Planes, Trains and Boutique Hotels

By Nicholas Asheshov

July and August are always the top weeks of what has become a year-round rain-or-shine season for the Cuzco tourism industry though things have been slow following powerful flash floods in January. Global-warming rains suddenly quintupled the volume and speed of the monsoon water in the Rio Vilcanota, the one that wraps around Machu Picchu, slashed out big slabs of the narrow-gauge railway line that chugs tourists from Cuzco over the mountains and down a dramatic canyon to the ruins.

Machu Picchu Cut Off! Tourists are increasingly coming to see other things like the Manu and Iquitos jungles, the Nazca Lines, Lake Titicaca. Whatever: no Machu Picchu, no tourists.

The railway, a concession run by Orient-Express Hotels, OEH, is, six months later, not fully operational but the last 25 miles is open again with crawl-along speeds on the recently-repaired bits. But, hey, who cares if it takes a half-hour extra to get to such a stunning destination. Presumably by next year it’ll be back to rock-a-bye normal where on the only straight stretch top speed at the best of times is 25 mph.

This year, on this evocative little line another change is taking place. The Orient-Express monopoly is ending, a subject on which I am a world authority as a founding Director of Andean Railways Corp, the feisty challenger. We led a ferocious three-year regulatory battle against the PeruRail –Orient Express– monopoly. Today it’s all smiles, a bit guarded for sure, but those of us, starting with Bob Booth himself, who remember the glory days of airline regulation and outrageous protectionism, need no elbow-jogging to know the lengths to which monopolies will rise to keep the bacon to themselves.

The tourist industry in Cuzco has improved enormously in just a few years. Orient Express, a decade ago, brought five-star hotelier skill and style to their Monasterio, Cuzco and Mach Picchu Lodge and, using their panache and marketing zap, completely up-heaveled Cuzco. They quickly trained their amiable but one-star personnel to international levels and raised the comfort bar, with breath-taking prices to match. Good for them and today there’s a lively range from $10 to $1,000. No one in Cuzco, pre-OEH, knew even how to spell croissant. Today the Brescia-Libertador group, together with Starwood, are opening, next door to my own adobe riverside, woodland home, a spiffy $52mn Luxury Collection spa, lovely views of river and snow-peaks up-valley from MaPi itself. Marriott is putting up a new Olde Inca tambo in cobbled Cuzco, and there’s half-a-dozen charming luxury-boutique hotels already open. They meld in well with a daily roster of religious processions and up-the-workers down-the-politicians rallies.

There’s suddenly a flurry of snazzy restaurants with names like “Jack’s” and “Chicha” offering Novo Andino guinea-pig aux fines herbes and carpacho de alpaca. And, Dios mio! Starbucks is opening next to the Catedral. Cuzco’s been a 24/7 party since the beat-bearded ’70s so it’s just getting better. Even Barry Walker’s Cross Keys pub, which recalled the gun-slinger saloon in Star Wars, is in new, non-creaky quarters just off the Plaza de Armas with Manchester xxxx-ale and loos that work.

Today LAN is running 14+ flights a day to Cuzco, using A319s, TACA two (A319,A320), Star Peru two, and Cielos de Peru, a start-up, two more. No night flights, thank goodness. I can remember when CUZ, 11,300ft asl, would get one or two DC-3s and DC-4s wing-tipping it between the glaciers below the summits.

One example of the new upper-crust tourism involved the other day none less than Pedro Heilbron, COPA’s CEO, and Matias Campiani, CEO, Pluna, Montevideo, leading a lively bunch of top Young Presidents from all over: I had pleasant chats with South Africans, Greeks, Mumbai Indians, Francaises and most other breeds. Pedro, together with Alberto Beeck, the Peruvian financier, had asked me to tell them in a fireside chat How to Find a Lost City, an interest of mine since my National Geographic days. I told them that the way not to do it, about which I know a lot, is to look for a blank spot on the map and say, Aha! that must be where El Dorado is. I told them about people, including friends, who had come to a sticky end doing this, and that Brad Pitt and Angelina Jolie are about to shoot a movie in Bolivia about Col. Percy Fawcett, the Lost World Brit who disappeared into the Mato Grosso in 1925.

My new computer-controlled hydraulic Parker-Cummins-powered DMU-autowagons, vaguely reminiscent of a San Francisco tram painted with parrots, is called, of course: The Machu Picchu Train –The Lost City Traveller. They have cost me and my partners slightly less than late-model Dreamliners with the advantage, I suppose, that if they run out of gas at least we can push them home.

Letter from Urubamba, July 23, 2010

Get Ready, Everything’s going to change

By Nicholas Asheshov

How greenhouse warming is going to hit Peru’s deserts, the mountains, the jungle and even Lima is becoming a hot topic.

