Mexican Billionaire Interested in Colombia River Project

Magdalena River
Magdalena River

Published Oct 18, 2016 8:50 PM by Reuters

Two companies connected to Mexican billionaire Carlos Slim have declared an interest in taking over a majority stake in Colombia's $857 million effort to make the Magdalena River navigable, the Colombian government said on Tuesday.

The river project, valued at 2.5 trillion Colombian pesos, is set to increase cargo transport on the river to some 10 million tons by 2029, in a bid to reduce freight costs and aid exports by commodities producers and agricultural companies.

But the project has been beset with problems. Brazilian construction conglomerate Odebrecht said in May it would relinquish 50 to 75 percent of its majority stake in the Navelena consortium, which is carrying out the project, sending the government scrambling for a replacement.

Companies IDEAL and FCC Americas, part of Slim's Carso Group, have declared their interest in taking over a majority stake in Navelena, Cormagdalena, the government agency supervising the project, said in a statement.

"We have received a letter of interest from an alternative majority group - two companies from the Carlos Slim group in Mexico," Luis Fernando Andrade, interim director of Cormagdalena, said in comments released by his office.

IDEAL and FCC Americas' interest has allowed Cormagdalena to postpone a hearing on the suspension of Odebrecht's contract until the end of the month. The Brazilian construction conglomerate currently controls 87 percent of the consortium.

Cormagdalena did not say how much of the stake IDEAL and FCC Americas were interested in taking over.

Navelena must compile a list of possible minority partners in case Odebrecht eventually pulls out of the project completely, as well as other information, by October 28, Cormagdalena said.

The consortium will also need a letter of commitment from Goldman Sachs, which has previously said it would be interested in financing the construction, the statement added.

Cormagdalena is in charge of approving or rejecting any eventual formal bids to take over the stake.

Construction to deepen the river had been set to begin in June 2016.

IDEAL, FCC Americas and the Carso Group could not immediately be reached for comment.

FCC Americas recently built a new control tower for Bogota airport and is also involved in road tunnel projects and the dredging of the Bogota River.