Panama announced that it has entered into a new agreement with an investment group that is partnering with an affiliate of Mediterranean Shipping Company (MSC) to complete and operate the long-delayed Panama Canal Container Port.
The project had started eight years ago by a Chinese company but after the 2019 elections in Panama, the new government canceled the concession.
Under the new agreement, Notarc Management Group, a private investment and asset management company active in Panama, Latin America, and the Caribbean will take over the project which was 40 percent completed before the prior contract was canceled. The group acquired the rights to the project and will finalize the plans and complete construction at the container terminal which will be located in Colon, new the Caribbean entrance to the Panama Canal. Terminal Investment Limited, an affiliate of MSC joined the project and will also undertake management and oversee operations at the facility.
“Panama is an ideal gateway hub in the Americas and the world,” said Dion Bowe, Managing Partner of NMG Latin America and the newly appointed CEO for the Panama Canal Container Port. “This acquisition is a strategic opportunity for us to further develop and integrate a regional logistics platform while investing in assets which are synergistic to our investment model and where innovation and location offer an incomparable business footprint in the region.”
The Panama Maritime Authority signed the original contract for the project in 2016 timed to the construction of the NeoPanama locks as part of the overall expansion project. The concession, which was awarded to Shandong Landbridge Group and its partners was part of China’s planned expansion in the region. The project called for the construction of a 2.5 million TEU container terminal, to be carried out by the Chinese state-owned construction giant China Harbour Engineering Company with the design of the piers by Beijing-based Port Design Institute. The project was to feature four berths with a total quay length of 3,900 feet and a depth of 59 feet. They also planned to explore the development of liquefied natural gas (LNG) facilities or other energy projects.
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Following the election of a new president in Panama, the controversial project which had drawn criticism from the Trump administration was among multiple contracts suspended for an official review. The Panama Maritime Authority revoked the concession in June 2021 reporting that it had found that the Landbridge-led consortium had failed to comply with numerous contractual terms. They cited lower amounts invested in the project than agreed to in the concession and lower levels of employment for Panamanians than agreed to in the terms of the deal.
The new group said it would review the designs and resume construction at the location before the end of 2022. They estimated that the total investment will have grown to $1.4 billion for the creation of the port facility versus the original $900 million in the agreement with the Chinese. The modernized transshipment facility is expected to handle 2.5 million TEUs in its initial years and grow to a capacity of 5 million TEUs.
In addition to the transshipment port, Notarc has entered into a memorandum of understanding with U.S.-based SGP BioEnergy to construct and develop a bioenergy facility and other logistics infrastructure at the Colon project.
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