Here’s the first thing you need to know: No one has a clue what’s going to happen here nor when.

But, Tom Schelling tells me, the second is that make no mistake, “It’s serious” and that everyone has to get together to prepare for it. For a start, “the environmentalists might want to stop talking about future generations and start talking about the poor today.”

Tom is the one-man think tank who won the Nobel Prize for Economics in 2005 and he and Alice, his wife, were staying with us on their way to and from Machu Picchu.

He has also been taking part this week in a conference on climate change run by Richard Webb’s cutting-edge Instituto del Peru at the Universidad San Martin de Porres.

Preparing for the conference, Richard tried to make a list of the different predictions from computers and scientists about what’s going to happen in Peru. But he drew a blank. There have been two or three recent studies, one on the Mantaro valley and another on the Coast and Sierra from Ecuador down to Bolivia, measuring temperature change.

“But it amounts to very little, and little seems to have been discovered about how Peru´s geography will produce either more or less warming than the world average in each region, or how warming will translate into rainfall.”

Pablo Lagos, Peru’s Numero Uno El Niño scientist, at the Instituto Geofisico del Peru, tells me that they have put electronic buoys out into the sea off the North Coast “but the fishermen steal them”.

Here’s a scare story from the past. The most productive epoch of the Moche culture was brought to a vicious end between 536 and 594 by a devastating sequence of 30 years of rain followed by 30 years of drought.

If it happened once it can happen again.

The precision of the dates comes from core samples taken from Andean glaciers.

These same core samples say, too, that today’s mess is speeding up.

Prof. Lonnie Thompson, a leading glaciologist, of Ohio State University, has told the American Association for the Advancement of Science that the Qori Kalis glacier, the main compenent of the Quelccaya icecap in the Cordillera Oriental beyond Lake Titicaca, will have disappeared by 2012. Quelccaya is really high, at an average 5,470 ms a.s.l., and is the biggest glacier in the tropics.

Thompson has been drilling into Quelccaya since the 1960s and the cores date back to the time of Christ. But the disappearance of the ice has speeded up exponentially in the past few years.

“Tropical glaciers are the canaries in the coalmine for our global climate system [they combine] temperature, precipitation, cloudiness, humidity and radiation,” Thompson says.

Tom Schelling is quiet and good-humoured but from Harvard, Yale, the White House and elsewhere his steely mind has been slicing left, right and centre through the verbiage of the public issues great and small of the past half-century, wars, nuclear arms, abortion, drugs, China, Game Theory, race and a score more.

He is professor of foreign affairs, national security, nuclear strategy and arms control at the University of Maryland. His The Strategy of Conflict pioneered the study of bargaining and strategic behaviour and has been one of the most influential books of the past half-century.

He warns today of insect-born disease, food shortages and among others, a rise in the sea level of maybe six metres. Don’t think just beach house.

Tom doesn’t like Bush any more than the rest of us but he too is, famously, against the Kyoto Agreement (1990) because, he says, it’s unenforceable, therefore meaningless. “I told Al Gore he was lucky to lose the election (in 2000) because he would never have got it past the Congress.”

He says that until the United States gets together on a serious plan nothing much is going to happen. “We can’t help or push the Chinese, the Russians, the Indians and the Brazilians if we’re not leading things ourselves.”

He talks of rocketing sulphur into the stratosphere to help block the sun from over-heating the planet. “They don’t want us to know about this because they don’t want us to stop cutting emissions.”

When Tom, who was born in 1921, and Alice returned from Machu Picchu, I asked him how he’d enjoyed himself:

“It was one of the most wonderful days of my life.”


New train companies to compete on the Machu Picchu line

One new company, possibly two, will be competing with Peru Rail later this year, providing more railroad services on the highly-prized line to the pre-hispanic citadel of Machu Picchu, Peru’s key tourist attraction.

The first company to be granted the license is Inca Rail, formed by the Peruvian company Grupo Crosland and Turistren of Colombia as the operator. According to Juan Alberto Forsyth of Crosland, the company expects to begin the service in October with one triple-car train for 150 passengers and will add two more triple trains by the end of the year.

The second company expecting to be given the green light is Andean Railways Corp, which met the Ministry of Transportation requirements last week and is now waiting for the approval of Ferrocarril Transandino, which operates and maintains the railway line.

ARC’s main operating shareholder is Iowa Pacific Holdings, Chicago, a conglomerate of railway companies operating in Texas, New Mexico, Arizona, Colorado and Illinois.

