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Uruguay bridge: If we build it, will they come?
Journal of Commerce / June 16, 1998

By Larry Luxner

COLONIA, Uruguay -- For the past seven years, one topic of conversation has dominated all others in this historic port city of 23,000: a proposed bridge that would link tiny Colonia to sprawling Buenos Aires, Argentina.

The puente, as it's known in Spanish, would be the longest of its kind in the world, spanning 26 miles across an estuary separating the two countries. Proponents say the briege -- projected to cost at least $1 billion -- would dramatically reduce trucking time between Buenos Aires and São Paulo, Brazil, create thousands of jobs for Colonia and, most importantly, strengthen Uruguay's position within Mercosur, a customs union linking the economies of Argentina, Brazil, Uruguay and Paraguay.

Yet opponents say the bridge would destroy Colonia's charm forever.

"Buenos Aires is a big city, and we're afraid of losing our identity," says Ithella Sosa Vignolo, a social worker employed by the city's tourism department. "Delinquency will rise, drugs will get worse and we'll lose more than we'll gain."

Fernando Balbucha, a sidewalk vendor who sells Uruguayan handicrafts across from the aptly named Café Mercosur, puts it in perspective: "There are some people who want the puente and some who don't. As a businessman, I want it."

So does Col. Artigas Miranda Dutra, who heads Colonia's historic commission.

"Many people think they'll lose tranquility, but with progress, this is always the case," said Miranda. "The opinion of a small town like Colonia cannot influence the interests of three countries."

Later this month, the Uruguayan Senate begins debating whether to approve construction of the bridge. As now envisioned, the four-lane puente would stretch from Punta Lara, southeast of Buenos Aires, across the Rio de la Plata estuary to Punta de los Patos, eight kilometers east of Colonia.

The final design features four elevated bridge spans for ship traffic, three of them 32 meters high and 200 meters wide, and the principal bridge 65 meters high and 550 meters wide. The foundations will be built on piles at depths of 20 to 45 meters, according to specifications provided by the 15-member Binational Bridge Commission in Montevideo.

"Our studies show that the bridge will start making money immediately," said commission staffer Jorge Camaño. "We hope it'll be approved this month, and that before year's end, both the Argentine and Uruguayan governments will approve the treaty."

If that happens, tenders will soon be opened for a 35-year concession to build and operate the bridge. Seven international consortia have already been prequalified; two of them include U.S. firms Bechtel and Parsons. Feasibility studies by Louis Berger International Inc., Latham & Watkins and Bear Stearns & Co. Inc. predict annual revenues of $170 million and a 27.8% internal rate of return by 2003 -- assuming a daily traffic flow of 5,400 vehicles (90% of them cars, 7% trucks and 3% buses). Automobiles would pay a toll of $75, trucks and buses considerably more.

Closely linked to this project is a proposed Mercosur highway uniting three of the trade bloc's four founding member nations -- Argentina, Brazil and Uruguay. As such, the Uruguayan Ministry of Transport has already hired French consulting firm BCEOM to do a feasibility study on construction of this proposed international superhighway that would link Porto Alegre, Brazil, and Buenos Aires. The Uruguayan section of this 1,100-kilometer roadway is 600 kilometers, and would "consist of highways that already exist and must be improved or reconstructed," according to a ministry report.

The $240 million superhighway would pass through the Uruguayan cities of San Jose, Canelones, Treinta y Tres, Rio Branco and into Brazil. Once finished, say proponents, it would slash freight and passenger transportation costs, since the road distance between São Paulo and Buenos Aires will be shortened by around 250 kilometers.

Both President Julio Maria Sanguinetti and his chief rival, Luis Alberto Lacalle, enthusiastically support the project.

"I'm 100% in favor of it," Sanguinetti said in an interview last month. "We hope it'll be approved by the Senate in October." Lacalle, who served as president from 1990 to 1995, says "it's a modern thing to do. It's a bonus for Uruguay."

Adds Tourism Minister Benito Stern: "This bridge will have an enormous impact on tourism income," Stern said, "bringing 10 times as many tourists from Buenos Aires as today." Camaño, refuting charges the puente may cause long-term environmental damage, says "the only problem the bridge would generate is a population increase in Colonia. It won't cause problems to the estuary, it won't alter a single natural condition and it won't affect the sedimentation levels."

Alvaro Diez de Medina, Uruguay's ambassador to the United States, said in an interview Thursday that "only the left-wing and right-wing fringes of political soceity are opposed" to the bridge.

"Its impact will be substantial in every aspect of economic activity," he said. "It will clearly put our country in the middle of the São Paulo-Buenos Aires corridor, and it will bring new life into the interior of the country. It will also give us the necessary resources we need to upgrade our highway system."

Yet Ariel Davrieux, director of Uruguay's Office of Planning and Budge, says "it is very difficult for the puente to be commercially viable," given its high cost.

Another skeptic is David Michaels, president of the Uruguayan-American Chamber of Commerce in New York.

"There is a belief that there's no way this bridge can be constructed for the money they're talking about," he says, hinting that the final cost could reach $2 billion or even $3 billion.

"Forget the tourism argument," he advises. "Tourists who want to go to Uruguay already have a way of getting there. The bridge is only important from the aspect of transporting freight, and there are other ways to resolve this transport problem."

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