March 3rd, 2011

"The Western Gate" Railway Project in Colombia

As an active company in strategic consulting services to the Colombian government GCD is delighted to inform that the Colombian government has decided to reconstruct the national railways system with a strategic decision to reinforce the commercial relations with China and the Far East countries. Colombia is one of worlds richest countries in minerals and is planning, via the railways project, to bring to China and other Far East countries millions of tons of various minerals. GCD operates as the developing company of the major railway project in Colombia known as the Western Gate Project.

Global Group: DescriptionGlobal Group (which GCD is part of) involves itself with projects at the national forefront, including infrastructure and other economy-enhancing ventures. Founded five years ago by Major General (R) Israel Ziv and associated partners such as Prof. Shlomo Ben Any (former Israeli Foreign Minister), Dr. Efraim Sneh (former Israeli Minister of Health) as well as other Israeli and international senior political figures. The Group has since played an active role in areas such as South America, Africa, and Eastern Europe, carrying out both security and commercial large-scale projects.

Colombia: A Country on the Rise Colombias geographic location and its geo-strategic position it as one of the most important countries in South America. In recent years, Colombia has made a giant leap forward on virtually every possible account - and is now viewed by many as South America's most promising destination for investment: its relations with neighboring countries have deepened and strengthened; the crime and terror index has declined to negligible levels; there is a significant rise in foreign investment flows; and the democratic system shows remarkable stability and efficiency. An extensive article published recently in Newsweek magazine attributed Colombia with the title, "The Shining Star of the South" ascribing the country with impressive standards of progress.

Enhancing Colombia's Economic ProsperityThe major force behind this wind of change, providing an imperative tail wind, is Colombia itself. In various occasions, both in person and publicly, the President himself has explicitly highlighted the need to pursue business opportunities with strong potential to serve as engine growths for the enhancement of economic prosperity, and has promised to prove his commitment

by designating these endeavors a status of National Priority a decision that holds bureaucratic and financial benefits that expedite execution. Global Group has played, and continues to play, a significant role in assisting the President and his administration in recognizing business ventures with such potential. From initiating projects and attracting investors, to designing concepts and leading project committees on various topics, the company is deeply involved with Colombian national projects.

"Western Gate": The Main IdeaFor years, the lack of connectivity in the railway system and seaports has lead to a bottleneck effect hindering development of the national economy. Specifically, coal and other minerals with high export potential were not fully realized, leaving the main national economic engines underdeveloped. With the understanding that major world demand is emerging from the Far East and that railway and port construction/rehabilitation projects may serve as a great incentive for social and economic growth, Global Group realized the opportunity of developing a renewed and improved national railway system.The goal of the "Western Gate" project is twofold:A. To upgrade the national railway system in order to enable economic growth for Colombia via exports (namely coal and other minerals at high demand). B. To create a strategic change for Colombian exports facing the Eastern hemisphere by using the Pacific Ocean.

Project DescriptionThe project includes the rebuilding and construction of 791 km of railroad, including expansion and improvement works on a suitable port on the country's West coast. China Railways has been selected as the project's main contractor, and will carry out all planning and construction works.

In the future, the project is expected to extend and promote other initiatives such as the development of mining areas and constructing suitable logistics zones.The project has been estimated at $7.6 billion.

Project FrameworkThe general framework for accomplishing this project is employed through a Colombian-Chinese Government-to-Government Agreement (G2G). The involvement of both governments should help secure the investment by overcoming financial barriers in the form of security deposits and bonds. In order to ensure the financial aspect is fully carried out and receives special attention, all parties - including an inter-ministerial committee appointed by the Colombian President (and comprised of delegates from the various ministries involved) - have agreed to establish a certain process to circumvent regular bureaucratic measures that have hindered similar efforts in the past. This will, hopefully, pave a clear path for quick implementation and successful results.

National Benefits for Colombia Reduction of interior transportation costs the development and upgrading of railways allows not only for mobilization solutions within the country, but also for easier access to and from the region. The economic implications that are deduced from the abovementioned point are clear: Colombian commodities and other goods would arrive easily and at lower prices to China, India and other countries in the pacific region. Furthermore, the quantities exported to these countries and others would rise dramatically fulfilling the President's vision to enhance economic prosperity in the country. Employment the effect of creating thousand of new jobs is tremendous and well-appreciated. Strengthening diplomatic relations through the G2G agreement, which includes the involvement and active support of China, this type of partnership might mark an important cornerstone to future cooperation on other mutual endeavors to follow.

ConclusionAfter several discussions with President Santos and the relevant ministers, we are now certain that all parties involved are united in the understanding that the potential of this project is unordinary, and could very well signify a turning point in the development of the region and its desired economic enhancement.