MegaProject 878: Colombia scraps Odebrecht's Magdalena River Waterway project
- Valores y Contratos (Valorcon)
- Sumitomo Mitsui Banking Corporation (SMBC)
- PowerChina Limited Colombia
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The government of Colombia is about to cancel the US$861-million PPP contract for the Magdalena River Waterway project, led by Brazil's Odebrecht.
This decision comes after Odebrecht failed providing financing for the project. As we reported in late December, Japan-based Sumitomo Mitsui Banking Corp. (SMBC) intended to provide funding commitments totalling US$250 million for the project, but in January the company cancelled its finance agreement with Odebrecht, so the project hasn't achieved financial closure.
According to sources, PowerChina is interested in taking over Odebrecht's 87 percet stake in the Navalena consortium and it is currently carrying out technical, legal and financial analysis of the project.
The project, awarded to the Navelena consortium in 2014, was structured through design, build, finance, operation and maintenance (DBFOM) basis. It was estimated that construction work would take about six years.
Upon completion the river would have a depth of seven feet and could transport convoys of up to 7,200 tons (the equivalent of about 234 trucks). The river basin has a 27.3Mha surface area, equivalent to 24% of the country's continental territory.
In February 24, we also informed that the Colombian National Infrastructure Agency (ANI) announced the cancelation of a road contract with the Brazilian firm Odebretch, the toll road's majority shareholder. After several weeks of negotiations, ANI reached an agreement for the cancelation of the contract with the concessionaire of Ruta del Sol II highway. The trade and industry regulator, SIC, issued a resolution ordering the immediate termination of the contract for the concession.