El Salvador´s transportation infrastructure - by air, sea and land – offers another competitive advantage. The International Airport, a 30-minute drive from the capital city, is the most modern in the region and one of the best in Latin America. The airport offers connections around the globe and is equipped to handle approximately 2.5 million passengers a year. Currently it handles traffic of 1.8 million passengers and 25,000 commercial flights a year.
For most investors and for all distribution and logistics centers, an effective road system in good condition, connecting the entire territory and also the main custom posts on the frontiers with neighboring nations is extremely important.
El Salvador has approximately 3,000 kilometers of paved roads in very good condition, (highways, as well as primary and secondary roads), thanks to the permanent maintenance given by the Ministry of Public Works through its program, FOVIAL.
El Salvador offers two important commercial sea ports for the region; Puerto Acajutla, located 69 miles from the capital city of San Salvador and Puerto La Unión, at the eastern end of the territory, in the Gulf of Fonseca. Puerto La Union will be a deep-sea port ready in 2007 and will be the region’s most modern and functional port.
The scope, capacity and state of the art telecommunications infrastructure make up another valuable element favoring El Salvador’s business and investment atmosphere. Multinational corporations such as America Móvil (Mexico), Telefonica (Spain), Millicom (Sweden), Sprint and AT&T, have established operations in the country and offer modern technologies applied to telecommunications infrastructure, such as optic fiber cable and access to digital switching, multiplex telephone system lines and call administrators, building to building lines, video conferencing, alternative routes and disaster recovery routes.
- Airport
- Ports
- Customs
- Electricity
- Highway System
- Telecomunications
El Salvador’s International Airport, one of the most modern airports in Latin America, is the jewel of infrastructure for transportation in El Salvador. Its construction began in 1976 and started operating in 1980. It is located 25 miles from the capital city of San Salvador. The former International Airport at Ilopango, with a 1.4 miles runway, is used nowadays for military and private civilian aircraft, but is currently being considered for development as a regional cargo-handling center.
Industrial goods move from El Salvador to major US ports in 5 days.
Puerto Acajutla is El Salvador’s major cargo seaport. Plans are underway to expand and modernize it; additionally industrial operations make use of Santo Tomas de Castilla and Puerto Quetzal in Guatemala and Puerto Cortés in Honduras.
The construction of the most modern deep seaport in the region, Puerto La Union, will further enhance the country’s openness and competitiveness in the region (completion expected in 2009).
The government has substantially simplified customs procedures in recent years. A new system implemented in 1998, called “Teledespacho”, allows importers and exporters to send their commercial invoices, bills and airway bills through an electronic link to the Salvadoran customs officer for processing. This system allows merchandise to clear customs seven days a week. The Salvadoran government also has an “Autoliquidation” process that allows assessment and payment of duties directly by the importer, without physical inspection in most cases.
El Salvador's tariff liberalization and customs modernization programs have encouraged growth in commerce and the manufacturing sector. In keeping with its WTO commitments, El Salvador gradually, yet dramatically, reduced import duties for final and intermediate goods from up to 300 percent ad-valorem in 1990, to a range of 5 to 15 percent by 1999. In 1995, import tariffs on capital goods and raw materials were reduced to zero. This last measure reinvigorated manufacturing reducing the sector's total costs of production and thereby making it more competitive. At the same time, the customs modernization program (1995-98) automated customs procedures and cut the red tape associated with clearing import/export merchandise by reducing the number of steps from 18 to 4.
Electricity is one of the leading and most developed sectors in the Salvadoran infrastructure system. During the last eight years, the country has pursued the most liberal energy policy among the Central American countries. The country is open to, and welcomes, the private production and distribution of electricity. Five formerly government-run distribution companies were sold to private investors in 1998: AES Corp. (USA), Emel S.A. (Chile), Pennsylvania Power & Light, and Electricidad de Caracas (Venezuela).
Three thermal generation plants, with a combined production capacity of nearly 300 Mw. were sold in 1999. Today, approximately 30 percent of the country’s total generation capacity is in private hands.
Tariffs for general use are US$0.08 cents per Kwh for industrial and commercial service and between US$0.08 - $0.16 cents per Kwh for domestic service, depending on energy demand ranges.
Privately-owned generating plants, such as Coastal Technology’s Nejapa project and an IDB-sponsored interconnection with Honduras’ electrical grid, were implemented to lessen the probability of electricity shortages in the past. Coastal Technology has also invested in a petroleum products terminal, with offshore pipelines and unloading facilities, in Puerto Acajutla.
In 1999 El Salvador had 2,000 kilometers of paved roads; as of December 2004 there were more than 3,000 kilometers, including the Panamerican Highway. The main cities, airport and ports are connected by paved highways. The side roads are generally accessible all year long.
Substantial investment is being made for the construction and maintenance of rural roads, highways, bridges and urban streets and overpasses. More than 250 kilometers of main highways that connect El Salvador with Honduras and Guatemala have been constructed since 2002. The Fund for the Maintenance of Roads (Fondo de Conservación Vial) has repaired more than 370 kilometers of roads and provides road maintenance all year long.
El Salvador’s modern telecommunications network is a leading sector in the Salvadoran infrastructure system. The growth of the telecommunication sector was specially spurred by the privatization of ANTEL, the former public telecommunications institution, which was sold in 1998 as two separate companies (a fixed wire firm and a wireless firm). As a result of privatization, 51% of the fixed-wire company’s shares were sold to France Telecom, and 51% of the wireless firm’s shares were sold to Telefónica of Spain.
By the end of the first semester 2004, there were 1,369,367 mobile lines and 805,065 fixed lines, due to a quick response by private industry to growing business needs in the country.
Today direct dialing, cellular service, high-speed Internet, fax, and telex services are widely available in El Salvador, allowing Salvadorans to communicate to most countries in the world. International phone services in El Salvador include AT&T, Sprint and MCI.