First phase of Cuba’s Mariel port update opens

mwhitefield@MiamiHerald.comJanuary 28, 2014 

Cuban President Raúl Castro and Brazilian President Dilma Rousseff snipped a ribbon to mark this week's opening of the first phase of the Port of Mariel renovation, a nearly $1 billion project that is largely financed by Brazil.

Better known in Miami as the departure point for the 1980 Mariel Boatlift, Mariel will become Cuba’s main foreign trade port and work in conjunction with the island’s new Mariel Special Development Zone, essentially a foreign trade zone that provides tax and customs breaks for enterprises within its 180 square miles.

For centuries Havana, 28 miles east of Mariel, has been the hub of international commerce in Cuba.

Castro called the Mariel renovation “a transcendental project for the national economy.”

The first phase of the port project includes a 2,290-foot long wharf that Granma, the Communist Party newspaper, said would allow Mariel to handle Post-Panamax ships that will traverse the Panama Canal when its expansion is completed in the second half of 2015.

Castro said Monday that Cuba’s “geographic location along the route of the main maritime transportation flows in our hemisphere will favor its consolidation as a regional logistics platform of the first order.”

But port analysts say Mariel won’t reach its full potential as a trans-shipment port — where Post-Panamax container ships discharge cargo that is loaded on smaller feeder ships bound for ports too shallow to accommodate the big ships — as long as the U.S. embargo against Cuba remains in place.

That puts the largest market in the Americas out of bounds for cargo trans-shipped through Cuba. PortMiami is currently in the midst of a dredging project that should make it big-ship ready by the time the canal expansion is completed.

The Mariel project is an indication of growing friendliness between Brasilia and Havana. It was Rousseff’s second visit as president to Cuba and she said that the cooperation on Mariel was “a symbol of our lasting friendship.’’

During his speech at Mariel, Castro noted the project “has depended on important financing from the Brazilian government at advantageous terms that began under the presidency of Lula (President Luiz Inacio Lula da Silva, Rousseff’s predecessor) and it has not only been a great help in building the container terminal but also in other public works such as highways, networks, rail lines and dredging the bay.”

The $957-million project was financed by a $682 million loan from Brazil’s National Bank of Economic and Social Development with the rest of the financing coming from Cuba. Rousseff noted that Cuba purchased more than $800 million in goods and services from Brazilian suppliers during construction.

A subsidiary of the Brazilian construction giant Odebrecht is working on the port — and that has landed Odebrecht in hot water in some Cuban exile circles.

Another Odebrecht company, Odebrecht USA, has won major public contracts from American Airlines Arena to the North and South Terminals at Miami International Airport but it does no work in Cuba.

Some exiles contend that Odebrecht shouldn’t be awarded public contracts if its parent company does business in Cuba.

A 2012 state law that appeared to target Odebrecht USA prohibited state and local governments from hiring companies with business ties to Cuba for any projects worth at least $1 million. Odebrecht sued and an appeals court ruled in its favor in May.

The priority during the next phase of improving Cuba’s transportation network, Castro said, will be upgrading the island’s rail system to help give the renovated port more value and lower transportation costs.

Rousseff said Brazil would be providing financing of more than $200 million during the second phase of the Mariel renovation. When the project is completed, the port is expected to be able to handle 3 million containers annually.

Rousseff also said there was growing interest on the part of Brazilian companies in locating in the Mariel Special Development Zone.

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