October 28, 2016 / 11:01 PM / 3 years ago

Mexican companies advance in bid to take over Colombia river project

BOGOTA, Oct 28 (Reuters) - The consortium directing a $843 million effort to make Colombia’s Magdalena River navigable has submitted all but one piece of paperwork required for two Mexican companies to be put in the running to take over a majority stake in the project, the government said on Friday.

IDEAL and FCC Americas, part of billionaire Carlos Slim’s Carso Group, have declared their interest in taking over a majority stake in Navelena, the construction consortium that will carry out dredging on the river to increase cargo capacity.

The companies were required to turn in financial information and other paperwork before Cormagdalena, the government agency supervising the project, can consider their bid.

The only missing document is a letter of commitment from Goldman Sachs, which has previously said it would be interested in financing the construction, Cormagdalena said in a statement.

“In terms of the documentation referring to the fifth requirement - the letter of commitment from Goldman Sachs - Navelena has asked to have until Tuesday, Nov. 1 to hand it in,” Cormagdalena said in the statement.

The river project, valued at 2.5 trillion Colombian pesos ($843 million), is set to increase cargo transport on the river to some 10 million tonnes by 2029, in an effort to reduce freight costs and aid exports by commodities producers and agricultural companies.

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 Navelena, which is carrying out the project, sending the government scrambling for a replacement.

The handover of the documentation has allowed Cormagdalena to further postpone the hearing on the suspension of Odebrecht’s contract until Nov. 21, the statement said.

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.

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

$1 = 2,985.4600 Colombian pesos Reporting by Julia Symmes Cobb; Editing by Helen Murphy and Bill Rigby

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