Nicholas Asheshov, one of the British investors, with Christopher Roper, both with long-standing connections in Peru, told Peruvian Times that Iowa Pacific’s focus is on freight but they have a long-established tourist/passenger company in Colorado and another that specializes in old trains which run all over the US and Canada. Andean Railways aims to corner 20% of the 500,000 tourists that visit Machu Picchu every year.

Both companies plan to offer first-class railcars as well as economy class.

A third company, Wyoming Railway, has been granted a preliminary license but has yet to present its proposals to the Ministry of Transport.

For the past nine years, since the national railway system was privatized, the sole service to Machu Picchu has been provided by Peru Rail, operated by Orient Express Hotels Ltd and owned equally by the famous travel company and Peruval Corp, with interests in tourism, real estate and infrastructure.

However, an antitrust ruling last year by Indecopi, the national copyright and fair competition institute, opened the door to competitors.

Ferrocarril Transandino, as operator of the railway line, has been critical of the Ministry of Transport’s decision to “lower the barriers” to companies it does not consider on a par with Peru Rail.

Raúl Galdo, director of Legal and Regulatory Services at Orient Express, which shares equal ownership of Ferrocarril Transandino with Peruval, told El Comercio, “We’re surprised at the Ministry of Transportation’s flexibility to modify the technical and financial requirements in order to grant operating licenses to companies that otherwise would not have been accepted.”

“Inca Rail, for example,” Galdo said, “has Turistren of Colombia as its operator, a company that operates a 30-mile line on the weekends between Bogota and Zipaquirá. In the case of Wyoming Railway, its operator is Maryland and Delaware Railroad, a company that operates a 120-mile route twice a year for a chicken fair. And in the case of Andean, its operator is Iowa Pacific Holdings, which runs a tourist route between May and October since 2005. We want these companies to enter the route?”

Ferrocarril Transandino has been operating the railway line since 1999, when it won the bid for a 30-year concession to operate, expand and maintain not only the 124 km narrow gauge line to Machu Picchu, but also the standard gauge 800 km line from Matarani and Mollendo on the coast to Arequipa, Puno and Cusco.

Within the next week, it will be posting a bid for timetables. Inca Rail has shown an interest in three daily schedules, while Andean Railways is aiming to request four.

Inca Rail will be running its service between Urubamba, Ollantaytambo and Machu Picchu and has acquired land in Ollantaytambo for its yard. It is investing $4 million, which has included the purchase of the narrow gauge cars in Portugal, for outfitting in Peru. Crosland’s earlier experience in the railway business has been to supply locomotives to Enafer, the Peruvian railway system prior to privatization, and to the former state mining company Centromin as well as to its main client, Southern Copper Corporation. Forsyth stressed, however, that this only involved supply and after-market support, which is why the company brought in Turistren as a partner.

Published April 29, 2008 by

CADE Innovations: Stay tuned for ‘El Nuevo Peru de Antes!’

By Nicholas Asheshov

As business leaders meet in Cusco this weekend to focus on “Innovation” at the Annual Executive Conference, CADE, from the countryside of the Urubamba valley the author proposes looking back for truly radical and practical, high-tech innovation.

Ancient Peru was one of the half-dozen centers of the technological and political innovation that ushered in today’s complex world of great, interdependent cultures.

Unlike the other centers — China, the Fertile Crescent and Egypt, India, and finally the Mediterranean and Western Europe — most of Peru’s innovations, above all in social organization, were lost in the disaster of the Conquest.

Proud, sad bits and pieces of the ancient Andean and coastal cultures remain.  The potato and a half-dozen varieties of maize have been essential parts of the food chain that is feeding 7,000 million people.  China is today the world’s biggest producer of the potato, first domesticated around Lake Titicaca, and of the sweet potato, camote.

Peruvians can reflect, perhaps with mixed feelings, that it was the US$200,000,000,000, at today’s values —the figure comes from Prof. Niall Ferguson’s Civilization: The West and The Rest, published in London earlier this year— that the conquistadors sent back to Europe between 1532 and 1780, which provided the liquidity for the creation of the global economy of the 21st century.

But the precious metals, like the guano, tomato, quinoa, cherimoya and cocaine, are secondary and are in any case not really what we mean by innovation.  The khipu, the cutting-edge strings-and-knots combination of iPad and Registros Publicos — production cost 35 cents— was lost, destroyed maliciously by the priests, the Taliban of the day.  Only 620 remain. According to Prof. Gary Urton, of Harvard, it was much more sophisticated than anything in Europe at the time but they still haven’t cracked its complex code.

