A second port concession attempt for El Salvador’s La Union

The new deepwater terminal, the first modern container facility to be built in Central America outside of Panama, provides vessels with a natural haven from the Pacific Ocean. Its location requires limited diversion from the main shipping routes through a 22 km deep water channel that will be maintained by the Government while offering improved proximity to growing markets in the neighbouring countries of Honduras and Nicaragua over El Salvador’s first generation Port of Acajutla.

An initial concession tender for La Union issued under the old port law failed to attract any bids and until a few weeks ago, the government had been unable decide the precise conditions of the concession contract. However, on September 8, 2011 El Salvador’s congress passed a new law (which was subsequently ratified by President Funes) allowing the selection and concessioning of the La Union port to a qualified professional terminal operating company. The International Finance Corporation (IFC) has been retained by the Government of El Salvador to assist with the project preparation, investor outreach and transaction advisory services.

According to Enrique Cordova, president of CEPA, the Authority is now in the process of drawing up new tender documents that will allow more open privatisation with the expectation that a concession will be awarded by end 2012.