Former Colombian president promotes regional energy interconnection circuit, PPPs

Written by  //  June 3, 2011  //  General Biz News  //  No comments

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Former President of Colombia, Álvaro Uribe

One of the great challenges for Latin American and Caribbean countries is solving their energetic needs now and in the future. While turning to alternate energy sources is a virtual requirement to address demand, Álvaro Uribe, former President of Colombia, believes building an “interconnection circuit” in the region is another feasible way to go.

“The newer generations should think about the idea of having an interconnected circuit via submarine cables that starts in South America, connects Puerto Rico, the Dominican Republic, eventually Cuba, Haiti, Jamaica and loops back to Central America,” said Uribe, during a one-day visit to the island Thursday, to speak during the opening day of the Puerto Rico Manufacturers Association’s annual convention.

Colombia and Panama, he said, have already struck interconnection agreements to solve what he said, “is one of the great challenges” countries are facing moving forward.

“It’s pretty certain that no country is going to look at nuclear energy and fossil fuels will eventually run out. So our countries have every possibility of developing projects and connecting,” said Uribe, who earlier in the day had met with Gov. Luis Fortuño during a brief visit to La Fortaleza.

Colombia, he said, has the ability to expand its access to biofuels without affecting its food safety. Water and wind are other energy sources the South American country is also maximizing, Uribe said.

“We average about 70 percent in the use of hydroelectricity, which we combine with carbon and gas sources to produce our energy,” he noted.

Energy integration among countries is an idea that needs to be discussed in a timely manner, “and relay that to the new generations, who need to commit to developing it,” he said.

Rebuilding Colombia’s image
During his eight-year tenure that ended last year, Uribe carried a high approval rating due mostly to his fight against illegal armed groups in Colombia and the measures his administration took to stimulate growth of the country’s economy and reduce unemployment.

He said the goal was to re-establish the international community’s trust in Colombia by launching a three-pronged strategy based on safety, investment and social policies.

Along the way, Uribe said the country was able to make a comeback in certain key economic areas, such as tourism and health.

PPPs support economic growth
Colombia, like Puerto Rico, believes in the idea of establishing Public-Private Partnerships to share the responsibility of providing services, including in the aforementioned sectors.

Gov. Fortuño meets with Uribe at La Fortaleza Thursday.

“Colombia is a country that is pretty advanced in the topic of PPPs, it has granted many concessions that feed from revenue stemming from the operation itself, as well as fiscal allocations,” he said.

In the area of health, the Colombian government regulates service providers, whether public, private or under mixed management. Employees choose the provider, which is required to direct 30 percent of its business to its own hospitals and the remaining 70 percent to independent healthcare facilities.

Because 47 million Colombians are covered by insurance, there are growth opportunities for jurisdictions like Puerto Rico — a heavy hitter in pharmaceutical and medical device manufacturing — to offer its services to that country.

“That great leap that Puerto Rico took in the production of medicines and equipment has attracted our attention greatly,” Uribe said. “The health sector is developing significantly in Colombia, and I believe Puerto Rico could integrate itself into that process, when it comes to providing medicines, equipment and other devices such as prostheses.”

Puerto Rican businesses, he said, could also benefit from the seven free trade zones established in the area of tourism, currently under development.

Furthermore, he said doing business in Colombia has “improved significantly. The number of days it takes to establish a business in Colombia has been reduced and there there is more confidence today in the reliability of contracts.”

“Colombia is a country that deeply believes in treating international capital in the same way it treats domestic capital, to be able to solve its major social issues,”

Foreign investments in Colombia increased by more than 500 percent to $13 billion last year, from the $2.1 billion in 2002, he noted. In turn, Colombian companies invested $6 billion in operations beyond its borders, including the United States, Dominican Republic, Brazil, Peru and Central America.

In Puerto Rico, establishing PPPs has been one of the focal points of the Fortuño administration, which is seeking private operators for major roads and highways, schools and the Luis Muñoz Marín International Airport. Earlier this week, the PPP Authority announced the process of selecting the consortium that will operate PR-52 and PR-5 is nearing completion, with just two groups vying for the lucrative project.

Opportunities in tourism
One area where the Colombian government has placed special emphasis on in recent years is developing its tourism industry, especially along potential cruise ship Caribbean destinations, such as Cartagena, Barranquilla and Santa Marta.

A sunset in the coastal city of Cartagena, Colombia. (Credit: Wikipedia Commons)

“During my tenure, we concentrated on developing that sector, in cooperation with the private sector, to turn the country into a world-class player,” he said.

The strategy called for playing the safety card to create trust among would-be visitors and giving tourism companies significant tax benefits, up to 30 years in exemptions, in exchange for establishing operations there.

“In recent years, Colombia’s investment rate went from 12 percent to 28 percent, which has begun to move visitor activity. Colombia’s recuperation in the tourism sector is determined by the pro-safety and promotion policies that we implemented,” said Uribe.

Colombia is competing head-on with Puerto Rico for cruise ship passenger traffic — the country received 600,000 passengers and crew last year, representing about 24 percent of the total 2.5 million tourists that went there to visit.

Meanwhile, he said that Puerto Rico and Colombia need to re-establish direct airline service, something that is fundamental and will be up to the governments to achieve.

“I didn’t have a chance to talk about that with Fortuño while I was president, but the new government is open to expanding air transportation, especially now that there are fewer security restrictions in place,” said Uribe.

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