After an arduous process, the government of Costa Rica has signed a concessionary award to Dutch run APM Terminals for the construction of the port and its management for a period of 30 years.
APM Terminal's investment will be $950 million, and they will have a period of 3 years to build a container port in Moin on the Caribbean coast of Costa Rica, north of the existing port facilities.
With the deadline for signing the contract, the 26 August, nearly reached, the government and opposition factions are sticking to their positions.
Laura Chinchilla's government is holding firm its intention to grant a concession to the company APM Terminals but has yet to resolve two complaints filed by the National Chamber of Banana Workers and Japdeva Workers Union (Sintrajap).
The project consists of a specialized port for the transshipment of containers with an operating area of 45 hectares, and a cost of $950 million.
A press release of the Presidency of the Republic of Costa Rica reads:
Vice President Liberman stressed the importance of getting "the green light to start the tender process, which will generate more employment in the country, mainly in the port area"
The financial crisis affecting Japdeva is threatening the operation of the ports.
A deficit of over $8 million weighing on the Board of Port Administration and Economic Development of the Atlantic (Japdeva), the administrator of the country's main ports, has the institution on the brink of crisis.
Lack of resources is impeding improvements to make the port more competitive, due to the fact that there are urgent investments that need to be made in order to continue operating.
Despite the delays, modernization initiatives are emerging as potential positive signals for the Costa Rican ports.
The ports of Moin and Limon, two gateways of international trade into the country, are lagging behind compared to other ports in the region and Latin America.
So far, attempts to modernize the ports, such as the recent concession to APM Terminals, have faced many obstacles, introduced mostly by the workers union of the Board of Port Administration and Economic Development of the Atlantic Slope (Japdeva).
While the Atlantic ports administration insists on a 21% increase, exporters and shippers are defending their position.
Loss of competitiveness against other nations and rising operating and logistics costs are some of the reasons that the Chamber of Exporters and Agents of Steamship Owners are giving to justify their disagreement with the proposed port tariff increase, which has been rejected by the Regulatory Authority of Public Services (Aresep).
Costa Rica would receive $2265 million over the 30-year period of concession on taxes on income, creating 500 direct jobs and 8000 indirect jobs.
A press release from the Ministry of Public Works and Transportation reads:
New Container Terminal in Moin Would Generate 8500 Jobs
This morning the Minister of MOPT, Francisco Jimenez, explained to the committee of the Legislative Assembly Awards the advantages and benefits of the concession to build a new container terminal in Moin. One of the main tangible benefits would be 500 direct jobs and 8000 indirect jobs.
The Regulatory Authority for Public Services has rejected the increase in port charges at the Moin and Limon ports as requested by Japdeva.
A press release by the Regulatory Authority for Public Services (ARESP) states:
The Port Authority Board of Economic Development and the Atlantic (Japdeva) which is responsible for providing port services in Limon and Moin, has asked the Regulatory Authority for an average increase of 21% in port charges.
The government of Costa Rica has put on hold "indefinitely" the process for the concession of the ports of Limon and Moin.
Caught between the demands of port efficiency by the productive sectors and the real power of the union, the Chinchilla administration has back tracked on its intention to grant concessions to private companies for the modernization and operation of the ports of Limon and Moin, and now intends to invest about $70 million to make sure that this essential modernization takes place, while keeping both terminals under the management of the Port Management Board of the Atlantic (JAPDEVA).
The project for construction of the Container Terminal (Terminal de Contenedores) has triumphed over the two lawsuits that sought to curb its award.
The Controller General's Office flatly rejected as inadmissible (the union has no legitimate interest, and is not a bidder in this process) the appeal filed by the Workers Union JAPDEVA (SINTRAJAP) against the award of the project to the Dutch firm APM Terminals.
The Costa Rican oil refiner has extended the deadline for bids to be submitted from April 27 until May 9.
The press release on Recope's official website states that parties interested in taking part in the competitive tender for the Atlantic oil port expansion project have until May 9, 2011 at 13:00 to present offers.
The contract is for expansion works at the port of Moín, just north west of the city of Limón.
The Costa Rican judiciary dismissed the lawsuit filed by the National Banana Chamber against the concession of the Moin Terminal Container to APM Terminals.
Randall Quirós, legal representative of the National Banana Chamber, stated that the Court rejected their petition due to "issues of form but not substance".
The lawsuit filed by the Chamber stated that the bidding rules lacked technical, environmental and financial studies.
In what seems a never ending story, the government of Costa Rica has opened the possibility for new dialogue with unions from the ports of Limon and Moin.
The Costa Rican government announced that in discussions with port unions (SINTRAJAP) a two month timeframe to reach an agreement was set.
Japdeva opposes giving in concession the privatization, modernization and operation of the ports of Moin and Limon.
The National Banana Chamber filed a lawsuit in order to nullify the award to a foreign company of a new container port in Moin.
Among arguments included in the law suit presented before the Administrative Court, it states that the tender lacks any technical, environmental or financial studies.
"Furthermore, it argues, the concession given to Dutch giant APM Terminals will force producers to pay rates 130% higher than what they pay today at the Port of Limon." Nacion.com published, "APM Terminals will charge a $ 223 fee per container, $ 43 more than Japdeva ($ 180).”
Japdeva has requested an increase of 21% in rates at ports of Limon and Moin in the Costa Rican Caribbean.
The Board of the Port Administration and Economic Development of the Atlantic (Japdeva) submitted the application to the Regulatory Authority for Public Services (Aresep), who must decide whether it supports the increase. The process could last about 75 days.