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Ecuador Gov’t To Decide On Future Manta Tuna Port In 3 Months

In about three months, Ecuador’s government will decide whether it will return its Pacific Manta port to state hands or grant a private company a concession to manage it, Helieve Angulo, manager of the Manta Port Authority, said Thursday.

On Feb. 28, the Manta Port Authority took over the port terminal after Terminales Internacionales de Ecuador S.A., or TIDE, a local unit of conglomerate Hutchison Whampoa Ltd. (0013.HK), abandoned its concession, Angulo said.

TIDE argued that the port authority wanted to change its contract, while the government authority accused the company of failing to meet the contract’s investment and capacity terms.

In early January, President Rafael Correa threatened expel the company for allegedly failing to meet a timetable for investments at the Manta cargo port.

Angulo said the contract establishes that the TIDE should move cargo of 30,000 TEUs in 2007 and 60,000 TEUs in 2008, but that it transported 2,912 TEUs and 1,245 TEUs respectively.

Angulo said that the port authority has started an administrative process to end the contract, to charge a guarantee fee of $7 million, and to hand the concession to an interested private company that will receive a 30-year concession.

Lucia Fernandez, president of the port authority’s board of directors, said companies from Venezuela, Spain and China are interested in operating the port, but she didn’t identify them.

Hutchison signed a 30-year concession in 2006 for the modernization and operation of the Manta cargo port. The contract called for $240 million in infrastructure investments, $161 million in equipment and $122 million for maintenance.

Around 30% of the $523 million investment was meant to be used during the first six years.
The concession contract also requires an additional $55 million in investment from the state to build a fishing, industrial and tourist port.

Manta, a major city for Ecuador’s tuna industry, is located in the western-most part of Ecuador’s Pacific coast.

Ecuador is seeing a progressive deterioration in foreign investment. Correa, a leftist economist who took office in January 2007, has constantly clashed with foreign companies.

According the latest official data, in the third quarter of 2008, foreign direct investment in Ecuador totaled a net $299.6 million.