[URRACA]

Nicaragua will turn over control of Puerto Cabezas, the country’s main Caribbean port, to two New Orleans businessmen at the end of the month. The deal is part of Nicaragua’s efforts to help the timber, fruits, vegetables and seafood it harvests compete in the world market by reducing the cost to transport those goods.
One of the two local port investors, John Wheelock, says the deal will make it possible for other investors to turn the country’s rich natural resources in lumber, gold, agriculture and seafood into new business ventures. He will also be looking for Louisiana contractors to help rebuild Puerto Cabezas. “We are looking at bringing as many Louisiana companies as we can into this project,” says Wheelock, who was born in Nicaragua.

The deal arose after Wheelock sought an investment in a power plant in his native country. “When we tried to do a power plant in Nicaragua, we discovered that we needed our own port to make it competitive,” he says. Wheelock says the power plant needs the port because it will consume fuel. The flow of petroleum to Nicaragua is one of the main challenges to development in the country, he says.

Wheelock entered into a joint venture with New Orleans maritime engineer Prescott Follett to talk to the Nicaraguan port authority about privatizing the port. The two met on a trade mission sponsored by MetroVision, the New Orleans Regional Chamber of Commerce’s economic development agency, in 1997.

After being approached by Wheelock, Nicaragua put a concession for the port out to public bid. Wheelock says the only proposal it received was from a joint venture between Wheelock’s company, Delasa, and Prescott Follett & Associates.

Wheelock and Follett signed a 25-year contract to operate the port last September, in which they agreed to pump more than $100 million in improvements into the port. In March, the National Assembly signed off on the deal.

Wheelock hopes to immediately start rebuilding the port. The first round of improvements will include about $3 million in repairs to the dock, warehouses and other facilities at the port.

A second phase of construction will begin after the government of Nicaragua finishes paving a two-lane road that connects its urban Pacific coast with the sparsely populated Caribbean side, where the port is located. The 500-kilometer road will make it easier for Nicaragua to trade in the Gulf of Mexico without having to go through ports in Honduras or Costa Rica, Wheelock says. That’s when the joint venture will invest $15 million in a 24-megawatt power plant and apply for free trade zones near the port where businesses can sprout up.

The final round of construction is an $85 million investment to dredge the port to a depth of 45 feet. It will also make the port capable of handling the large steel containers that are the preferred method of transporting finished and semifinished goods.

Some New Orleans contractors known for their maritime expertise are already sniffing the deal for potential contracts.

Boh Bros. Construction Co. has been watching, says President Robert S. Boh. The construction company has built docks for the Port of New Orleans and other gulf ports, but hasn’t had any business overseas. “It’s been very casual conversations up to this point,” he says.

CF Bean Corp., a Belle Chasse dredging company, has offered some advice to Follett as he designs the port. Marketing director Ancil Taylor says all of Bean’s dredges are occupied right now with work in the U.S. He says the prospect of Bean bidding on the project to deepen Puerto Cabezas depends on whether it has a dredge to spare when the contract comes up for bid and how much it will cost to get that dredge to Nicaragua.

Michael Conwell, Hibernia National Bank’s international banking manager, has been working with the Puerto Cabezas partnership to help it seek sources of funding from multilateral lending institutions, such as the Inter-American Development Bank.

He says the redeveloped port’s ties with the Crescent City sparks the opportunity for more local companies and local ports to get involved.

He sees the effort as part of the struggle to restore New Orleans as the “Gateway to the Americas.” The city let that title slip, banking on the oil industry in the late 1970s while Miami made an aggressive bid for Latin American trade, he says.

“This is our opportunity to break the stranglehold that Miami has with trade to Nicaragua,” Conwell says.•

Locals to visit Nicaragua in search of new markets
BY Chris Bonura, Staff Writer

To Nicaraguans, a project to pave the dirt road that connects the Central American country’s developed Pacific Coast with its marshy and rural Atlantic Coast represents a major push for development. For a Harvey company, it represents an opportunity to sell the amphibious cranes it has made since the 1970s.
Wilco Marsh Buggies is one of a dozen local companies sending representatives on a trade mission to the Nicaraguan capital of Managua this week. The trip, organized by the World Trade Center of New Orleans, will bring business leaders in contact with some of Nicaragua’s most influential business and political leaders.

Wilco Office Manager Carlos Naranjo, who will travel with the trade mission, says the company has sold its amphibious cranes to other Latin American countries, but hasn’t yet marketed to Nicaraguans.

Wilco outfits cranes with pontoons that have tracks underneath them. The tracks can move the equipment in shallow water, working much like a paddlewheeler. The pontoon can be pushed with airboats, or it can drag itself with its boom.

Naranjo says his company’s product and Nicaragua’s marshy eastern coast seem like a good fit, but he knows that international deals must be nurtured over time.

“We are not going there with an expectation of selling 20 machines. But doing business there is a possibility because of the nature of the land and the direction that the country is moving in,” he says.

Just as local executives are gearing up their pitch to do business with their Latin American neighbors, Nicaragua is trying to recast itself as a country friendly to foreign investment.

Nicaragua has had an ambivalent relationship with the U.S. Although the country has long embraced U.S. cultural influences, the Marxist ideology of its Sandinista revolutionaries pitted the U.S. against the country during the Cold War.

Gertrudis Velasquez de Lacayo, Nicaragua’s Consul General to New Orleans, says the administrations of the country’s democratically elected presidents have tried to engage the U.S. during the last 11 years. She says this is in contrast to the Sandinista leadership that thumbed its nose at the U.S. when it was in power in the 1980s.

“The North American people are trying to help us,” she says. “You don’t put salt on top of a delicious piece of bread with good butter. The Sandinistas expect the United States to help us, but they want to criticize the United States, too.”

By the same token, U.S. businesses have a feat of diplomacy to achieve. The U.S. government funded the counter-revolutionaries, prolonging a civil war that weighed heavy on the country’s poor. Although New Orleans has long-standing trading ties with Nicaragua, some of those ties go back to the days when banana companies resorted to political intrigue to gain a business advantage.

“You have to have more of a diplomatic approach to business than the strong-arm approach that was the way of doing business before,” says Charles Nelson, president of the New Orleans-based industrial engineering firm Waldemar S. Nelson and Co.

There will be plenty of opportunities for foreign investment as the country develops its ports, increases its electricity production and considers opening up oil fields off its Atlantic coast, says Nelson, a vice president of the World Trade Center of New Orleans and a veteran of several trade missions.

Nelson says there is pent up demand for development that was neglected in Nicaragua during the 1980s. Now that the government seems more stable, U.S. executives are more likely to do business there, he says. Both independent and major oil companies have their eyes on the oil fields on Nicaragua’s coast. Nelson calls the oil fields “virgin territory.”

Nicole Gilbert, a vice president for Hibernia Investments LLC, is trying to tap into another such territory in the Nicaraguan economy. She says there is a large potential market for helping Latin America’s elite invest their money. She’s going to Nicaragua to try to convince Nicaraguans to invest in Treasury Bills, mutual funds and other U.S. investments. The subsidiary of Hibernia National Bank has expertise with offshore investments, usually mutual funds that correspond to those available in the U.S. but are run from another country to avoid a large tax burden.

She says there is a steep learning curve for potential investors from Latin America, and many are conservative with their investments. Nevertheless, she says, the chance to meet them face to face and develop relationships opens opportunities.•