The Proposition
AMEGA is a special purpose project company whose mission is to deliver strategic logistics to Costa Rica. AMEGA intends to build a new, highly secure, high velocity container Transhipment Terminal, to be known as the Transhipment Megaterminal of the Atlantic (MTA). It will be located in the Port of Moin in the province of Limon on the Atlantic Coast of Costa Rica.
The MTA has been conceived to be the first phase of the Interoceanic transfer corridor known as the Costa Rican “Dry Canal”.
The MTA will operate initially as a stand-alone transhipment port, hence generating substantial revenues towards the financing of the subsequent development of a similar port on the Pacific coast and a high-speed railway dedicated to transporting shipping containers between the two terminal ports.
The combination of the high-capacity transhipment ports linked by rail would constitute a “Dry Canal” that will end the near monopoly in sea container transit enjoyed by Panama for over 110 years.
Both the MTA and, ultimately, the Dry Canal will be dedicated to serving the needs of the largest container ships currently in service or contemplated. Due to the size of these vessels, they cannot dock in most Eastern North American, Caribbean or South American ports, neither can they transit the expanded Panama Canal.
This is the fundamental unique proposition of AMEGA, opening a new major route for world trade and unlocking exciting opportunities for investors, maritime transport and the operators of the terminal ports and the linking railway.
For the liner companies, it will open up routes hitherto inaccessible to very large container ships, enabling them to realise the significant competitive advantages in efficiency and operating costs that such vessels provide.
Current Status
The MTA has been presented as a Concession through a Private Initiative under Costa Rica’s laws and regulations, which formally define four stages between conceptual definition, construction, and operations:
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Postulation.
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Proposition.
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Public bidding resulting in the Grant of Concession.
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Operation of the Concession - Construction and long-term Operation.
AMEGA has spent 20 years on this project, since the earliest Dry Canal concepts and stages of planning, and has invested over $55 million to date, which is protected by a Government Guarantee. AMEGA is now seeking new partnerships to drive the Project forward to its successful completion.
AMEGA successfully completed the Postulation stage for the MTA and obtained exclusive rights to complete the Proposition and take the project to Public Bidding phase.
Historical Background
The development process began in 2004, when AMEGA CEO, Aubrey de Young, was introduced to the leading British port consultancy, Scott Wilson, in London.
Following initial negotiations, work began on feasibility studies in 2005.
Consideration was given to siting the Dry Canal in Panama, as there was uncertainty as to whether the proposed Panama Canal Expansion would proceed, and it was clear that additional transit capacity was needed.
In order to avoid a potential conflict with the APC (Panama Canal Authority) expansion initiative, it was decided that the Dry Canal should be located in Costa Rica, where the physical conditions and legal framework were seen as uniquely favorable for such a private initiative and where such a project has been proposed and debated over many years.
Scott Wilson’s initial appraisal concluded that the scale and technical diversity of the project called for the establishment of a special purpose joint-venture with Halcrow, another leading UK consultancy, bringing world-class specialist expertise and experience in the rail sector. The joint venture was duly established as “Trans Costa Rica Consultants” (TCRC).
TCRC began work at the end of 2005 on the assessment of alternative rail route options in Costa Rica. This assessment identified four potential rail route options (A,B,C and D). The options are heavily constrained by track gradient and curvature limits for heavy high speed freight trains and by the need to avoid national parks and other environmentally vulnerable areas. “Route D”, which crosses the Central Cordillera mountains at their lowest, close to the Nicaraguan border, was the preferred option, as shown below:
The process of rail route selection was followed by a detailed project appraisal report and indicative cost estimates. These were presented to AMEGA as “Technical Memorandum No. 1, Route D Costing Studies” in
April 2006.
It is important to note that the Panama Canal Expansion was given the go-ahead, contrary to shipping industry expectations, whilst the Route D memorandum was under preparation. It was clear that the decision to proceed with a new set of locks and other navigational improvements to the Panama Canal would fundamentally change the market for the Dry Canal. Therefore, it was decided that TCRC should proceed with market studies, with their in-house business consultancy expertise complemented by international shipping expert reviews.
The results appeared in “Technical Memorandum No. 2, Market Report” in October 2006. This report concluded that the Panama Canal Expansion would enable the Canal to cope with predicted demand growth for several years, thereby delaying the inter-oceanic market opportunity for the AMEGA Dry Canal. However, the report also identified a serious shortfall in transshipment capacity in the Caribbean and pointed out that the proposed site of the Dry Canal terminal at Moin was favorable for a transhipment port. It was recommended, therefore, that AMEGA should develop a transshipment port at Moin (Mega Terminal of the Atlantic - MTA) to be converted to serve as an intermodal transfer terminal for the Dry Canal as and when needed.
