Montevideo second box terminal concession bombs

Bidders were asked to acquire shares in the development company at a cost of $1.2m; the winning bidder would then have to design, build and operate the terminal for 30 years.

An auction was preferred over a tender because it was considered a much faster process to implement. In addition, the $1.2m would have gone to the National Ports Authority. A second auction may well now be undertaken in July.

The lack of bidders has been put down to the dispute between the existing concession holder and the port authority.

Container terminal concessionaire Katoen Natie has been told by the government that legally nothing can alter the operating conditions under which the company was first contracted. The Belgian company is seeking arbitration in respect of an exclusivity clause it believed was included in the original document.

Katoen Natie believes that its investment of $190m will be put at risk if the second container terminal opens, given that the terminal first met the minimum number of container moves set out in its contract in 2009. If it is unable to maintain this minimum number for three consecutive years it could lose the concession.

According to the port authority, the terminal has begun to recover following the recession and would therefore not be put at risk if the second terminal opens.