Latin America needs to become connected. We have to look toward the interior of Latin America. I cannot imagine this region with double the population, a developed interior with prosperous cities without the necessary communication.
He believes in an interconnected Latin America –integrated through infrastructure. He also believes that economic and social development will come from that network of engineering and construction. Eduardo Eurnekian began his career working in the family textile business and today he ope-rates airports, has mining and agricultural projects, is the owner of a multimedia corporation and a biodiesel plant. He recently bought a winery and is now immersed in what will be one of the largest infrastructure projects in South America: the Bioceanic Aconcagua Corridor, a tunnel that will traverse the Andes Mountains and open at the Pacific Ocean, 5,100 kilometers (3,168 miles) south of the Panama Canal.
“Latin America needs to become connected,” Eurnekian tells Latin Trade from his office in the Palermo neighborhood in Buenos Aires. “We have to look toward the interior of Latin America. I cannot imagine this region with double the population, a developed interior with prosperous cities without the necessary communication,” he says.
He emphasizes the need for railroads, roadways, tunnels, connectivity, airports and large-scale infrastructure projects that bore through the hemisphere’s center, stretching from north to south and east to west. Eurnekian stresses the need for large-scale projects that generate business, employment, development and that lead to better living standards.
Talk soon turns to the subject of the corridor, a $4.2 billion rail project that will run across the Argentina-Chile border. Bidding on this project begins mid-year. This project was conceived out of the need to transport products from the Southern Cone to the Pacific year-round via a route that would be closer than Panama and less expensive and complicated than the Strait of Magellan route in southern Patagonia. Although there are many passes along the 3,200-mile border between the two countries, the Cristo Redentor in Mendoza, which is generally used to transport cargo, suffers frequent shutdowns during the winter months due to the heavy snowstorms at its 3,200-meters (10,500-feet) altitude.
Eurnekian does not know if this project is the culmination of his long career, but it is what enthusiastically consumes him today. He believes that Argentina needs such projects. The businessman emphasizes that there is much construction to be done in the variety of investment opportunities that Argentina offers. “Argentina has an enormous ichthyological potential in its marine platforms, agricultural development in the pampas, petroleum centers in the south, marine basins for oil and gas drilling in the north and an array of mineral riches along the border with Chile,” he says. “If we add together the natural beauty in the south, the lakes, mountain ranges, pampas, and all of the northern region, we are talking about investment potential for hotel activities and businesses that is unparalleled anywhere in the world.”
He is convinced that investment prospers through the effort, abi-lity and creativity of those who move it forward—beyond the country where it was created. In his opinion, Argentina is not particularly difficult or potentially risky for investment, he says. Rather, it lacks a more global cachet because investors only focus on the recent history in the region. Without mentioning Mexico or Brazil by name, he points out that other countries have had to rely on foreign financial resources to avoid collapse. Yet he establishes an implicit comparison saying that this has not happened in Argentina.
Eurnekian further believes that a foreign investor would not have significantly different difficulties investing and working in Argentina than those that may be encountered elsewhere. “It [Argentina] is as complex as any other country. I believe that conditions are the same. I do not think that Argentina is any less friendly than any other country,” he says, adding that in Argentina, there is no ideological clash regarding investments or the foreigners who might bring them.
The entrepreneur remains committed to Argentina (as were his parents) though his diverse investment portfolio has brought him to various countries throughout the region as well as to Italy, Morocco and Armenia—the land of his ancestors.
In fact, Eurnekian believes Argentina has a comparative advantage when it comes to the ability, suitability and training of the Argentine worker who easily adapts to any activity. At the same time, despite the expanse of the Argentine territory, he believes the country has a strong communications infrastructure, and viable road connections, meaning that an investment in the interior does not mean that you are “stuck in the middle of nowhere”.
Eurnekian also dismisses the idea of the additional “Argentine cost” as is often heard in business forums. “Tell me what it costs in the United States, Europe or any other country in the world,” he challenges. “Now, yes, it is cheaper to invest in a politically unstable country such as somewhere in Africa, but that also has its price.”
