Guatemala is the most northern and western of the CAFTA states, bordered by Mexico to the northwest, by Belize to the east, on the southeast by Honduras and El Salvador. It is bordered to the south by the Pacific Ocean and to the north by the Atlantic Ocean. Its total land area of 42,042 square miles makes it approximately the size of Connecticut and the third largest nation in the region, after Nicaragua and Honduras. The nation extends approximately 270 miles from east to west and 280 miles to the north to south at its widest points.
Overall, Guatemala’s portfolio of trade infrastructure sufficiently meets the existing demands of the marketplace. Individual infrastructure components are generally well maintained and in reasonably good condition. Both recent improvements and contemplated transportation projects employ industry best practices in design and construction. However, broad differences in capabilities and service levels exist between the various components, as noted by the overall findings, according to the following definitions:
- Highly Competitive. Deployed infrastructure systems exhibit high quality in both fixed assets and operations, are uniformly deployed nationally, and have significant opportunities for growth.
- Competitive. Deployed infrastructure systems adequately meet market demands, may exhibit potential inconsistencies nationally, and have opportunities to maintain service levels over time through thoughtful capital planning and implementation.
- Less Competitive. Deployed infrastructure systems currently suffer from problems inhibiting efficient trade.
- Developing. Infrastructure systems have only recently been deployed, providing very limited existing service capabilities and consequently are immeasurable.
Guatemala has experienced consistent success in implementing its infrastructure investment program. The country does not suffer from significant bottlenecks or service gaps from a national perspective. However, initiatives targeted to create a seamless infrastructure environment is required going forward.
Specifically, Guatemala should focus its efforts on the following areas.
a. Roadways
Guatemala’s roadway infrastructure has seen significant improvement in recent years. This is evidenced through recent development of four-lane divided highways and private toll roads located toward the south of Guatemala City. Overall, Guatemala’s primary roadway system is in good condition, providing good access to major destinations. However, the nation’s roadway network suffers from inconsistent capacity development along heavily traveled ways. Of particular importance is the nation’s highway capacity between Guatemala City and the Caribbean coastal ports of Barrios and Santo Tomas, which is currently a two-lane road traversing mountainous terrain, limiting free flow of goods. This constraint increases transit times with corresponding costs negatively affecting the nation’s competitive position. Second, Guatemala must consider development of highway bypass corridors around major population centers. Currently, the nation’s road network requires most all-waterborne traffic to transit Guatemala City, detrimentally increasing traffic congestion within the population center. Development of bypass corridors will greatly improve overall transit times around population centers, reducing costs, improving reliability, creating opportunities for industry development along the corridor, and improving the attractiveness of the nation as an industrial trading center. Third, Guatemala’s portfolio of overpasses and bridge structures suffers from bearing capacity constraints, limiting passage of high-capacity truckloads. Improvement in this area along key freight corridors will reduce transit costs and truck traffic counts, saving labor requirements. Lastly, Guatemala must proactively implement highway security measures to eliminate loss of valuable cargo to highway piracy. Near-term measures should include eliminating any bottlenecks and vehicle slowdown areas and may include developing strategically positioned secure zones for vehicle parking and increased security patrols along the nation’s corridors.
b. Seaports
Guatemala has experienced recent success in privatization initiatives at the nation’s seaports. These initiatives have enabled the nation to deploy efficient cargo-handling equipment, providing an attractive cost-savings measure for ocean carriers. In addition, the nation’s facilities operate within a highly secure environment, recently implemented and International Ship and Port Security (ISPS) certified. Puerto Quetzal represents a model example for port operations within the region. However, the nation’s port infrastructure suffers from key deficiencies along the Atlantic Coast. Landside access is a key improvement area, particularly along the primary highway corridor to Guatemala City and the local road networks providing direct access to the two ports. In addition, the Atlantic facilities are approaching the limits of their operational capacities, necessitating expansion and modernization. Consideration and development of port terminals dedicated to specific cargo types would greatly improve the service characteristics of the nation’s port infrastructure, creating attractiveness for shippers and carriers. Lastly, the nation’s primary ports operate under distinctly different organizational structures, ranging from Government-owned and -operated facilities to fully private port authorities. These differing structures create inconsistencies in service characteristics among the facilities. Efforts to improve overall service should include implementing organizational characteristics to model industry best practices providing opportunities to uniformly meet the expectations of the nation’s customers.
c. Airports
Guatemala’s airport infrastructure is reaching the end of its useful life, particularly at La Aurora International Airport, the nation’s predominant air traffic gateway. The facility is best described as mature, having significant constraints to accommodate larger aircraft and with little opportunity for growth because of its proximity to Guatemala City and corresponding land constraints. Guatemala has and should continue to consider developing a modern airport facility located outside the city.
d. Railroads
Guatemala’s railroad infrastructure, although a historical component of the nation’s transportation network, is currently in its infancy. The facilities were recently privatized and are currently operating at a very small scale. Considering that the economics of rail transportation are best realized through length of haul, Guatemala should evaluate its rail infrastructure in conjunction with that of its neighboring nations to realize its full potential. Support in this area is key to providing a regional transportation program that would benefit both Guatemala and the region as a whole.
e. Border Crossings
Guatemala’s border crossings have seen little to no investment in recent years because the concept of Customs Union incorporates that customs facilities at border crossings within the region will eventually disappear. Consequently, the facilities are falling into disrepair and suffer from bottlenecks due to traffic congestion. Currently, the facilities are not equipped with sufficient truck queuing facilities to accommodate both in-transit and trouble vehicles. Near-term development of sufficient parking facilities located proximate to the border crossings and enforcement of parking regulations would greatly improve overall service characteristics, reducing downtime while providing cost savings to compliant trucking companies. In addition, border crossings suffer from unreliable computerized communications equipment, which form the backbone of cross-border data transfer to and from neighboring countries. Improvement in this area will improve overall reliability and service levels at the border crossings.
