Portside politics: a Bolivian railroad operator seeks access to the Chilean coast.(Privatization)

Bolivians may finally have access to the sea. Or at least one might.

This month Chile will accept bids from companies interested in operating the port at Arica, a town on the Peruvian border, and one potential Bolivian bidder feels he is the natural candidate to run the port.

"I know that there are large groups in Chile interested in the port, but they possibly don't have the experience and the knowledge that 1 have with Bolivia," says Jose Saavedra Banzer, operator of the FCALP railroad that links Arica and La Paz and nephew of former Bolivian President Hugo Banzer. FCALP is interested in bidding for the port to connect the railroad that links the two countries, yet Saavedra insists he is not looking for private access to the Pacific. "To the contrary, it's a service for the community, for integration and for conveniences," he says. Governments are rarely good port administrators that can keep costs low, Saavedra says.

Chile has earned billions of dollars privatizing ports that dot its coast, giving private operators control of the infrastructure that ships copper, fruit, fish and, of course, wine to the world. Landlocked Bolivia lost access to the Pacific Ocean in the late 1800s to Chile, which seized control of the coast as booty after winning a war against Peru and Bolivia. A 1904 treaty gave Bolivia duty-free access to the port, yet companies have been hesitant to throw down money during a past privatization attempt, since 60% of the traffic is coming from or going to Bolivia.

Competition, too, is stiff, as the northern Chilean ports in Iquique and Mejillones as well as the Peruvian ports of Ilo and Matarani are fighting to take business away from Arica. Iquique was privatized in 1999 and Arica was slated for sate on the same day at the same auction, although technical issues stemming from Bolivia's ties with the port kept investors away, says Patricio Campana, manager of the Arica port authority. "Conditions in the previous concession process made it a little unattractive for probable investors," Camapana says.

Logistics experts hope the port attracts bids as well. Rene Urra, director of the school of logistics at the Universidad del Mar in Arica, says proximity to Bolivia and Peru makes the port important in terms of linking three economies to one another and the world.

"When logistics turn into a business, it turns into a good deal and, today, whoever has dominion and control over the circulation of materials wins," says Urra.

Some from the private sector companies that use the port have suggested that a consortium of Bolivian and Chilean interests should bid for the port, although others point out that, in the end, a large multinational would ultimately control it. "I don't think a Bolivian company could win the auction," says Jorge Rico, a Bolivian transportation operator who uses the port.

Others were not even optimistic that the port would be privatized at all.

"We have read in the Bolivian newspapers that even if the port is auctioned, Ilo is going to offer incentives to get the movement coming its way," says Edmundo Avila, general manager at the Ageneia Naviera Portuaria shipping company. "What bidder is going to want to control Arica if 70% of the cargo is headed for another port?"

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FELIX NUNEZ DUHALDE * ARICA

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