UNCLAS MANAGUA 001938

SIPDIS

SIPDIS

STATE PLEASE PASS TO USTDA/KMALONEY

E.O. 12958: N/A
TAGS: EAID EAIR ECON EFTA EIND ETRD EWWT NU
SUBJECT: NICARAGUA: USTDA SIGNS GRANTS WITH NATIONAL PORTS
AND AIRPORTS COMPANIES

REF: STATE 140180


1. (U) Summary: USTDA Director for Policy and Programs Geoff
Jackson signed two grants for feasibility studies with
Nicaraguan entities in Managua on August 29. The first was
with the National Ports Company to fund a $430,000
feasibility study on expanding cargo handling facilities and
improving security at the Port of Corinto. The second was
with the International Airports Company to fund a $324,000
feasibility study on designing and constructing a new cargo
terminal at Managua International Airport. Vice President
Alfredo Gomez spoke at the airports signing ceremony along
with the DCM, both of whom emphasized the growing economic
partnership between our two countries under CAFTA. End
Summary.


2. (U) USTDA Director Geoff Jackson and Country Manager Kate
Maloney visited Managua on August 27-30 to finish negotiating
two grant agreements for feasibility studies related to the
expansion of cargo handling capability at the Port of
Corinto, the nation,s largest port, and Managua
International Airport, the nation,s largest airport.
Negotiations were consummated with successful signing
ceremonies on August 29, both of which received generous
press coverage. Speakers emphasized the value of the growing
bilateral and economic relationship between Nicaragua and the
United States under CAFTA.


3. (U) National Ports Board Chairman Alejandro Fiallos used
his meeting with Director Jackson on August 28 to also press
for technical assistance in developing legislation that would
enable the ports company to operate more like a commercial
entity. Currently, no specific law applies to the ports
company, leaving Fiallos to wrestle with general government
procurement law and limitations on funding sources. He would
like his state enterprise to be able to take on financing,
enter into joint ventures with private sector companies, and
grant commercial concessions. Jackson agreed to look into
the possibility of providing technical assistance in this
area.


4. (U) On August 29, Fiallos and Jackson signed a grant
agreement to fund a $430,000 feasibility study that would
recommend alternatives for expanding cargo handling
capability at the port of Corinto. The event attracted the
press, and received extensive coverage in local television
news and newspapers.


5. (U) With a legal framework in place, the National Airports
Company can operate more freely than the ports company.
Board Chairman Lacayo Rappacioli,s runs the company along
commercial lines and this freedom has allowed him to expand
and improve airport facilities. His latest project is to
lengthen Managua International Airport,s runway another 800
meters to give comfort to fuel laden jumbo aircraft requiring
longer runways for takeoff, and to secure airport operations
in case an earthquake ruptures an existing fault a third of
the way along the runway. Airports Executive Director
Alfredo Chamorro is anxious to get started on a new cargo
terminal at Managua International, the primary object of
USTDA,s feasibility study. The study will recommend
construction, equipment, and financing alternatives. Also
included in USTDA,s study will be recommendations for a
modern runway lighting system and equipment to improve
security.


5. (U) The signing ceremony for the $324,000 grant took place
at the proposed site of the new cargo terminal. The event
was well attended and well covered by the press. Vice
President Alfredo Gomez and the DCM signed the grant as
witnesses, and spoke to an audience of about 70 people. Both
emphasized the growing economic partnership between our two
countries under CAFTA. Other attendees included the Minister
of Transportation, Secretaries General for the Departments of
Finance and Trade, Vice Minister of Defense, high level
customs officials as well as representatives from the private
sector.


6. (U) In other meetings with Nicaraguan authorities and the
InterAmerican Development Bank, Director Jackson introduced
USTDA and discussed the prospect of various feasibility
studies for power generation as well as technical assistance
in the areas of power sector regulation and small business
networking.
TRIVELLI