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Puerto Colonet

Baja's Ruffo, weaned in fishing industry, bidding on two major infrastructure projects



July 12, 2007


ENSENADA – Ernesto Ruffo Appel is perhaps best-known as Baja California's former governor or as Mexico's ex-border czar. But since he left the governmental realm, he's been back to business.

Ruffo, 55, who spent his early career in this harbor city's fishing industry, is pursuing two huge, separate infrastructure projects that would solidify an already thriving Baja California from the ground up. If realized, both would further bind the economic futures of the cross-border Californias.

“This is happening because of the enormous need from California,” Ruffo said in a recent interview. “You look at this side and it's kind of a clean slate, and you can draw the map for the roads, the water, the electricity, the houses, the schools.”

Ruffo and his partner, Ensenada businessman Roberto Curiel Amaya, are the only local entrepreneurs competing to develop the much-discussed port and rail project centered at Punta Colonet, 150 miles south of San Diego.

Ernesto Ruffo Appel

Career: Pesquera Zapata, rose from personnel manager to general manager, 1975 -1986; mayor of Ensenada, 1986-89; governor, state of Baja California, 1989-95; commissioner for Northern Border Affairs, 2000-03; Ruffo & Associates, 2003 to present. Has been a member of the Mexican National Chamber of the Fisheries Industry, the Businessmen's Center of Ensenada, the Chamber of the Transformation Industry in Ensenada and the Businessmen's Coordinating Board of Ensenada. Taught at the Center of Technical and Superior Education in Ensenada.

Education: Degree with honorable mention from the Technological Institute of Superior Studies in Monterrey, specializing in finance, economics and federal labor law.

Personal: 55 years old; married to Patricia; children, Ernesto, 30, Veronica, 28, and Marco Antonio, 25.

Hobbies: Plays doubles tennis three times a week.

The $9 billion undertaking, designed to attract Asian goods bound for the U.S. interior, is considered a good business opportunity due to congestion at U.S. ports on the West Coast. Some of the world's top shipping and rail companies are expected to express interest when Mexico opens competitive bidding for construction and operating concessions later this year.

Ruffo offers an approach in which he and Curiel would build and control the port and rail projects.

“We'd be the landlords, and we'd lease it out as long as there are berths available,” he said.

Federal officials have not revealed how they will structure the bid, but they have indicated the government would retain the role of landlord.

Ruffo's other major project is less-publicized: a cargo airport dubbed El Tigre that is 15 miles north of Ensenada, near where Sempra Energy is building its liquefied natural gas complex.

“The nature of the airport is more attached to the needs of Southern California itself,” he said. “Air cargo is limited there.”

Both transportation infrastructure projects – “separate, but linked, naturally, in some respects” – would provide the economic building blocks for further growth in Baja California, leading to industrial and job expansion, Ruffo said.

“The projects would create a better environment for people so they don't have to be jumping the fence. . . . Baja California could become No. 1 in the Mexican union. This state could be bigger than Nuevo Leon,” he said, referring to the urban industrial power center in northeastern Mexico.

A hail of outright and veiled criticism has been directed at Ruffo and his approach to the projects in the Baja California media, most alleging that he's not a large enough player or that he is a spoiler. But few count Ruffo out completely.

“Infrastructure is tough. It's hard to make things go. The projects tend to be very political,” said John McNeece, a San Diego attorney and chairman of the Mexico Business Center at the San Diego Regional Chamber of Commerce. “But it's of importance to the region, so I applaud his interest.”

Ruffo served as a board member of the San Diego Regional Chamber of Commerce in the early 2000s.

“Ruffo has made good contacts on both sides of the border,” McNeece said.

Ruffo claims to have investors from Asia and Europe committed to both Punta Colonet and El Tigre, but he declined to divulge their identities.

His background in the international fishing industry, his leadership position in a state with global business ties and his mastery of multinational relations have gained Ruffo important business and political connections. For example, he counts Mexican President Felipe Calderon among his friends.

A small man with a soft voice and unassuming manner, Ruffo came to Baja California's governorship in 1989 a near-mythical figure. He was the first opposition governor elected in Mexico in six decades, boosted by both his personal popularity and public fatigue with corruption.

University of Texas professor Peter Ward, who co-authored a book on Baja California's political transition under Ruffo, told a reporter several years ago, “When you meet him, you think, 'What a cute little man.' But he is a very canny individual who managed to seize the moment.”

Ruffo, a member of the National Action Party, or PAN, who defeated the ruling Institutional Revolutionary Party, or PRI, curbed rampant government corruption but failed to loosen narco-traffickers' grip on the state.

The state continued to make economic strides, however, most notably drawing maquiladora manufacturing investment from Asia. The state added more than 200 factory operators during his term.

In an interview upon leaving office after serving a term restricted to six years, Ruffo acknowledged limited success on the job.

“It was like going to an unexplored jungle, and taking out your machete and cutting a path because there is no road,” he said.

While his sights today might be set on bigger deals, Ruffo is drawing on his full work experience.

When he worked at Pesquera Zapata, where he rose from personnel manager to general director, he was “just trying to design the best net to catch the fish,” he said. But, because the job required him to fly all around the state, he later was able to identify the El Tigre area as a good site for his cargo airport.

He's bought and leased thousands of acres for the project, which recently gained federal approval as an aerodrome – one without regularly scheduled flights. Now he's ready move to forward with geographic, economic, environmental and land-use studies.

The port and rail effort has not moved as quickly, but Ruffo has taken a greater business and personal stake in that project.

Under the business entity of Infrastructura, he and partner Curiel, a developer with extensive interests in sand, gravel and rock operations, have spent more than $3 million to buy land for the project. Part of the property is tidelands that conceivably would be converted to port activity. And part contains a nearby mountain and rights of way to the beach so rock can be removed from the mountain to build the project.

With container cargo from Asia to the United States growing at about 15 percent annually, the partners' plan is to build 18 berths at the port capable of processing 850,000 TEUs of containerized cargo annually. TEUs, or 20-foot equivalent units, is a standard measure used for international cargo containers.

Instead of running a rail line 180 miles across the Baja California peninsula to cross near Yuma, Ariz., as the federal plan envisions, they'd build a line to El Paso in the state of Chihuahua, where rail crossings into the United States already exist.

“We've been lobbying federal officials so that this vision gets incorporated into the (bid),” Ruffo said. “If they want an open and transparent bidding environment, it has to take in account all proposals.”

Although a dispute with a Baja California business group over the right to minerals at the ocean bottom at the port site has delayed the project for a year and a half, Ruffo thinks the government's move to cancel the mineral group's concession soon will get the port-rail project moving.

Some of his harshest criticism has come from Gabriel Chávez, who until recently controlled the mineral group, Grupo Mineros Lobos. Chávez has alleged that Ruffo is involved in the Puerto Colonet project for personal enrichment.

Other stories have dealt with a riff between Ruffo and current Baja California Gov. Eugenio Elorduy Walther, who was said to have favored Hutchison Port Holdings and Union Pacific as the port-rail project developers. Both of those companies have since let it be known that they no longer are interested in Puerto Colonet.

Ruffo dismisses his critics.

“I'm a businessman by essence. I'm not a politician,” he said. “For many people, it means a lot of money. But I have all my needs met.”

And, he says the project is more important than his role in achieving it.

“I'm in it because I want to win. But I am happy for the project,” he said. “It's something good for everybody.”

Published Thursday, July 12, 2007 5:45 PM by Laura Tierney


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