Guatemalan Businesses Lament Economic Losses Caused By Highway Sinkhole

Guatemala City — A sinkhole on a major Guatemalan highway is delaying the movement of freight and causing serious economic losses, according to the country’s food and beverages chamber (CGAB).

The hole opened up eight days ago at the kilometer 15 point of the CA-9 highway, which leads to the Pacific coast, and is causing delays of up to eight hours for traffic, and along which some 900 container trucks pass daily, leading to freight cost overruns as drivers are forced to reroute.

Fanny D. Estrada, director of institutional relations of the Guatemalan Association of Exporters (Agexport), said that import and exports via land transportation total around $14 million per day, while exports by sea total $28 million per day, as Quetzal port alone moves 45% of the country’s maritime cargo in terms of tonnage, while imports by sea are estimated at around $52 million.

The continued blockage of the highway due to the sinkhole threatens to jeopardize those import and export revenues.

CGAB’s executive director Enrique Lacs told Bloomberg Línea that the condition of highways due to the rains is also causing significant delays to freight traffic due to the fact that many factories are located in the capital’s metropolitan area and move cargo to the west coast, and because factories in Escuintla, Sacatepéquez and other municipalities use the highway for the shipment of raw materials.

The sinkhole is causing delays to exports, he added, as goods imported and exported to and from Mexico and El Salvador use the route.

In addition to the sinkhole, a landslide at kilometer 24 of the Pan-American Highway, in Mixco, occurred at the weekend, while bridges have been damaged by the first rains of the season. According to the country’s disaster response network (Conred), such issues have affected more than one million people.

‘Efficient use of resources’

Luis Alfonso Bosch, president of Guatemala’s Chamber of Industry (CIG), told Bloomberg Línea that rainfall in the country exceeded normal winter levels this year, and which has put the country’s road infrastructure to the test.

This has caused saturation in soils, flooding in rivers and leaks in pipelines, among other effects, causing damage to road infrastructure.

“It is important to emphasize that for the road network to have profound and long-term improvements, it is necessary to change the contracting model for one that favors more efficiency, competition, and a guarantee of efficient use of resources,” Bosch said.

Guatemala’s Congress recently approved more than $400 million for the maintenance of the country’s road network.

However, the sinkhole and landslide have resulted in a closing of the route to the Pacific coast.

According to Bosch, the situation is having a direct impact on the country’s competitiveness and economic development, in terms of road connectivity and the logistics supply chain.

The interruption or delay of the latter can cause shortages, additional costs and even losses in perishable products that must reach their destination in a limited time or risks breaching contracts, he said.

In addition,” thousands of workers are having difficulty reaching their jobs and returning home after their working day, and which impacts productivity and the mental health of the affected population,” Bosch said.

The CIG has urged Guatemalan authorities “to work hard to enable all routes to be reopened as soon as possible and to execute the funds approved to restore the country’s road network, in order to improve the country’s competitiveness and economic development”.

Government requests US military support

Members of the Chamber of Central American Freight Transporters (Catransca) state that commercial transportation in Guatemala is one of the motors of the country’s economy, moving Guatemalan products for local consumption and export, as well as transporting imported goods, and have called on the government to solve the problems affecting road infrastructure, as well as structural problems in ports and at customs.

“The transport union can no longer tolerate so much neglect, the imposition of sanctions, regulations, penalties, restrictions, informality, very high prices of goods and serices, among other situations,” Catransca said in a statement.

Guatemala’s Communications Ministry has announced that help has been sought from the Southern Command of the US military to fix the sinkhole, and US Army engineers inspected the site on June 21 in order to assist with the required earthworks.

Heavy rains

The 2022 wet season has so far affected more than 900,000 people, according to Conred figures.

Conred spokesperson Rodolfo García said that, between April and June, 539 incidents were reported relating to rains, with 72 in a 72-hour period alone.

In addition to the rains, Guatemala has also suffered strong winds, flooding, structural collapses and landslides.

Translated from the Spanish by Adam Critchley