Friday, August 18, 2017

Cormagdalena Cancels Navelena Contract; Magdalena River Dredging Up for Grabs

Published in Companies Written by  April 18 2017 font size decrease font size increase font size 0
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Cormagdalena – the Colombian government agency overseeing a massive dredging project for the Magdalena River – announced April 17 that it has officially cancelled Navelena SAS’s contract because of failure to complete financing.

The proposed COP$2.5 trillion (US$877 million) project would dramatically improve freight movements along the Magdalena River, making industrial and commercial enterprises more competitive – including those in Medellin and Antioquia.

However, with the contract now cancelled, that means a new contractor must be found – which could push-back completion of the project to around 2022, according to Cormagdalena.

To address short-term navigation problems, Cormagalena will tap two government organizations – Invias and state oil company Ecopetrol -- to clear sand-bars around the port of Barranquilla and ensure navigation all the way to Barrancabermeja, according to the agency.

As for the longer-term dredging project, Cormagdalena aims to put up for bid a new private-public alliance (APP in Spanish initials) scheme by January 2018, according to the agency.

Despite delays in improving river navigation, freight movements on the Rio Magdalena nevertheless have continued to rise, from 1.6 million tonnes in 2014 to an estimated 3 million tonnes this year, according to Cormagdalena.

Navelena’s financing of the project collapsed when Japan’s Sumitomo Mitsui Banking Corporation decided to pull-out because of a continuing involvement of Brazil-based construction contractor Odebrecht, which is involved in a multinational bribery scandal (see Medellin Herald on February 2, 2017).

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