general news 217
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.
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.
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.”
Antioquia’s development agency (Instituto para el Desarrollo de Antioquia, IDEA) announced December 13 that it’s extending a COP$132.5 billion (US$44 million) credit for the 157-kilometers-long “Vias del Nus” fourth-generation (4G) highway project in northern Antioquia.
The credit will help support financing, design, environmental studies, purchase of adjacent properties, construction, rehabilitation and operations along the new route, which will pass through the municipalities of Donmatías, Cisneros, San Roque and Maceo.
The new route will connect Medellin and central Antioquia northward to other major highways including “Magdalena 2” and the Northeast Trunk routes, as well as smoothing connections to southern Colombia, according to IDEA.
Project director Ricardo López Lombana added that “this is the first time that an institution such as IDEA – which isn’t a comercial bank – has entered into competition with national and international banks . . . marking an important moment for financing [infrastructure] projects in our country.”
The project – estimated to cost COP$1.5 trillion (US$498 million) and due for completion in 2021-- also includes construction of two, 4.1-kilometers-long parallel tunnels through the “Quiebra” mountain pass.
That pass is the principal obstacle linking Medellin to northeast Colombia. The existing “Quiebra” tunnel – far too small for highway vehicles -- was built for narrow-gauge railroads that no longer operate commercially.
The first phase of construction involves rehabilitation of 35.6 kilometers of highway between Cisneros and Alto Dolores. Then -- over the next four years -- 24.3 kilometers of four-lane, divided highway between Pradera and Porcesito will be built.
By 2021, the project will form part of 97.5 kilometers of four-lane divided highway including the section between the Medellin suburbs of Bello and Hatillo, according to Colombia’s national infrastructure agency (see Medellin Herald on March 09, 2017).
The “Vías del Nus” concessionaires include Mincivil S.A. (51.85%), Construcciones El Cóndor S.A. (22.22%), SP Explanaciones S.A.S. (21.10%), EDL S.A.S. (3.72%) and Latinoamericana de Construcciones S.A. (1.11%), according to IDEA.
Colombia’s national planning agency -- Departamento Nacional de Planeacion (DNP) -- on December 5 announced that the city of Medellin ranks best among Colombia’s 13 biggest cities for government planning and execution.
While Medellín took the top spot in the ranking of Colombia’s biggest cities, Bogotá came in second, followed by Barranquilla, Cali, Pereira, Manizales, Pasto, Ibague, Cartagena, Bucaramanga, Villavicencio, Monteria and Cucuta (see chart, above).
Three of the top-five mid-sized cities in the DNP study also are in Antioquia: Rionegro, Envigado and La Estrella, along with Girardot and Mosquera (the latter two both in Cundinamarca).
“The report highlights those municipalities that, starting from similar initial capacities, achieve good management and better development results -- that is, increasing the quality of life of the population is the ultimate goal of public management at the local level,” according to DNP.
“After 10 years of measuring ‘Integral Performance,’ the DNP has updated this indicator and launches the ‘New Municipal Performance’ measurement, an index that evaluates the new challenges of local administrations and for the first time measures results-oriented management.”
“This new measurement seeks to be a useful instrument for the design of policies aimed at strengthening the capacities of territorial entities, in such a way that results-oriented investment is encouraged and we achieve the closing of gaps at the territorial level,” added DNP acting director Juan Felipe Quintero Villa.
The ranking system grouped “homogeneous” municipalities, “taking into account the existing differences in their capacity levels with the resources they have, as well as their level of rurality,” according to DNP.
The agency measured capacities of 1,101 municipalities, classified into six groups: Large cities (13 main cities); Group 1 (high level of capabilities); Group 2 (medium high); Group 3 (middle level); Group 4 (medium low) and Group 5 (low level).
“The measurement takes into account variables such as the effort of the municipalities to generate their own resources, quality in the execution of resources by different sources, conditions of open government and transparency, as well as the use of territorial ordering instruments in the collection,” according to DNP.
The study also analyzed city planning and management of education, health, access to public services, security and citizen coexistence.
Mobilization of resources and land management instruments “are the main management challenges of the municipalities,” according to the agency.
City managers could improve their rankings via updating of real-estate cadastre and land use planning, “as well as using other instruments such as surplus value, urban delineation and valorization,” said Quintero Villa.
“At the national level, only 4% of the municipalities of the country make use of three or four land management instruments to increase [property tax] collection, while almost 96% of the country uses two or less,” according to DNP.
Meanwhile, “big gaps are seen in education and public services. While on average the net [public education] coverage of the 13 main cities is 50%, the average coverage in the municipalities of ‘Group 5’ is 28%. Investments in educational infrastructure and teacher training are essential,” according to DNP.
For the biggest cities, the bigger challenge is “security and coexistence," DNP added.
New York-based Institute for Robotic Process Automation and Artificial Intelligence (IRPA-AI) announced November 29 that Medellin’s “Ruta N” information-technology development center inked a deal whereby IRPA-AI will help launch a “Digital Americas Pipeline Initiative” (DAPI).
