Building anew: Ecuador is betting nearly US$900 million on airports and roads to capture a slice of world trade.

Like in many parts of Latin America, people in Ecuador are used to waiting a long time for infrastructure projects to materialize. This appears to be changing, though, with the Ecuadoran government's plans to invest close to US$900 million on three airports and a highway.

Plans to build a new airport for Quito, as well as remodel and expand one in Guayaquil, had been under discussion for 30 years. The mayors of Ecuador's two largest cities have since stepped up the pace of the projects, which will require investments of $400 million and $70 million, respectively.

The new Quito airport is expected to be ready in 2009. It will be built 24 kilometers west of Quito and at 2,400 meters above sea level. The distance from the new facility promises to put an end to the deafening noise airplanes make when landing at the current airport. The new airport also will cover 1,500 hectares.

Ecuadoran flower growers and fishermen are expected to benefit most. Diego Borja, president of Expoflores, which represents the country's flower producers, says that the new airport will boost his business. "It's impossible to grow without a new airport; opening new markets under existing conditions is impossible," he says. The country is a big oil exporter, but it is increasingly known in wealthy nearby markets like the United States and Canada for its "just-in-time" products that move via air, like shrimp and cut flowers.

Ecuador's exports are projected to hit $6.90 billion in 2005, helping to offset similar imports and keep the country's accounts in balance. High oil prices--nearly double on global demand, particularly from China--play a role. But increased sales of goods like flowers are helping the country to grow without exacerbating inflation.

Consumer prices nationally are forecast to decline, in fact, to 1.4% by 2006, an inflation rate that the Economic Commission for Latin America and the Caribbean characterizes as that of a developed economy.

Each year, about 80,000 tons of flowers worth $300 million leave from Quito's current international airport. Borja says that one of the main benefits of the new terminal is an anticipated reduction in air-freight costs, thanks to the arrival of new companies. Limited air-freight options make shipping flowers from Ecuador 60% more expensive than from Colombia or Peru, Borja says, a cost that domestic exporters must now absorb.

A bigger cargo terminal--planned for 11,000 square meters with the capacity to move 270,000 tons a year--means companies will have their own storage rooms and cargo ramps, optimizing the export chain. Over the next decade, Expoflores projects annual growth of 6%, a figure that will be recalculated again once the new airport is in operation and its full impact better measured. The flower industry in Ecuador consists of 250 companies employing 60,000 and indirectly supporting 110,000 more workers, 60% of whom are women. "Imagine how much we could grow with a new airport," says Borja.

Construction, which began in August of 2004, is being overseen by the city of Quito and the Airport Corporation and Duty-Free Zone of the Metropolitan District of Quito (Corpaq). The project's cost is being financed by its concession manager, the Quiport Corporation, with credits from multilateral groups like the U.S. Overseas Private Investment Corporation, Inter-American Development Bank, the U.S. Export-Import Bank and Energy Development Corporation, a U.S. company. Corpaq, which will manage the airport for 35 years, plans to inject some of its own funds.

Diego Pachel, Quiport's manager, says that the airport's design will adhere to the highest international standards and employ the latest technology in the aviation industry. He expects that the project will have an immediate economic impact on the country. Thanks to the airport project, the construction sector will account for 8.5% of Ecuador's gross domestic product, versus 7.2% without it, Pachel says.

Modernization should also reduce fatal air accidents, which have occurred four times in the last 15 years in the metropolitan Quito area, killing at least 100 people. The capital's new terminal will be able to handle four million passengers a year, putting it in the company of airports in Miami, Houston, San Francisco, Sao Paulo and Santiago, Chile with level B status from the International Air Transport Association.

By operating in a duty-free zone with a technology park, the airport is expected to convert the area into a new center of development for Quito. Mauricio Pinto, president of the Exporters Federation, says that the two airport projects will drive the economy and productivity, and especially international trade, for years to come.

While Quito residents will have to wait four more years to see this dream become reality, the opening of a remodeled Guayaquil facility is slated for July 2006. "The globalized world demands that we have airport infrastructure that meets challenges presented by trends in tourism and commerce," says Jaime Nebot, mayor of Guayaquil. Since Guayaquil is one of the Ecuadoran economy's pillars, Nebot says, the city faces the challenge of leading development and taking advantage of its location on the Pacific Basin, which will soon make it a heavyweight in world trade, thanks to Asian demand, particularly from China.

The work will be financed by concession-holder Taxa Terminal Aereo Guayaquil, which groups Aeropuertos de Argentina 2000 with a 60% equity stake and Ecuadoran construction firm Grupo Deller with the remaining 40%, according to Nicolas Romero, manager of the Guayaquil Airport Authority. The concession lasts 15 years.

A new, 30,000-square-meter terminal will be able to handle up to three million travelers a year. With more than $30 million invested to date, construction began in August of Guayaquirs new 6,000-square-meter cargo terminal and a 31-meter-high control tower is now half-built. Scarce. An entirely new airport in Guayaquil might have been a better choice, planners concede, but financing was scarce, says Romero. The remodeled airport should cover air transport needs in the area for the next 15 years, he says.

Another big infrastructure project that Ecuadorans have been waiting a century to see move forward is construction of the so-called Via del Sol, which would cut in half the time it takes to travel by land between Quito and Guayaquil, to four hours. This project, which will cost an estimated $360 million, was announced this year and is being financed by a credit from Brazil's national development bank Banco Nacional de Desenvolvimento Economico e Social (BNDES).

The bank will also finance the $60 million construction of an international airport in Tena, in Ecuador's Napo province in the Amazon. In addition to supporting public works that help integrate the region, BNDES expects that Brazilian construction firms will participate in these ambitious projects. The Brazilian bank has been financing projects around the region in an effort to build a reliable export network from Brazil--on the east coast of South America--to ports on the Caribbean and west coast, with access to Pacific Ocean trade routes to Asia.