AMEGA accepted this recommendation and initiated the first stage of the Costa Rican process for private initiatives the “Postulation” stage. The Postulation submission for the MTA was submitted to the Consejo Nacional de Concesiones (National Concessions Council or CNC) in 2007. The Postulation of the MTA Private Initiative Project was approved in 2008, and the Project was declared to be of Public Interest. It was the first ever private initiative postulation to be approved in Costa Rica. The approval of the postulation granted AMEGA the exclusive rights to complete the private initiative and to obtain reimbursement of its investment in development costs if the concession were to be granted in public bidding to another bidder.
The period from 2008 to date has seen different Costa Rican Presidential administrations come and go, some positively inclined to AMEGA, others less so. From 2008 until 2014 the Government decided to concentrate its efforts on the TCM project, an import-export terminal for which a concession was eventually awarded to APM Terminals.
However, AMEGA advanced significantly over this period, developing with the Government the protocols and procedures for the execution of the private initiative Proposition stage. From 2014 until 2022 AMEGA had to confront two administrations that were distrustful of the participation of Private Sector in the development of major national infrastructure projects, but the resistance was eventually overcome by the merits of the project and its beneficial effects on the economic prospects of Costa Rica.
As a result of years of perseverance and patience, all the preparations had been completed by 2021, special regulations had been issued to govern the execution of proposition phase, the scope and cost of the first critical route in the postulation studies had been approved and the project was ready to go into its final phase before public bidding. The Government only needed to resolve a few technical and legal issues and complete the line-up of its team to act as its counterpart in the Private Initiative process.
Regretfully, the political cycle of Presidential elections interrupted these activities and impeded completion of the order to start work on the Proposition phase studies.
At the start of the Chaves Administration in 2022, the support of the authorities was unanimous and enthusiastic, but by 2023 the Government had made an unexplained shift and decided arbitrarily to stop the Private Initiative process.
AMEGA filed for review and reconsideration of the decision with ample legal and factual basis, but it was summarily dismissed in 2024 by the Government under an unsustainable formalistic pretext and with no actual motive. AMEGA has filed for judicial review of this decision and is confident that, either through the objective revision of the highly trusted Costa Rican judicial system, or by the reasonable review of a new administration, this situation will be reversed and the proposition phase will be started.
The market predictions made by TCRC in 2006 have proved correct. Over the 19 years that have elapsed since then, the Panama Canal has managed to handle the growth in traffic, albeit with great difficulty in recent years.
It is now widely acknowledged that the Panama Canal has reached its ultimate capacity. Transits suffer lengthy (and expensive) delays and navigational restrictions under the low water conditions that are expected to become more frequent as a result of global warming. Furthermore, it cannot (and never will be) able to handle the largest container ships currently in operation, let alone the even larger vessels that are now coming into service in order to meet efficiency and environmental requirements.
Next Steps
AMEGA and its Partners now have a unique opportunity to work with the incoming Costa Rican administration, not only to resume the process of developing the MTA as a transshipment terminal, but also to initiate a separate private initiative process towards the development of the full Dry Canal.
In order to meet these objectives, AMEGA now seeks new partnerships with investors and operators having the corporate stature and resources necessary to carry through to completion a world class project of this scale and complexity.
Long-Term Competitive Advantages
AMEGA´s MTA Postulation submission has been approved by the Government of Costa Rica, giving AMEGA key rights:
i. Exclusive right to lead the MTA project through the Proposition and Bid phases; and
ii. Pre-Qualification to bid for the 30-year MTA operating concession.
iii. The right to reimbursement of development costs in the unlikely event of the concession being awarded to another bidder.
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The AMEGA MTA Project, as approved in its postulation by the Government of Costa Rica, conceives the Terminal as the port handling all Transhipment Cargo of the Atlantic Coast of Costa Rica, with a marginal allowance of up to 10% for import and export cargo for an initially proposed 30-year period.
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The final approval of the proposal and the granting of the concession for the Building and Operation of the MTA will provide AMEGA with a privileged position to continue the development of the overall Dry Canal concept, filing for the postulation of the Pacific Terminal and the rail link.
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The AMEGA Dry Canal will provide secure, high velocity, long-term transit capacity for containers across the Isthmus, thereby freeing global trade from the bottleneck imposed by the increasingly severe limitations of the expanded Panama Canal.
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The Dry Canal can be interlinked to Panama in the South and the rest of Central America in the North making the project of very significant importance to the region and may also include other forms of transhipment of goods, data and services along the main trade artery.
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The AMEGA MTA will operate within a Free Trade Zone (FTZ) and be under a Free Trade Zone Regime, which will facilitate investment agency support and fiscal benefits for the MTA and the Dry Canal operations.
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The availability of important sources of renewable energy in Costa Rica makes it possible to consider clean energy incentives. Furthermore, the overall impact of the project on the carbon footprint of the global maritime transport industry may well make it eligible for Green Funds concessional finance.
Contact us
Jose Dengo
Vice President, Costa Rican Operations
email: jdengo@amegasa.com
WhatsApp: +506 8849 9802
