Ending decades of isolation, the Obama Administration in 2014 announced its intention to re-establish diplomatic relations and embark on a process of normalization with Cuba. The effort has resulted in several recent significant events: In February 2016, the United States and Cuba signed an agreement that provides for re-establishment of scheduled air services between the two countries. U.S. carriers have an opportunity to operate as many as 110 daily roundtrip flights between the United States and Cuba. And, on March 20, 2016, President Obama became the first U.S. president in 88 years to visit Cuba.
Normalizing relations between the two countries will potentially lead to increased trade and tourist travel to Cuba and, subsequently, to a need for greater investment in upgrading and updating the nation’s infrastructure. One company closely following these developments is Morristown, N.J.-based Louis Berger, a global, multidisciplinary infrastructure and development services firm with a regional headquarters office in Panama City, Panama, as well as offices in Chile, Mexico, Peru, and Columbia. The firm has been active in the region since the 1960s and has worked in every independent country in the area. Its work has centered on heavy infrastructure, primarily transportation infrastructure — roads, bridges, ports, airports — but also has included work in water and wastewater infrastructure, as well as environmental, energy, and other areas.
Following participation in a trade mission to Cuba in late 2015, Sofia Berger, vice president in charge of Latin America and the Caribbean region at Louis Berger, offered her perspective on engineering and infrastructure needs and opportunities in Cuba.
Civil + Structural Engineer (C+S): You recently participated in a trade mission to Cuba organized by the Transportation Diversity Council. Tell us about that and your greatest impressions from the mission.
Berger: The Transportation Diversity Council is a group out of the New York area that Louis Berger has been involved with quite a bit that looks at how to bring more people and more diversity into the transportation industry. It is a group that includes people representing different areas. There are private-sector players like ourselves, but then there are quite a few people who represent different sorts of [non-governmental organizations] (NGOs) — whether it’s schools that provide training in engineering or other construction-related industries or transportation-related industries — and a large segment of people who are from different transit agencies. The group that went [to Cuba] had representatives from various transit agencies, as well as some of the NGOs that are involved, and private-sector players such as ourselves.
This was really an exploratory trip to understand better what is going on there and what we can do to work together better in the future. Are there areas where there are some sort of commonalities or areas where maybe we have best practices that we can share? Or maybe there are things that we can learn from them. There’s not tons of information that you can get from outside of Cuba about their transportation industry, so really it was more of a fact-finding, exploratory mission.
C+S: As relations continue to warm between the two countries, and trade and tourism increase, what are the greatest infrastructure needs in Cuba?
Berger: From an infrastructure point of view, sometimes there’s a perception that you’re going to find everything crumbling when you get there and that they have no existing infrastructure. I have to say that I was pleasantly surprised by what I saw. That’s not to say that there are not needs, but I think that once you’re there, there are several things that are really great. The road network, I thought, was really well managed. I think there are a lot of areas where they are doing a really great job.
In terms of areas where I think there’s need, especially with all of the tourism that’s expected, it’s definitely the points of entry, particularly the airports and ports. The main airport in Havana is the Jose Marti Airport and there’s already a major contract underway to expand and renovate that airport. I think they’re going to need more than what that contract currently offers.
The same on the ports area as well. They’re expecting a huge amount of cruise traffic with cruise ships coming in particularly from Florida and other nearby areas. That will be a great boon to their economy but they also need to make sure that they have the proper infrastructure in place in order to receive all of those cruise ships.
C+S: What are some of the greatest obstacles to infrastructure development in Cuba?
Berger: Some of the obstacles are the same as any place. Money, right? Everybody needs money to make these projects happen. More than anything, it’s really going to be about how the Cuban government wants to approach this and how they want to accept foreign direct investment for these types of projects and under what scheme. That’s going to be a very political decision, particularly between them and the U.S. as more companies and more sources of funding become interested in Cuba. That’s something largely out of [our] control.
More in my sector, in terms of what are some of the barriers, I think that they have an excellent engineering school in Cuba. The caliber of engineers that you can get in Cuba is very strong. However, those engineers haven’t really been working outside of Cuba as much. They haven’t been exposed to some of the new practices or best practices. This is a broad-brush comment that I’m making, so it’s not true necessarily in every sector. But I think there’s a lot of exchange of engineering best practices that can happen so that as they pursue these new infrastructure needs, they’re bringing some of the new technologies to bear. That is something that can be really helpful. Greater collaboration between different international companies and the existing Cuban engineering companies can bring a lot of benefit.
