FC rejected for Magdalena river PPP

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FC rejected for Magdalena river PPP

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The Colombian Government has rejected the documents submitted by the Navelene consortium proving financial close for the Magdalena River Waterway public private partnership (PPP) project.

The Navelena consortium, which is formed by Odebrecht (87%) and Colombia's Valorcon (13%) recently submitted a financial plan for the project but the Government considered that the plan is insufficient and it does not prove that financial close will be reached.

Colombia's Magdalena regional river corporation, Cormagdalena, awarded the project to Navelena consortium in 2014. 

According to local sources, if the team does not guarantee funding for the project before May 11, Cormagdalena will terminate the project contract.

The problem behind this contract is that the Colombian Government is reluctant to collaborate with Odebrecht. A Brazilian judge sentenced Marcelo Odebrecht to 19 years in prison for corruption, money laundering and belonging to a criminal organization. This is part of a huge anti-corruption investigation, which stems from a bribery scheme at state-run oil company Petroleo Brasileiro SA or Petrobras. 

The project involves the design, construction, finance, operation and maintenance of the river waterway. It is estimated that construction work would take about six years. The total project investment is estimated at P2500 billion (US$810 million).

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.

The Magdalena waterway totals about 1,540 km. Most of its transportation activity is concentrated within a 900 km section, between Puerto Salgar in Cundinamarca department and Barranquilla port in Atlantico department. The recovery of the river commercial navigability seeks to transform the river into the principal fluvial corridor in the country.

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