US Officials Warn El Salvador of Negotiating Ports and Island with China

US Officials Warn El Salvador of Negotiating Ports and Island with China

Puerto  Union–Union Port in El Salvador.  A costly project that failed to attract international concessions. Built-in 2010 by President Mauricio Funes the port and nearby islands had no takers until now. The Chinese are interested, causing US concern. Photo: Por Archivo.

No one has shown interest in the huge port El Salvador built 8 years ago to attract international concessions and boost its economy.  To this date, the massive project has cost El Salvador more than $ 200 million. Although the government passed special laws to allow concessions for it in 2011, no company has decided to invest, until now. The Chinese have expressed interest in the area, a move that has triggered warnings by US officials who fear the Chinese would lease the space to establish its own military bases in the Central American region.

The port was built in La Union,  a town sitting in the Gulf of Fonseca; a water space shared with Honduras and Nicaragua. El Salvador declared the port as a special economic zone.

mapa golfo de fonseca
Mapa Golfo de Fonseca. Foto News In America.


US officials warned El Salvador this month that negotiating Ports and Islands with China without consulting with an expert panel could put El Salvador’s sovereignty at risk.

Beijing’s Asia Pacific Xuan Hoa Investment Company (APX)  is currently in discussions with the Port Executive Autonomous Commission of El Salvador (CEPA) with the purpose of negotiating 72.9 hectares of land in the Port of the Union.

The Chinese investment company communicated with the president of CEPA, Nelson Vanegas, as the first step to start the negotiations for a land lease. Formal documents have not yet been submitted.

puerto de la union mapa dibujado
El Salvador Puerto de La Union- Photo: Pinterest


The APX is a manufacturer of specialized technology including optical observation equipment, laser pointer, laser glare series, sound wave series as well private satellite networks and the construction of commando vehicles.

However, Vanegas emphasized that the Beijing company does not seek to use the land or military purposes. El Salvadoran terminals are intended for public operations.

The Minister of Economy, Luz Estrella Rodriguez, reiterated that the government will support APX’s investment plans which are “commercial, productive, and undoubtedly, employment-generating for the people of El Salvador.” Rodriguez emphasized that there is no reason for questioning the company’s motives for investing in El Salvador.

puerto de la union empresa china
Empresa China de tecnología militar busca sitio en La Unión – Periódico Digital 102 Nueve

CEPA, the Autonomous Port Executive Commission, is also paying $ 10 million for a loan taken through the Japan Bank for International Cooperation (JBIC) to help maintain the facilities.

United States Government Officials expressed concern over how the Salvadoran government will oversee concessions of the Port of the Union in a way that promotes that country’s development without risking is sovereignty.

“We are not against El Salvador’s investment of its country, specifically in the East, which needs more development, but investments should be carried out according to the terms that El Salvador and the Salvadorans want, not by the decisions of a small group, a particular company or a foreign country,” said an official US source to the press in El Salvador.

The officials spoke on the condition of not being identified expressing their concern that negotiations are being held without an independent or specialized authority on these issues, a process that could compromise El Salvador’s sovereignty.

puerto union 1
Photo: Diario La Pagina


“What interest does Beijing have in the islands? We have spoken with Salvadoran experts who tell us that the islands have no tourist or commercial use,” US officials stated.

The fear is that territory will be handed over for many years and El Salvador will be compromised. They mentioned the experiences of Greece and Sri Lanka that ended up delivering ports and other areas in payment for credits that they could not pay.

If military bases are eventually installed, and El Salvador becomes indebted,  who would own the rights and the purposes for this land?

For their part, El Salvador’s ARENA political party expressed their own concerns: “We want transparency and unfortunately we have seen that this has not been the case, and everything has been done behind the people’s back. We want to know why the meeting with the President of CEPA was never made known and what is really going to happen with this company in our country. “

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