One thing I found very interesting is when the Cuban government talked about the necessary infrastructure, their decisions are still driven by what is the social impact to their people. That continues to be a very important thing for the government that aligns with their interests in government and how they want to manage these. So as they look at the infrastructure needs, it’s not just going to be about where they get the money and where they get the resources, but what is the value that it’s going to bring to the people of Cuba. That continues to be important to them. All companies and investment agencies that are interested in doing work there should keep that in mind that there should be a social justification as to why this project has value, has merit.
C+S: Being an island nation, do you see any emphasis on the environment or sustainability issues as they build?
Berger: I do. I think that environmental issues are a big topic for them. For example, they are going to need a substantial amount of tourism capacity — hotels and things like that — for all the people that are going to be coming. There are some very practical concerns that go along with that that relate to the environment, such as where is the wastewater going to go from these new tourism facilities? Where is the energy going to come from?
Just to speak about energy because I think that’s an interesting topic as an island nation, so far, a huge amount of their energy has been coming from oil — either the oil they have or oil that they got from Venezuela. I saw an active interest in looking to diversify those sources of energy, particularly toward the renewable space.
C+S: Does there seem to be a willingness on the part of the Cuban government to seek or accept technical assistance from U.S. engineering firms?
Berger: Yes, I think so, definitely. We’ve already started talking to some of the universities there to see if maybe there were some sort of visiting experts or exchange programs or something like that we can start putting into place. It’s still very early in that conversation, but there definitely is a willingness and interest there.
C+S: In what ways do you anticipate U.S. civil and structural engineering firms can initially work in Cuba, with the Cuban government or other infrastructure owners, and collaborate with Cuban engineering firms?
Berger: I definitely think — and, I think, legally this is even required — in order to get into the local industry you have to start by partnering with existing companies. They can be other foreign companies that are already present there, but you have to start under a partnership or a subcontractor model, which is absolutely fine with us. It’s something that will help get people used to the Cuban market, which will be a new market for all of us. That level of collaboration and the willingness to collaborate will be key for anyone who’s interested in going into that market.
For companies like Louis Berger, there’s also a lot of unanswered questions and a lot of doubts about how exactly the regulatory environment is going to develop between the U.S. and Cuba. We are very excited about the Cuban market and we are starting to look at how we can jump in and be helpful, but we also recognize that it’s going to take time to work out the regulatory issues. We certainly want to make sure that we’re coloring within the lines and operating in a way that is acceptable to both governments.
C+S: With Louis Berger’s experience in the region, do you see Cuba as all that much different than the other countries you’ve been involved in, in terms of how to work and their needs and engineering environment?
Berger: Every country has its own peculiarities and their own pace and their own style of doing things, so it’s very easy for me to answer your question, yes, that I see it being different. But the more kind of nuanced answer is, we’ve been in the region for the last 50 years, and we’ve worked in almost every country in the region, but we haven’t stepped foot in Cuba since the ’50s. We do have a really old project that we did before the embargo started. I think it was a ferry service from Florida to Cuba. Frankly, nobody who’s still at Berger really remembers any details of what that was or how it was done. It’s very unusual that all of a sudden a country just becomes available.
Let me give you a contrasting example. We haven’t been active in Argentina for the last couple years at all because it was a difficult climate for us to work in. But before then — not that long ago — we had a huge amount of work in Argentina. They recently had elections. We think there is a good possibility we could go back there, but I have a lot of built-in history within the company: How do you do work there? What are the partners? Who can we go talk to? Who do we know there? Whereas in Cuba, it’s literally starting from scratch.
C+S: When you would go into another country in the region, would you typically hire, eventually, staff with local engineers? Is that your goal?
Berger: Absolutely. In the way that we like to do business, we like to have local staff and also technology transfer is a huge part of how we operate around the world as Louis Berger. So the goal is always to try and have more and more local staff. But also, at the beginning when you’re going into a country, it’s absolutely the best thing because there’s so much to learn about how things are done locally. What are the local standards? What are the local construction methods? What are the geotechnical concerns? I mean, there are a million questions that having a local staff and local knowledge is always going to be best.
Usually what you have to do is complement that with people who know the way that we’ve done things around the world so you can complement the two sources of knowledge together.