Friday, July 28, 2017

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.


Not long ago, about the only expats seen here in Medellin for relatively long-term stays were 30-something digital nomads or else retirees from North America or Europe seeking first-world amenities, fine weather, good health care, friendly people and bargain prices.


Medellin’s world-famous “Metro” public transit system including electric rail, aerial tram, road tram, bus rapid transit (BRT) and free bicycles at Metro stations is breaking all-time records for public use – and now aims to help cut a worrisome growth in vehicle air pollution.


The latest report from Colombia’s economic statistics agency (DANE) shows that Antioquia’s exports rose 14.7% year-on-year in the first two months of 2017 -- and Antioquia likewise continues to surpass all Colombian departments in total share of exports, at 19.4%.


Medellin-based gold miner Mineros SA announced March 22 that its full-year 2016 profit rose 36% year-on-year, to COP$98.8 billion (US$33.8 million), while sales in Colombia rose 8.3%, to COP$382 billion (US$130.7 million).


Colombia’s Banco de la Republica (BR, the state bank) found in a new study that Medellin and the surrounding Antioquia department are generally out-performing the national economy, especially in certain export sectors.


Empresas Publicas de Medellin (EPM) – now a multinational electric power and utilities giant – reported March 17 that its full-year 2016 profits rose 85% year-on-year, to COP$1.86 trillion (US$641 million).

Gross revenues rose 14%, to COP$15.8 trillion (US$5.4 billion), while earnings before interest, taxes, depreciation and amortization rose 12%, to COP$4 trillion (US$1.38 billion).

Payments to its sole shareholder – the city of Medellin – rose to COP$817 billion (US$282 million), while infrastructure investments hit COP$3.87 trillion (US$1.3 billion), mainly for its 2.4-gigawatt “Hidroituango” hydroelectric dam project in Antioquia, now two-thirds complete, according to the company. EPM projects that its payment to the city of Medellin is likely to hit COP$1 trillion (US$345 million) for the 2017 operating year.

The improved results came despite the “El Niño” drought in Colombia in early 2016 (which reduced water flow to hydroelectric plants) as well as a four-months-long outage at its Guatape hydroelectric plant in Antioquia, which had suffered a fire that destroyed several cables. However, insurance covered the losses from the Guatape incident, hence lessening the financial impact on 2016 income.

EPM now serves 22 million customers in Colombia, Chile, El Salvador, Guatemala, México and Panamá, producing and delivering electric power, water, sanitation, sewage treatment and natural gas for homes, offices, factories and vehicles.

EPM director-general Jorge Londoño de la Cuesta added that the year 2016 brought “great challenges for our group [but] we achieved excellent results, as evidenced by our projects and our financial figures.” Londoño de la Cuesta added that EPM has maintained a favorable investment-grade debt rating of “BBB+.”

Meanwhile, in Antioquia alone, EPM added another 35,922 sewer hookups last year, as well as 67,472 more customers for natural gas service, plus another 60,127 new customers for electric power service, according to the company.

EPM’s tiered tariff structure – where homes and businesses in higher-income neighborhoods subsidize customers in poorer neighborhoods -- enabled 15,355 more low-income families to obtain water, power and gas services last year, Londoño de la Cuesta noted.

EPM also continues to lead all of Colombia in offering prepaid utility services, which encourages more-efficient and more-economical use of water, power and gas, he noted.

During 2016, EPM added 25,400 more customers to its prepaid energy services and another 8,924 to its prepaid water services. In addition, a new “Precarga” service now enables EPM clients to buy prepaid power and water service via cell-phone apps.


Thanks to the Colombian government’s recent tax reform law (see Medellin Herald on December 29, 2016), Wall Street bond rater Fitch has just decided to upgrade Colombia’s debt-risk outlook to “stable,” up from its former “negative” rating.


Medellin and the surrounding Antioquia department are likely to see 3.3% growth this year in gross domestic product (“PIB” in Spanish initials), according to the latest forecast by the Camara de Comercio de Medellin para Antioquia (CCM), the local chamber of commerce.


Colombia’s Agencia Nacional de Infraestructura (ANI) announced March 9 the start of construction on the “Vias del Nus” highway project linking Medellin suburbs northward to major Atlantic ports including Cartagena, Barranquilla and Santa Marta.

The COP$1.1 trillion (US$366 million) project -- also known as “Vinus”-- is financed privately, with Colombia’s Financiera de Desarrollo Nacional (FDN) having arranged loans from investor-partners including International Finance Corporation, Corporación Andina de Fomento (CAF), Sumitomo Mitsui Banking Corporatión and Colombia’s Ministerio de Hacienda y Crédito Público (see Medellin Herald on January 25, 2017).

Scheduled for completion by 2021, the “Vinus” highway system would run 157.4 kilometers and would enable freight and passenger vehicles to travel at speeds averaging 80 kilometers per hour -- slashing travel time between Medellín and Cartagena to 14 hours, down from 24 hours today, according to ANI.

When complete, “Vinus” will connect to Puerto Valdivia, linking with the “Rio Magdalena 2” and “Conexión Norte” highways, ANI noted.

“This project will push forward development and progress in Antioquia and in the entire country, given that it will be part of the highway connection to the Middle Magdalena region, the northeast of Antioquia and the new highway corridor to [the Atlantic ports of] Coveñas and Cartagena,” added ANI president Luis Fernando Andrade.

The first phase of construction involves rehabilitation of 35.6 kilometers of highway between Cisneros and Alto Dolores. Then -- over the next four years -- 24.3 kilometers of four-lane, divided highway between Pradera and Porcesito will be built. The "Vinus" project also includes new, twin tunnels (each of 4.1 kilometers) at the La Quiebra pass, plus a new link to Cisneros, plus 2.7 kilometers of a third lane of highway between San José del Nus and Alto Dolores.

By 2021, the “Vinus” project will form part of 97.5 kilometers of four-lane divided highway including the section between the Medellin suburb of Bello and Hatillo, ANI noted.


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SILLETEROS PARADE 2016 by JOHN AND DONNA STORMZAND (click to enlarge)

MEDELLÍN PHOTOS by Gabriel Buitrago (click to enlarge)

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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