“The initiative will provide companies with direct access to trained, experienced, and certified robotics process automation [RPA] and artificial intelligence [AI] professionals on-demand and at-scale,” according to IRPA-AI.
The partners expect that the new deal will create “thousands of RPA and AI jobs in Medellín,” according to the Institute.
“DAPI will leverage IRPA-AI's membership network, trusted relationships, training and certification capabilities, as well as the cost-effective technology talent pool in Medellín to provide North and South American enterprises, service providers, startups and advisory firms with trained, experienced and certified RPA and AI professionals,” according to the Institute.
The deal will include IRPA-AI apprenticeships, training and certification programs, business networks “to promote market engagement and sales for new AI/machine learning, RPA, and digital powered services,” according to the Institute.
DAPI also aims to trigger more research and development in automation and AI “to enable analytics, Internet of Things [IoT] and cloud computing,” while generating more economic growth and jobs in Medellin.
“The greatest challenge in the rapidly expanding RPA and AI space is not technology, it’s talent, and proximity to that talent,” said Frank Casale, founder of IRPA-AI.
“This is the first initiative of its kind to address this challenge, while creating scalable and affordable talent from a trusted, time-zone-friendly source. DAPI has full support from the Colombian government, businesses and academic research communities,” he added.
“DAPI is a direct and bi-directional conduit, connecting RPA and AI technology, talent, intellectual property and funding between North and South America,” said Alejandro Franco, executive director of Ruta N.
“It provides us with economic fuel, creating highly sought-after employment opportunities that will positively and significantly impact our city's future business development. Frank Casale’s vision, and IRPA-AI’s expansive global network and technology expertise will help anchor Medellín as the RPA and AI hub of Latin America,” Franco added.
Companies around the world “have woken-up to the transformational effect that RPA and AI bring to their businesses [but] are hard-pressed to find the right digital talent from a relatively small pool,” according to the institute.
“A global study from IDT found that 80% of businesses cite digital transformation as a priority, but only 17% of respondents had enough employees with the right skills to embark on a smooth digital transformation.
“The serious shortage of experienced and qualified people who can meet the demand has U.S. and Canadian corporations looking outside traditional sources for geographically close and cost-effective talent,” the Institute added.
A new study (see: https://idc.compite.com.co/) by the national private-sector competitiveness council (Consejo Privado de Competitividad, CPC) and Universidad del Rosario shows that Antioquia continues to rank near the top in competitiveness among all of Colombia's 32 departments (states).
The departmental competitiveness index (Indice Departamental de Competitividad, IDC) -- now in its fifth edition -- shows that Antioquia ranks second only to Bogota in over-all competitiveness, with Santander third, Caldas fourth, Risaralda fifth, Valle del Cauca sixth, Cundinamarca seventh, Atlantico eighth, Boyaca ninth and Bolivar in 10th place.
Antioquia’s population of 6.6 million represents 13.9% of gross national product (PIB in Spanish intials), equivalent to COP$119.9 trillion (US$40 billion), while per-capita PIB is COP$18.3 million (US$6,135) and output per worker is COP$40 million (US$13,410), the study shows.
Besides coming-in second over-all in the national competitiveness ranking, Antioquia came-in third on institutional quality, fourth in infrastructure, second in market size, third in health-care, third in efficiency, third in higher education, second in market efficiency, second in innovation/sophistication and second in empresarial dynamism, the study shows.
However, Antioquia came-in at a relatively poor 18th in basic (primary and secondary) public schooling – down sharply from the 2013 survey -- and only 19th in environmental sustainability, also down from 2013, the study shows.
The study analyzed 94 variables, grouped into three main categories: basic conditions, efficiency and innovation/sophistication.
Among the variables analyzed, Antioquia came in at 15th place in unemployment rate (9.62%), second in terms of worker contributions to health and pension funds (at 46.7%), second in terms of secondary-school English proficiency (34.12%), 18th in percent of total area in protected parks (10.7%), eighth in terms of total area covered by forests (34.6%), and sixth in per-capita financial investment in basic public education.
Antioquia came in at 15th place in terms of freight costs (transfers from cities to ocean ports), at US$68.84 per tonne of freight. Antioquia’s decades-long backlog and delays in building divided highways through its mountainous terrain explain the relatively poor freight-cost competitiveness, compared to cities nearer the Atlantic and Pacific ports.
Notably, despite claims by certain politicians, Antioquia is among the best departments in all Colombia in terms of long-term contract electricity costs (mainly for industry), at COP$290 per kiloWatt-hour, the study shows.
In the report, Jaime Echeverri, vice-president of planning and development for the Medellin Chamber of Commerce for Antioquia, pointed to greater economic diversification and greater focus on value-added production in Antioquia over the past 10 years.
This diversification "has been supported by the cluster strategy, in which public-private cooperation and the commitment of companies have been important assets,” according to Echeverri.
“This strategy prioritized six clusters: electric power; business tourism, fairs and conventions; building; medicine and odontology services; technology, information and communications; and textile clothing, design and fashion.
