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Concession controversy in Lazaro Cardenas

Concession controversy in Lazaro Cardenas

The resulting acrimony on both sides led to the government stating it was their port and they could do what they liked with it, while HPH stated that it was initiating a legal appeal against the decision and reviewing its investment in the second-phase expansion of its existing, and highly successful, Lazaro Cardenas Container Terminal (LCT1)

At the beginning of January this year it was announced that the partnership of APM Terminals and CONOIDSA, a subsidiary of Mexican construction firm ICA, was the winning bidder of the 32 year concession to design, finance, construct and operate the second container terminal (TEC 2) in Lazaro Cardenas. The first phase would comprise an investment of more than US$300m to build a 650 m quay two berth terminal with operations scheduled to commence in Q1 2015.

Many observers believed that the problem had been solved, but it was then learnt that the appeals court had ruled against the validity of the tender and ordered the indefinite cancellation of the TEC 2 concession.

As a result of the judgment, the API launched an appeal and the signing of the new concession was halted until the complaints filed by HPH were resolved. A source at APM told CM that the resolution of these legal issues are for the Transport Ministry (SCT) to resolve and that APM has no part in the proceedings.

In the meantime, SCT has confirmed to both sides that there is no exclusivity for operators in Mexican ports and although the signing of the contract for TEC 2 had been suspended, it had not been cancelled.

The latest position is that both sides are continuing to monitor the situation while waiting for the SCT to resolve the legal challenges. APM Terminals has said it is ready to continue the process and make all its agreed investments as soon as the API notifies it that the suspension has been lifted.