Overbuilding of Commercial Space
Worries Experts
The
financial weekly newspaper El
Financiero reports that the Gran
Área Metropolitana (GAM) - the
San José Metropolitan Area - is
at capacity cannot sustain any
new commercial development. The
"boom" of commercial development
of the last three years has left
the market saturated.
In the last three years, there
have 21 commercial centres added
to the market place that
included malls and large
department stores like the "Hypermas".
Investment in commercial centres
is estimated to be more than
us$150 million dollars since
2001. From Cartago to Heredia
and now in San Ramón, shopping
centres, strip malls and
commercial units have been built
and continue to be built
everywhere.
Where malls were once the domain
of only San José, now Alajuela,
Heredia, Cartago all have their
own shopping malls. San Ramón,
west of San José has it's
first mall under construction.
And the first ever enclosed mall
outside of the Central Valley
was built in Liberia. Places
likes Jacó and Guapiles have
their mini malls.
Large supermarkets and
department stores are cropping
up everywhere. Hypermas, the
large department store that also
includes the Mas x Menos food
stores has sprouted with stores
in key areas East, South and
North of San José, while it
still struggles to fix the
constructions problems of it's
West store, located in Escazú.
That building was almost ready
18 months ago, when a problem
with a retaining wall meant the
postponed of the opening and is
still under construction as
engineers try to solve the
problem.
Aliss is another department
store that has appeared in the
market in the last couple of
years. Pricesmart, with it's
club shopping has been a big hit
with locals and foreigners
alike. Office Depot has two
large "business" stores. Heredia
now has the Paseo de las Flores
mall, Multiplaza added the
Multiplaza Este in zapote and
Terramall in San Francisco de
Tres Rios.
The reason for this rapid growth
is the increased purchasing
power of Costa Ricans, which is
expected to remain this year at
the same level of last years and
increase demand for more
shopping centres.
Another factor is the increased
availability of lands for
commercial purposes, allowing
municipalities to increase their
tax base and add revenues to
their balance sheets.
The question asked by experts is
when will this stop? The market
is nearing it's saturation point
and prices for commercial space
will begin to fall drastically
if the over-construction
continues. Also, experts fear
that the infrastructure to
support the increased
development is not in place and
a collapse is imminent.
The overbuilding is commercial
space is already showing
'cannibalism" among some
retailers as they slash prices
to attract customers. Other
retailers have had to open
competing stores close to each
other to stay out the
competition. A case in point is
the short distance between El
Cruce de San Rafael de Escazú
and Multiplaza, where in the
less than a 3km driving distance
you can find 4 Fischel drug
stores. Two are less than 500
metres apart.
Market experts believe that for
the current situation of
continued development is not
sustainable unless two things
happen: a better tax collection
process is in place and
inflation is kept under 10%.
Experts believe these will not
happen as we are in an election
year and the price of oil on
international markets continue
to rise putting more pressure on
inflation.
Thieves Steal Telephone Cables
And Equipment
Thieves have
gotten so desperate to feed
their habit and wreak havoc on
society that have no taken to
stealing telephone cables. While
they are still attached to the
posts and in use.
The Instituto Costarricense de
Electricidad (ICE) is worried at
this latest occurrence that
happened on Sunday night, when
900 telephone customers in
Hatillo 2, south of San José,
were left without telephone
service because a group of "anti
socials" decided to steal the
telephone wires.
Service was restored by 7pm
Monday, as ICE work crews worked
around the clock to replace the
stolen cables and re-connect the
service.
ICE officials say the believe
that the thieves had no special
used for the cable, but the PVC
tubing that encloses the cables
are valuable and can be sold to
purchase drugs.
In unrelated events, ICE also
reports that thousands of GSM
cellular customers have had
their service affected in the
last months due to the theft of
key pieces of equipment in eight
antennas used in the GSM
network, southeast of San José,
though they wouldn't be specific
to the location of the tower or
towers.
ICE officials say that vandals
removed cables and electronic
cards that connect cellular
telephone service to the land
lines from towers that are as
high as 50 metres, that have
cost the institution some ¢61.5
million colones (us$132.000
dollars) in calls that it cannot
bill, that is more than
2.000.000 calls at ¢30 colones
each.
The areas of Zapote, San
Francisco de Dos Rios,
Curridabat and San Antonio de
Desamparados areas were the most
affected by the theft of the
equipment. The theft did not
affect the older cellular
service known as TDMA.
Cellular Network Saturated On
Valentine's Day!
Cellular customers yesterday
morning were left scratching
their heads as to why their
calls were not getting through.
And the answer was simple:
Valentine's Day!
The Instituto Costarricense de
Electricidad (ICE) reports that
it's cellular network was
saturated in the early hours of
yesterday morning as more than
300.000 SMS - short text
messages - per hour were sent
over the network. Both the GSM
and TDMA networks were affected.
The problems, according to ICE
reports, began around 8am and
continued throughout the day as
cellular subscribers sent their
messages to lovers and friends.
