The site of the future deepwater port (Ecuador Defence Ministry)

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Dubai’s ports giant to build Ecuador’s first deepwater harbour

9 June 2016 | By GCR staff | 0 Comments

The government of Ecuador has awarded a Dubai-based port operator a $1.2bn contract to build a deepwater port on the site of the fishing village of Posorja near the mouth of the Guayas River.

DP World has agreed to construct the port on a build, operate, transfer (BOT) basis. The company will make an initial investment of $500m to buy land, dredge an access channel and build a 20km highway between Posorja and Guayaquil, the largest city in Ecuador.

When complete, the port will have a depth of 15m and an initial capacity of 750,000 containers a year. When fully built, this will increase to 2.5 million.

In return for its investment, DP World will run it on a 50-year concession. Construction is expected to begin in six to nine months and take 24 months to complete.

The decision has been controversial in Ecuador, as the government awarded the contract by direct hire, rather than going through a competitive bidding process.

Contencon, the company that has run the neighbouring container terminal at Guayaquil since 2007, has threatened to take legal action against DP World for unfair competition. Contencon is a subsidiary of Philippine port operator International Container Terminal Services.

Ahmed Bin Sulayem, the chief executive of DP World Group, said: “We’re delighted to extend our South American footprint with a major investment in Ecuador. The additional value it will bring to the economy is compelling, increasing competitiveness through the provision of modern container terminal services in central Ecuador.”

One of the principal exports of the new port is likely to be bananas: Ecuador is the largest exporter of that fruit in the world.

The presence of the port is likely to benefit the population of Posorja, where the fishing industry has declined as a result of pollution and the use of factory trawlers. Unemployment in the area is running at 60%.

Photograph: The site of the future deepwater port (Ecuador Defence Ministry)