March 3rd, 2011
"The Western Gate" Railway Project in Colombia
As an active company in strategic consulting services to the
Colombian government GCD is delighted to inform that the Colombian
government has decided to reconstruct the national railways system
with a strategic decision to reinforce the commercial relations
with China and the Far East countries. Colombia is one of worlds
richest countries in minerals and is planning, via the railways
project, to bring to China and other Far East countries millions of
tons of various minerals. GCD operates as the developing company of
the major railway project in Colombia known as the Western Gate
Project.
Global Group: DescriptionGlobal Group (which GCD is part of)
involves itself with projects at the national forefront, including
infrastructure and other economy-enhancing ventures. Founded five
years ago by Major General (R) Israel Ziv and associated partners
such as Prof. Shlomo Ben Any (former Israeli Foreign Minister), Dr.
Efraim Sneh (former Israeli Minister of Health) as well as other
Israeli and international senior political figures. The Group has
since played an active role in areas such as South America, Africa,
and Eastern Europe, carrying out both security and commercial
large-scale projects.
Colombia: A Country on the Rise Colombias geographic location
and its geo-strategic position it as one of the most important
countries in South America. In recent years, Colombia has made a
giant leap forward on virtually every possible account - and is now
viewed by many as South America's most promising destination for
investment: its relations with neighboring countries have deepened
and strengthened; the crime and terror index has declined to
negligible levels; there is a significant rise in foreign
investment flows; and the democratic system shows remarkable
stability and efficiency. An extensive article published recently
in Newsweek magazine attributed Colombia with the title, "The
Shining Star of the South" ascribing the country with impressive
standards of progress.
Enhancing Colombia's Economic ProsperityThe major force behind
this wind of change, providing an imperative tail wind, is Colombia
itself. In various occasions, both in person and publicly, the
President himself has explicitly highlighted the need to pursue
business opportunities with strong potential to serve as engine
growths for the enhancement of economic prosperity, and has
promised to prove his commitment
by designating these endeavors a status of National Priority a
decision that holds bureaucratic and financial benefits that
expedite execution. Global Group has played, and continues to play,
a significant role in assisting the President and his
administration in recognizing business ventures with such
potential. From initiating projects and attracting investors, to
designing concepts and leading project committees on various
topics, the company is deeply involved with Colombian national
projects.
"Western Gate": The Main IdeaFor years, the lack of connectivity
in the railway system and seaports has lead to a bottleneck effect
hindering development of the national economy. Specifically, coal
and other minerals with high export potential were not fully
realized, leaving the main national economic engines
underdeveloped. With the understanding that major world demand is
emerging from the Far East and that railway and port
construction/rehabilitation projects may serve as a great incentive
for social and economic growth, Global Group realized the
opportunity of developing a renewed and improved national railway
system.The goal of the "Western Gate" project is twofold:A. To
upgrade the national railway system in order to enable economic
growth for Colombia via exports (namely coal and other minerals at
high demand). B. To create a strategic change for Colombian exports
facing the Eastern hemisphere by using the Pacific Ocean.
Project DescriptionThe project includes the rebuilding and
construction of 791 km of railroad, including expansion and
improvement works on a suitable port on the country's West coast.
China Railways has been selected as the project's main contractor,
and will carry out all planning and construction works.
In the future, the project is expected to extend and promote
other initiatives such as the development of mining areas and
constructing suitable logistics zones.The project has been
estimated at $7.6 billion.
Project FrameworkThe general framework for accomplishing this
project is employed through a Colombian-Chinese
Government-to-Government Agreement (G2G). The involvement of both
governments should help secure the investment by overcoming
financial barriers in the form of security deposits and bonds. In
order to ensure the financial aspect is fully carried out and
receives special attention, all parties - including an
inter-ministerial committee appointed by the Colombian President
(and comprised of delegates from the various ministries involved) -
have agreed to establish a certain process to circumvent regular
bureaucratic measures that have hindered similar efforts in the
past. This will, hopefully, pave a clear path for quick
implementation and successful results.
National Benefits for Colombia Reduction of interior
transportation costs the development and upgrading of railways
allows not only for mobilization solutions within the country, but
also for easier access to and from the region. The economic
implications that are deduced from the abovementioned point are
clear: Colombian commodities and other goods would arrive easily
and at lower prices to China, India and other countries in the
pacific region. Furthermore, the quantities exported to these
countries and others would rise dramatically fulfilling the
President's vision to enhance economic prosperity in the country.
Employment the effect of creating thousand of new jobs is
tremendous and well-appreciated. Strengthening diplomatic relations
through the G2G agreement, which includes the involvement and
active support of China, this type of partnership might mark an
important cornerstone to future cooperation on other mutual
endeavors to follow.
ConclusionAfter several discussions with President Santos and
the relevant ministers, we are now certain that all parties
involved are united in the understanding that the potential of this
project is unordinary, and could very well signify a turning point
in the development of the region and its desired economic
enhancement.