Cormagdalena to Consider PowerChina Dredging Proposal on March 8
Cormagdalena – the Colombian government agency overseeing a proposed dredging project for the Magdalena River – announced February 22 that it had received a letter of intent from PowerChina Limited Colombia (PCLC) that would assume control of the long-stalled project.
However, according to Cormagdalena, PCLC still must complete technical, legal and financial analyses of the proposed “public-private alliance” (PPA) project, which had an estimated cost of COP$2.5 trillion (US$877 million).
Because initial project proponent Navelena failed to meet a February 22 deadline for achieving financial close on the project, Cormagdalena now will hold a contract-termination hearing on March 8, according to the agency.
“In the event that the transfer of the PPA contract to PowerChina Limited Colombia is not effectively achieved, Cormagdalena will guarantee the normal navigation through the Magdalena River through the signing of public works contracts,” according to the agency.
Navelena’s financing of the project collapsed when Japan’s Sumitomo Mitsui Banking Corporation decided to pull-out because of continuing involvement of Brazil-based construction contractor Odebrecht, which is involved in a multinational bribery scandal (see Medellin Herald on February 2, 2017).
The dredging project would dramatically improve freight movements on the Magdalena River, boosting the economic competitiveness of industrial and commercial companies in key parts of Colombia -- including Medellin and Antioquia.
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