Trade and Commercial Law Assessment - Honduras - Economic ...

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
XV. SUPPORTING INFRASTRUCTURE
A. I NTRODUCTION
Infrastructure is an important component of a well-developed trading community. Without it, a
region would find it impossible to participate in the world of international trade. Thus,
implementation of a highly efficient, user-friendly infrastructure system, offering cost-effective
and reliable services, is easily recognized as a competitive advantage. In a broader context, there
is a direct link between economic
growth and infrastructure quality. Implementation and
administration of a high-quality infrastructure system reduces costs, expands market reach, and
induce s demand for increased services. Within the context of CAFTA and its participating
countries,
regional competitiveness is an emerging theme, with infrastructure playing an
important
role.
Honduras’s stock of trade infrastructure presents two pictures, depending on one’s perspective
within the country. Honduras enjoys two primary production/consumption zones: one located
within the nation’s capital, Tegucigalpa; the other along the nation’s Atlantic coast at Puerto
Cortez/ San Pedro Sula. These locations present a stark contrast to each other with regard to
installed capacity, infrastructure quality, and overall effectiveness. Installed
infrastructure in the
Tegucigalpa consumption/production zone suffers from capacity constraints and poor service
quality, ult imately hurting the nation’s
overall competitiveness. In contrast, installed
infrastructure
within the Puerto Cortez/San Pedro Sula consumption/production zone benefits
from relatively thoughtful planning and targeted investment,
providing a comparatively solid
competitive environment. That said, it is important to note that the nation’s overall stock of trade
infrastructure suffers from organizational issues that prevail across the nation. These issues
include
a high level of direct government involvement in implementing and operating many of
the nation’s key infrastructure components.
Road differences in capabilities and service levels exist between the various infrastructure
components and within individual sectors. Exhibit 1 presents a summary assessment and key
findings for Honduras’s individual infrastructure components.
Infrastructure Overall
Component Assessment
Roadways Less
Competitive
Exhibit 1. Summary Infrastructure Assessment Findings
Key Positive Aspects Key Negative Aspects
• User fee–based
maintenance program
• Strategic planning initiatives
for key transportation
corridors
• Pavement systems in
generally good condition
• High capacity corridor at
San Pedro Sula
• Increasing incorporation of
safety considerations within
cross-section design
• Ability to secure foreign
financing for major projects
XV-1
• Incomplete allocation of maintenance
funds
• Under capacity along key corridors
• Dense traffic conditions within city limits
• Under capacity overpasses and bridge
structures
• Incomplete network upgrades