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Shanghai Dredging Co risks losing Brazilian contract

Shanghai Dredging Co risks losing Brazilian contract

Santos: Shanghai Dredging Company (SDC) may end up losing out on a Reais199 ($106m) contract to dredge the port of Santos in Brazil from 13 metres down to 15 metres. SDC is part of the Draga Brasil consortium which won the prestigious contract - part of a Reais 1.4bn spend on dredging from President Lula's government in Brasilia - back in April of this year.

But now Brazil's Ports Minister Pedro Brito is threatening to tear up the contract and start the tender process all over again as Draga Brasil has not provided all the sufficient documentation to satisfy federal, state and municipal governments.
He said: "We are right at the limit of our patience. If we don't receive the documents very soon we will have to start the tender process all over again. I really don't want to do that."

However, a Seatrade Asia Online source in Santos said today that "efforts were being made to resolve the impasse" - which has been ongoing for more than a month - and that SDC and Draga Brasil may still be given the opportunity to continue with the contract, as long as they provide the necessary documentation within the next week.

Once completed Santos will be able to host vessels of up to 9,000 TEU capacity, as opposed to the 5,000 TEU maximum it can accommodate today and this will be  a tremendous boost to carriers like NYK Line, K Line, Mitsui OSK Line, Evergreen and China Shipping Company who all have a strong presence in the Brazilian international trades.

SDC is also interested in bidding for the Rio de Janeiro contract and two or three others in the Brazilian government's Reais 1.4bn National Dredging Plan.  [07/09/09]

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