A special crew was assigned to
monitor the cellular network to
ensure the system did not get
oversaturated, causing a system
wide failure.
ICE says that both the TDMA and
GSM networks can handle up 70
SMS messages per second, or
4.200 per minute or 252.000 per
hour. Yesterday, the GSM network
handled an average of 250.000
messages per hour, while the
TDMA 280.000.
The last time the network was
saturated was last December 25,
when, according to ICE
officials, 714.000 messages were
sent between 12 midnight and
1am. It took most of the
Christmas Day for the network to
catch up and send all the
messages, of which some were
lost in the heavy load.
SMS messages are preferred by
many as they can be sent fast
and economical. Some telephone
units have the ability to
"broadcast" - sending the same
message to multiple receivers at
one time.
The cost to send an SMS message
is ¢1.5 colones, compared to the
¢30 colones per each minute to
make a voice call.
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The New Outsourcing Kid On
The Block: Costa Rica
By W. David Gardner,
TechWeb.com
The Costa Rican outsourcing
industry is preparing to
step up its emerging IT
(Internet Techonology)
expertise, as it builds on
some existing successful
outsourcing contracts while
struggling with the agonies
of moving rapidly out of
third-world country status.
On the plus side, what may
be the world's most
ambitious outsourcing
contract now has a Costa
Rican segment. In 2003,
Hewlett-Packard won a $3
billion outsourcing contract
from Proctor & Gamble and
has since added to it,
elevating Costa Rica's role.
What's more, Costa Rican
companies are continuing to
add resources and offices in
the U.S. The Central
American country is seen as
the center of new alliances
among Central American and
Caribbean countries.
Taking note of the
developments this past
Sunday was no less that
India's Minister of State of
Outer Subjects, Rao Inderjit
Singh, who said his country
would donate $2 million to
establish a Regional IT
Training Center in Costa
Rica.
On the negative side,
officials from Costa Rica's
telecommunications monopoly,
ICE, said last week that
they are alarmed at the
siphoning off of revenues by
VoIP telephoning and they
have vowed to address the
problem.
"Software development is
growing here," said Federico
Cartin Arteaga, executive of
the Chamber of IT and
Communications, in an
interview. "Of 102 countries
with indigenous
software-development firms,
Costa Rica ranks 14th. And
we're a small country."
With a population of about 4
million, Costa Rica boasts
nearly 25,000 software
professionals. Cartin - who
was born in the U.S. and
moved to Costa Rica as a
child with his parents -
said the IT industry took
advantage of a grant from
the Inter-American
Development Bank to
eliminate what seems to be
an eternal problem of
programmers everywhere: the
gap between what
universities teach and what
companies need.
While the country has the
obligatory call centers and
tech-support operations, it
has begun to carry out some
imaginative tasks, too.
Costa Rica is the land of
coffee - they call it
"grains of gold."
Appropriately, a local IT
company has developed a
computerized solution for
sorting the precious beans.
The firm, Xeltron, is now
working to develop the
solution to sort rice and it
sees a potential global
market therein.
Costa Rica is also the land
of high-quality but
inexpensive dental work.
Cartin says Align
Technologies, with a team of
Costa Rican orthodontists,
makes molds of the teeth of
U.S. patients in. The final
artifacts are sent to the
U.S. "We call this a
third-generation call
center," Cartin said.
Cartin didn't deny reports
that the orthodontic system
worked well enough that
movie star Tom Cruise used
it.
Several Costa Rican
companies have set up
offices in the U.S.--most of
them in Silicon Valley - to
attract outsourcing clients.
For instance, Avantica
Technologies has an office
in Menlo Park, where scores
of its software developers
provide custom programming
for several U.S. firms.
In addition to P & G, the
other major U.S. company
that has made substantial
investments in Costa Rica is
Intel. The semiconductor
colossus not only
manufactures processors, but
also carries out some
advanced design work there.
Dobbs Defeats Fernandez in
Play-off for the Costa Rica
Open
Kyle
Dobbs of the USA completed a
thrilling victory at the
Costa Rica Open to defeat
Sebastian Fernandez in a
sudden-death play-off at the
Cariari Country Club, San
José.
Dobbs, who began the final
round one stroke behind
third round leaders
Fernandez and Michael Hoey
of Northern Ireland, dropped
a shot on the second to slip
further behind Fernandez and
Hoey but rallied superbly to
take control of the
tournament with five birdies
in his next seven holes to
get to the turn in 31 and
take a three shot lead from
Fernandez with nine holes to
play.
But the Argentine, who took
the 2003 Costa Rica Open
title after a play-off with
his compatriot, Cesar
Monasterio, refused to give
up the fight, even as he
stepped onto the 16th tee
trailing Dobbs by three
shots with just three holes
to play.
Fernandez, meanwhile, was
philosophical in defeat. He
said: “At one point I
thought the tournament was
gone, because Kyle was
playing very well. But I
also knew there were four or
five holes left and you
never know what can happen
until the end.”
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