Bioceanic Aconcagua Corridor
There will be only 205 kilometers (127 miles) of railroad tracks, but they will put an end to what was an axiom of South American “real politik” for more than a century: Argentina on the Atlantic and Chile on the Pacific. The Bioceanic Aconcagua Corridor project will bore through the formidable physical barrier—the Andes Mountains—increasing commerce throughout South America. The completion of this tunnel will revitalize commerce in the region with a transportation system capable of shipping more than 70 million tons of products to Asia annually.
Currently, 83 percent of Southern Cone commerce that leaves for the Pacific is sent by ship—a very long and costly route. Most of the remainder goes through the Cristo Redentor Pass in Mendoza, Argentina. In the winter months, this route is clogged with long lines of stranded trucks waiting for the snow storms to end. The pass can be closed for up to 60 days in winter due to bad weather.
The key to the Bioceanic Aconcagua Corridor is that it is being built 700 meters (2,300 feet) lower than the Cristo Redentor Pass, which guarantees its operation year-round. This project consists of a main 52-kilometer (31 mile) tunnel and 33 secondary tunnels with a total of 20 additional kilometers, 75 bridges and 33 viaducts. The railroad is electric with wide tracks that will be joined to other pre-existing railroad tracks in both countries.
For decades both sides of the mountain range have talked about the need for a pass of this type, and now the project is underway. The original design from Tecnicagua—which Eurnekian bought—follows 13 other projects from which the current one emerged. The project will be completed by a consortium made up of Corporación América, the Chilean companies Empresas Navieras S.A and Contrera Hermanos S.A., Japan’s Mitsubishi Corporation and Geodata SpA of Italy. Other companies such as Brazil’s Camargo Correa, will participate to a lesser degree.
Eduardo Eurnekian’s investment portfolio is surprisingly diverse. His company, Aeropuertos Argentina 2000, modernized the main terminals in Argentina, and today he manages 35 airports in that country and controls 90 percent of the air passenger traffic. He has also renovated terminals in Lima, Peru, and in Carrasco and Punta del Este in Uruguay. In Ecuador, he revamped Guayaquil airport and built the Ecological Airport in the Galapagos Islands. In November, Brazil granted him the first concession ever given to a private company for renovation of an airport: Natal. With terminals in Sicily and Armenia, he now has 10 foreign airports in his portfolio.
One of his companies controls 1,600 kilometers (994 miles) of highway in Argentina and another is awaiting appro-val from Uruguayan authorities to build an ecological park with an investment of $120 million. He is also the owner of a multimedia company in Argentina, Corporación América. Currently, he is preparing to participate in the construction of the Condor Cliff-La Barrancosa hydroelectric dam in Argentina’s far south.
Eurnekian has also expanded into a potentially strategic field: biofuels. He has installed his first biodiesel processing plant in the province of Santa Fe, northeast of Buenos Aires. This plant produces 240,000 tons of fuel annually and this year will increase production to 1 million tons by processing soybean oil to make the final product.
In the agricultural sector he operates more than 100,000 hectares (274,105 acres) in various Argentine provinces with 20 percent of that land irrigated. He bought the Bodega del Fin del Mundo, a winery in the Patagonian province of Neuquén and he also recently incorporated a gourmet restaurant in Buenos Aires, “Experiencia del Fin del Mundo.” Eurnekian also has approximately 20,000 head of Brangus cattle in the northern province of Chaco for the purpose of producing high-quality export meat.
And he is also involved in charities, supporting a range of philanthropic activities in both Latin America and in Armenia. There, Eurnekian owns Converse Bank, which focuses on retail and commercial banking, and also runs that country’s postal service.
Eurnekian is convinced that technology must be incorporated in order to improve living conditions. “The current crisis is an indication that the existing technology is worn out; we need innovation,” he says. With that in mind, he is looking into future investments in biotechnology, research and pharmaceutical development.
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