DP World breaks ground on controversial $1.2bn Ecuadorian port

Dubai port operator and developer DP World has broken ground on a greenfield multi-purpose port project at Posorja, Ecuador, at the delta of the Guayas River in the south of the country.

The ceremony was performed by Lenín Moreno, the president of Ecuador, and Ahmed Bin Sulayem, the chairman of DP World. Construction proper is expected to start within the next six to nine months.

In the first phase of the project, DP World will invest $500m to buy land, dredge an access channel, build a 20km access road and a 400m berth. This is expected to take about 24 months and create a port with a container handling capacity of 750,000 teu.

In subsequent phases the company will spend another $700m to create a 1-square-kilometre logistics zone and 2km of berth to make the port a regional trading hub.

In return for this capital, DP World will be granted a 50-year concession to operate the new port.

Bin Sulayem said in a press statement: "This is an important landmark in Ecuador’s growth story – we’re celebrating today the first public-private partnership that will benefit [the] local economy and change forever the way it trades with the world.

"The port has been designed to serve the growing needs of global markets – something we’ve been able to witness first-hand with our 78 terminals around the world – and will dramatically improve the global competitiveness of Ecuadorian exporters."

Jorge Velásquez, the general manager for Port Posorja, added that the facility would be able to handle Post-Panamax vessels "to complement Guayaquil and other nearby terminals".

Posorja will be able to do this because it will have a 15m draft compared with 9.8m at the port of Libertador Simón Bolívar Guayaquil, which is on the same estuary but further inland. That port is close to its maximum throughput capacity of more than 1.75 million teu.

The port was first agreed in June last year. The decision was controversial because SP World gained the contract without going through a competitive bidding process.

Contencon, the Filippino company that has run the neighbouring container terminal at Guayaquil since 2007, threatened to take legal action against DP World for unfair competition. Contencon is a subsidiary of Philippine port operator International Container Terminal Services. In the event, this claim was rejected by Ecuador’s competition authority.

Spanish tuna fishing company Albacora, which owns land in Posorja, is still fighting an international arbitration in pursuit of $20m in compensation against the state of Ecuador.

Image: The site of the future port of Posorja (Ecuador Defence Ministry)

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