The Corozal Port Project- An Update

Corozal Port. Image

Corozal Port. Image

Finally, the Corozal port project is beginning to take shape. Despite opposition has presented this work by some political representatives in the National Assembly and some port agents, the Panama Canal Authority (ACP) hopes to accelerate the process of this new port terminal in the Panamanian Pacific, which has received to date the interest of 11 port operators in the pre-qualification stage companies, which closes on 29 January.

Ricardo Ungo, section manager business development for the ACP (autoridad del Canal de Panamá), explained that the draft of Corozal Port Project Bill was intended to give the company winning the bid to enjoy the same tax exemptions enjoyed by other operators from other terminals in the country. “This would provide equal competitive conditions,” says Ungo.

The law, which will have to be submitted by the Executive to the National Assembly (Asamblea Nacional), includes provisions for at least eight tax exemptions that the ACP requests to benefit the port operator, including an exemption from paying income tax, and an import duty on all equipment for the port complex. Also to be exempted is the tax on transfer of movable goods and provision of services (ITBMS) on equipment for the port complex.

Another exemption has to do with the tax payment of dividends from the activities covered by the respective contracts and the exemption from payment of the annual tax notice of operation, among others. There is a debate as to whether this development should receive so many tax benefits. The last word will come from the National Assembly, where the important detractors and supporters of the project battle it out.

The Port of Corozal requires an investment of between $ 800 million and one billion dollars for the construction of infrastructure on more than 2,000 linear meters of docks, container yard and superstructures that have the capacity to handle more than 5.3 million TEUs (containers measuring 20 feet).

In the first year of operations the State receives a contribution of 25 million dollars for this project and throughout the award more than USD$ 100 million.

The project will be built in two phases, the first with capacity to move 3.2 million TEUs and the second with 2 million TEUs. In the construction phase will generate 2,000 direct jobs and 100 at the stage of operation, according to the Panama Canal Authority.