ARUBA Renovation and modernisation of facilities aims to encourage visitors, trade and investment that will develop and diversify the economy

Facelift for air and sea ports to meet demand

Oranjestad, the capital and main port of Aruba, is becoming congested as more cruise liners and cargo vessels line up for berths. To solve the problem, the old port of Barcadera, originally built to service a chemical plant that has long since closed, is to be renovated and will be dedicated to cargo handling. Milton Henriquez, managing director of Aruba Ports Authority, says: “As a result of growth and the rapid and significant expansion of the cruise ship business, Oranjestad port can no longer cater for both cargo handling and cruise ship operations. “The old port of Barcadera is going to be rehabilitated and reconstructed in order to accommodate the transfer of all cargo operations from Oranjestad by the second half of 2002. The move will automatically open up additional space and berths for cruise ships.” The number of passengers on cruise liners calling at the capital is forecast to increase to 600,000 in 2002, up from last year’s figure of around 500,000. “The government’s plans include moving the island’s free trade zone (FTZ) from the capital to Barcadera during 2002-2003, which will help to promote FTZ activities,” says Mr Henriquez. “At the present time, the Oranjestad port handles about 63,000 tonne equivalent units (teu) a year. The port at Barcadera will be able to accommodate up to 120,000 tonnes, if there is an increase in local cargo and as activities develop.” The authorities are keen to expand the FTZ as a distribution centre for hi-tech services and semi-finished products for re-export to Latin America or Europe.

The number of cruise liner passengers is set to increase to 600,000

Transportation would be either by sea or by air as Barcadera is near to Aruba’s international airport. Mr Henriquez says that once Oranjestad is freed up to only handle cruise ships, no further investments should be necessary at the port during the next 10 years. To finance the rehabilitation of Barcadera, the state wishes to acquire loans of $25-$30 million from international financial institutions. “With investment, the government hopes to step up its efforts to diversify the Aruban economy, which is very significantly based on tourism,” he adds. The transport, communications, sport and public utilities minister, Glenbert Croes, says Barcadera is set to become the “commercial distribution centre for the region. We hope to be the hub for the region until others come up to par. Infrastructure is one of the reasons why we have prospered so much.” The minister says that because labour costs are higher in Aruba than elsewhere in the region, attempts to diversify the economy will rest on attracting capital-intensive, hi-tech industries. “Hopefully, there is an opportunity for that,” adds Mr Croes. As other sectors begin to open up, “the island’s future lies in the telecommunications industry”, he says. Air transport is vital to support the tourism industry and while Queen Beatrix international airport is still state-owned, management has been privatised. The airport, where capacity has been increased to handle 2.5 million passengers a year, was inaugurated last September. There is also a dedicated terminal for US flights.

Aruba Airport Authority managing director Simon Arends says: “When you fly to the US from Aruba, it is now considered to be a local flight.” He is optimistic that there will be more flights from Europe. “We have not seen the increase in European tourists that we would like. We hope to receive a more diverse mix of tourists, because at the moment most are from the US and Venezuela.” There are plans to double cargo-handling capacity, although the airport authority will concentrate its efforts on managing the terminal. “The people who are responsible for handling cargo are going to have to work in coordination with us through a joint venture or partnership. We will not be getting involved in any of the operational activities, however. “As the airport authority, we want to stick to our core business, and perhaps work with private companies in airport-related enterprises, such as aircraft maintenance. “Considering the size of Aruba, expansion of the airport represented a huge investment. The scheme to upgrade facilities cost a great deal of money and it is important that we run it as a business,” he says. Some $62 million was raised through bond issues and a further $23 million was acquired from the state to finance the modernisation program. “The bond issue on the international market is one of the reasons why the Authority had to be privatised – it was one of the requirements. Today, there is less government intervention and we have a much more independent management,” he adds.