“The cluster model has focused on generating environmental conditions that favor competitiveness and productivity, around aspects such as innovation, science and technology, education, institutionality, human resources, as well as strengthening of the business base for taking advantage of business opportunities in high-potential segments.
“In a recent context, and with emphasis on the subregions of the department, the model of productive chains is being developed, in which business initiatives around coffee, cocoa and dairy products have been prioritized, and progress is being made in citrus and rubber, among others.
“In terms of diversification of the export basket, and of export destination countries, the region now has the ‘Grupo Antioquia Exporta Más’ [Antioquia Exports More] initiative, which integrates the entities related to the internationalization of companies -- and this is supported by the Ministry of Commerce, Industry and Tourism.
“This initiative seeks to integrate efforts and resources, and generate synergies in face of the challenges faced by the export base of the region, by advancing in an orderly manner on different fronts: country cost, market opening and expansion, design and development of products and services , business strengthening, human talent, financing, promotion of export culture and development of strategic capabilities,” Echeverri concluded.
Medellin Mayor Federico Gutiérrez announced November 20 that the city’s enormously popular “Metro” public-transport network will add yet another zero-emissions aerial-tram “Metrocable” system -- helping to stem air pollution mainly caused by obsolete diesel and gasoline vehicles.
The 2.8-kilometers-long, COP$298 billion (US$99 million) “El Picacho” aerial tram is due to start construction in 2018 and then start-up in late 2019 or 2020. France-based Poma -- which has built Medellin's other aerial tram systems -- won the competitive bidding for the project.
While most of the residents that must abandon nearly 400 homes to make way for construction of the new "Picacho" route have agreed to move, the city still hasn’t gotten 100% approvals, which could delay completion.
The “Picacho” line would serve about 160,000 people living in the working-class Northwest neighborhoods of Castilla and Doce de Octubre.
That line will join Metro’s existing electric-powered Metro rail system, an expanding electric-powered “Tranvia” road-tram network, the “Encicla” zero-emissions bicycle system, and the low-emissions, natural-gas-fueled “Metroplus” bus rapid transit (BRT) systems. The “Metroplus” BRT system also could be converted to zero-emissions electric power over the coming decade following initial tests underway on Metro’s first electric-powered bus.
Medellin gets virtually all its electric power from zero-emissions hydroelectric dams, with Medellin-based power utility EPM expanding capacity with the 2.4-gigawatt “Hidroituango” hydropower plant partially starting-up in late 2018.
Exito, EPM Expand EV Recharging
Meanwhile, Medellin-based multinational supermarket giant Exito announced November 21 that it’s opening the first two of a series of public electric vehicle (EV) recharging stations in Medellin – initially at the Éxito Poblado supermarket and at the “Viva” mall in the Laureles neighborhood.
While only a handful of EVs exist in Medellin to-date, local car manufacturer Renault (and its joint-venture partner Nissan) is one of the world’s leading makers of mass-market EVs -- mainly in Europe, so far. However, Renault has been boosting promotional sales of its “Twizy” mini-EV here in Medellin and could expand to more EV models in future.
“In the next few months, we will add two more [EV] charging stations at Éxito Envigado and Viva Palmas” in metro Medellin, added Claudia Echavarría Uribe, corporate affairs director at Grupo Éxito.
On the same day, EPM announced that it will have 20 EV recharging stations installed in metro Medellin by end-December 2017. That total includes the two new recharge stations involving Exito as well as a just-opened recharge station at the El Tesoro mall.
Additional EV recharge stations coming over the next month include Santafé mall, Unicentro mall, Los Molinos mall, Florida Parque Comercial, Mayorca mall (Sabaneta), Puerta del Norte (Bello); Viva Envigado, Plaza Mayor, Primer Parque de Laureles, Centro de Negocios Milla de Oro and Mall Río 10, according to EPM.
Antioquia Governor Luis Perez announced November 15 the signing of a memo of understanding that would clear the way for starting construction in March 2018 of the US$600 million “Puerto Antioquia” ocean-freight port near Turbo.
Signing the memo were the Antioquia departmental government and its Instituto de Desarollo de Antioquia (IDEA) investment agency, France-based CMA Terminals, Colombia port operator/investor Pio SAS, banana export trade association Augura, the Sociedad Puerto Antioquia and the municipality of Turbo, Antioquia.
IDEA and the Antioquia department will put-up 5% of the funds for the project, due for start-up in second-half 2020, according to Governor Perez.
The new port not only would expand capacity for Colombia’s banana and coffee exports, but also will add new capacity for general containerized freight, bulk products and automobiles, at an estimated 6 million tonnes per year initial capacity.
At the signing ceremony, Colombia’s Transport Minister German Cardona Gutiérrez pointed-out that the national government’s COP$13 trillion (US$4.3 billion) current investment in “fourth generation” (4G) highways including the “Mar 1” and “Mar 2” highways and the “Toyo" tunnel -- linking Medellin to Atlantic ports (including the future Puerto Antioquia) -- are crucial to the economic future of Antioquia.
The deadline for financial close on the project is January 31, 2018, according to the governor.
