Going deep: an Ecuadoran port wants private investors to make it deeper to better serve Asian markets.

Just 40 kilometers away from international shipping lanes on the high seas, sticking out from the western reaches of South America, a four-wharf shipping terminal handles traffic in 12 meters of water. Yet there's room to dig deep, making shipping harbors run as far as 35 meters down. The port is Manta, and it's open all year and it doesn't need continuous dredging. It's got everything a port needs to become one of the South Pacific's busiest ports in the near future.

Trajano Andrade, president of the Manta Port Authority, says there are a number of reasons why his port could become one of the most competitive in South America. "Manta's strategic location makes it the closest to Asia, which gives it competitive advantages over the ports at Buenaventura in Colombia or Callao in Peru," Andrade says.

While current depths at Buenaventura and Callao also reach 12 meters, Manta will be the easiest to reach 35 meters from port to open sea, according to Andrade. Expansion at Buenaventura required investments of upwards of US$200 million, which would make shipping there much more expensive to port users as the cost is passed on to customers. Furthermore, heavy rains close or suspend shipping activities at Buenaventura from time to time. That's why the Colombian government wants to build a new port in Malaga Bay to the north. The Port of Callao, meanwhile, operates several terminals but only one of them can be converted into a deep-water facility.

Beginning in January 2008, Ecuador expects the Port of Manta to move 400,000 containers from China, Japan and other Asian countries that cannot fit through the Panama Canal. From Manta, the shipments will head off to other South American markets.

To achieve this goal, the Port of Manta in July 2006 will hold an international auction for companies interested in taking charge of modernizing the port by turning it into Ecuador's only deep-water facility. A first phase will deepen channels to 15 meters, a project that will require $100 million, according to estimates compiled by U.S. engineering firm Moffat & Nichol. "We are confident that the world's largest maritime companies will want to be a part of this," Andrade says.

The winning bidder will operate the port for 25 years and will also oversee a second expansionary phase that will deepen channels to 20 meters, which will require an investment of another $170 million. That depth will allow ships carrying 4,500 containers to call on the port. (Technical studies say the port channels could go down 35 meters.)

According to the Manta Port Authority, Dutch shipping giant Maersk, U.S. shipper CCNI and the Hutchinson consortium, which manages shipping operations in Hong Kong, four ports in Mexico, and in Panama City, Balboa and Colon, have expressed interest in bidding to improve the Ecuadoran port.

A successful bid would be a golden opportunity for the city, says Jorge Zambrano, Manta's mayor. "The Pacific basin is home to a market of 5 billion consumers and many of the products supplying this region could come through the Port of Manta" Zambrano says.

The horizon is brighter still, says Sergio de Abreu, Brazil's ambassador to Ecuador. The construction sector in Brazil and Ecuador will earn some money as it develops infrastructure connecting the two countries. Brazil wants Manta to become a bustling intermodal logistics center that connects South America's Pacific and Atlantic coasts, Abreu says.

New identity. Lucia Fernandez, president of the Ecuadoran-American Chamber of Commerce says that while the commercial fishing sector will continue to be Manta's economic engine, the city really began to take shape in 1999 when it opened a forward operating location, which is a military base that houses U.S. personnel who largely work to halt drug traffickers and Colombian guerrillas.

The military installation, an $80 million investment, has already created many jobs. According to Glen Warren, a former press attache at the U.S. Embassy in Ecuador, the base costs $7.5 million a year to operate. Thanks to U.S. presence and security in the area, Warren says, investors will look favorably on the city.