As reported by infrappworld.com, the Government of Colombia is about to cancel a US$861m PPP project for navigation improvements to the Magdalena River due to financing challenges. This contract had been earlier awarded to Odebrecht of Brazil, but the latter company is facing lawsuits across South America and failed to provide the initial funding required in the concession agreement. The project is of strategic importance to the country, as the River needs extensive dredging to be able to fulfill its potential for transporting cargoes between interior regions and the key ports of Barranquilla and Cartagena.
Rivers/waterways in key South American countries are becoming increasingly important routes for cargo traffic flowing into hinterland markets. PPP-oriented projects are a viable structure for developing and maintaining channels and water depth. However, financing can be challenging without keen understanding of both the technical and commercial risks inherent in such projects.
Mercator has studied river-based cargo traffic flows on a number of different projects in various countries, including Brazil, Argentina, Colombia, Germany, the U.S., and Canada. We have studied Container On Barge (COB) opportunities, bulk commodities transport in barges, cargo route costing alternatives, and privatization of lock/dam infrastructure.
For more information on the Colombia waterway project, click here.
