure agency (Agencia Nacional de Infraestructura, ANI) and the Financiera de Desarrollo Nacional (FDN) national financing organization jointly announced December 14 that a new deal ensures COP$1.47 trillion (US$490 million) financing for the “Ruta al Mar” highway project linking northern Antioquia to Atlantic coastal ports.

The new financing package is a first-of-its-kind for Colombian public-private infrastructure projects, involving a combination of bonds and other investors and featuring investment-grade rankings from Wall Street bond raters Fitch and Moody’s, according to ANI.

Medellin-based Construcciones El Cóndor is the highway project developer and builder.

Commenting on the deal, FDN director Clemente del Valle stated that the financing consortium includes local banks, the FDN, debt-finance specialist Ashmore CAF, and international financiers.

FDN will provide COP$400 billion (US$133 million) or 27.17% of the total loan funds, while local banks will put-up 19.02%. Ashmore CAF assumes 18.74% and another 35.46% comes from international capital markets via purchase of Colombia’s UVR bonds.

For the deal, U.S.-based Goldman Sachs organized a COP$520 billion (US$173 million) float of bonds carrying a 26-year term and a 6.75% coupon, according to ANI.

The “Ruta al Mar” Project – linking Antioquia, Cordoba, Sucre and Bolivar departments -- is part of a series of “fourth generation” (4G) highway projects around Colombia. The latest project also would smooth commerce between Valle del Cauca, the coffee regions and Atlantic ports.

The project will create bypasses around congested municipalities along the route, as well as connect to other major highways including the “Conexion Norte” and “Mar 2” highways, according to ANI.

In all, “Ruta al Mar” includes construction of 112 kilometers of new highway, rehabilitation and upgrades to another 226 kilometers of existing highway, and operations-and-maintenance of another 154 kilometers of existing highway, according to the agency.

FDN’s investors including Japan-based Sumitomo Mitsui, the U.S.-based International Finance Corporation (a division of the World Bank), and Latin America’s “CAF” multilateral investment bank.

Construcciones El Condor president Luz María Correa hailed the new financing deal, describing it as “a great milestone in financing of public-private [infrastructure] partnerships without government funds -- and this validates the strength of 4G concession contracts.”

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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