Like Machu Picchu, the thousands of miles of all-weather roads, irrigation systems on the coast, tens of thousands of stone terraces and water systems in the valleys and highlands, and the networks of warehouses, these were by-products of the real value of life in Ancient Peru.  This was the lively, aggressive social and political stability that allowed the Incas and a dozen great cultures that preceded them — Chavin, Moche, Tiahuanacu, Huari — to produce societies that were in the front rank of their contemporaries worldwide.

On Lake Titicaca, in the Sacred Valley, and in 50 other valleys like the Colca and the Rimac, the stability and genius for working together of the ancient Peruvians literally remodeled one of the world’s toughest environments.  They consistently created an idealized, civilized world of good order and stability.

No one can look at the massive millimeter-fine, delicately imaginative granite blocks at Sacsayhuaman, Pisac, Rac’chi, Huanuco Viejo, Rosaspata, Sillustani and, naturally, Machu Picchu itself without understanding instantly that for two or three thousand years ancient Peruvians created a purposeful permanence.

The same applies, with obvious local variations, to the great adobe pyramids on the coast.  Perhaps in the same way that today’s costeños are more outgoing than the peoples of the highlands, the costeños produced the flamboyant artistry of the gold- and silver-working of Sipan.

These were productive, often competitive societies whose vision was not just day-to-day or year-to-year, but in some clear way, eternal.  You and your children do not spend a lifetime producing a granite masterpiece just to fill in the time between meals.

Peruvian schoolchildren are not taught about the power and range of their ancestors.

The Incas — schoolchildren in Urubamba, Huancane, Bambamarca and Ayabaca are taught today — were ‘indigenas’.   There is a puzzling political agenda here.  The teachers do not know, do not seem to want to know, about Peru’s long distinguished past.

So my proposal for a first innovation that Peru today might want to consider is to produce DVD and computer programs that will be in every school in the land, every classroom in the country, which will tell the real story of the pre-Conquista past.  They will learn, for instance, of the complex, innovative technology that went into the layered construction of the terraces and hydrological systems they see around them.  They will learn about the networks of warehouses and storage facilities.  When the Spaniards arrived, they found that there was two or three years of food and clothing stored everywhere.

The project includes the creation of computer games called “Build An Andean Empire” and “Run Your Own Coastal Civilization” and, of course, war games like “Incas vs Spaniards.”

Secondary-level kids will move on to “How to Run a Municipality/Region/Country.”

And so on.

The interactive computer programs and movies, modeled perhaps on the science and history programs produced for the NGS, the Discovery Channel, the History Channel and the BBC, will be financed and distributed by the banks and commercial and industrial companies, all of them members of CADE, which will also be in charge of distributing them.  Teachers, including members of SUTEP, will be instructed on teaching the children how to switch them on and off.

Within a few years young Peruvian voters will have a new vision of their country and its possibilities.  Unlike most other countries, including some of the neighbors, they have a history, not to mention a geography, which they can see and touch, second to none. Population: from 1mn to 3mn to 30mn — and now on to 40mn

It is hard to blame today’s governments for not telling the young about the first-class public administrations of Peru half a millennium ago.

The most crushing blow of the Conquest was in the loss of people.  Between smallpox and piratical savagery, nine out of every 10 Peruvians died between 1530 and 1601 when a census registered only one million people, most of them in the highlands.  The coastal peoples had been exterminated.

These population losses were calculated by Noble David Cook in Demographic Collapse: Indian Peru 1520-1620 and Born to Die; Disease and New World Conquest published by the Cambridge University Press.

Peru’s population was to rise painfully slowly to three million by 1911.  All the Peruvians of a century ago would all fit easily into Lima’s Cono Norte today.   As everyone knows, today Peru’s population is 30mn, 10 times greater, in less than four generations.

Inca Peru had 10 million inhabitants, according to Prof. Cook’s best guess.   All of them lived out in what is today the countryside.  Cuzco had perhaps 40,000 inhabitants, less than Huacho today.

The next innovation will be to prepare for a Peru that within another generation will have 40 million people.  Peruvians will be much younger in a decade or two than the Chinese and other Asian tigers and, of course, the already-geriatric Europeans.

The local politicians in Cajamarca, Puno and elsewhere today who are protesting against gold and copper mines are being unusually far-sighted.   They are trying to keep the gold, silver and copper out of the hands both of international bankers and of Lima bureaucrats.  “Water for us, not gold for them,” they shout, and of course we all agree.   The government should instead borrow from the bankers and, noblesse oblige, repay them in worthless paper in 2041 et seq.

A decade or two from now the minerals will be worth ten times their present value and a generation of history-savvy, computer-literate Peruvians will be able to take full advantage of their elders’ foresight.


This article was published in Caretas magazine the week of November 28, 2011 in Spanish.