Lazaro_Cardenas_FVL_webAmports president Steve Taylor has hotly contested suggestions his firm will be obliged to leave the Mexican port of Lázaro Cárdenas, despite the recent decision to grant SSA Mexico the concession for the Specialist Automobile Terminal (TEA) there.

Guillermo Ruiz de Teresa, the ports and merchant marine coordinator of Mexico's Transport and Communications Ministry (SCT), last week voiced support for the decision to give the concession to SSA.

“Three companies took part in the concession: the Pasha Group, Amports and SSA,” he told the local press in Mexico. “I understand that SSA won because it offered more direct investment, a lump sum of 120m pesos ($6.34m) and a minimum of 12.5m pesos ($660,000) per year of fixed compensation, plus $3.00 per vehicle [handled].”

He added that Amports had paid only a dollar per car and had being doing so for four years.

Ruiz de Teresa also indicated Amports had only been able to continue handling cars in Lázaro Cárdenas after the concession award because of a legal case being brought by the Pasha Group against the port authority (API). This was resolved in December 2015 when Pasha dropped its action. The case was based on the premise that Amports had been given the right to operate even though it had failed to comply with 14 requirements of the bid, he said.

The minister claimed Amports would not now be able to renew its existing agreement with the port authority and would have to cede the area where it currently operates to SSA.

Amports president Steve Taylor, however, has said his company does not intend to leave the port.

“We have a legal stay that allows us to continue operating there pending a court's review of the situation. That is ongoing,” he said.

“In the concession awarded to SSA, they were not granted exclusivity of operation at Lázaro Cárdenas. During the bidding process, we queried this and were told that the winner of the concession would not have exclusive rights,” he stressed.

Taylor also disputed the claim that Amports had offered just $1 per vehicle. “It is absolutely incorrect to say that. The terms and conditions of the tender mandated that bidders offer no less than $3.00 per vehicle. Everybody had to bid at least that,” he told Automotive Logistics.

Amports has further disputed the suggestion that SSA's bid was the most competitive, claiming that the initial economic value of its own bid, at $40m, was substantially more than either of the other two. “They chose a bid that was 40% less than what we offered,” claimed Taylor.

OEMs, he suggested, were now distinctly cool about the prospect of a monopoly provider becoming established in the port, since service quality could fall and prices could rise.

“Lázaro Cárdenas is very important to us,” he added. “We currently do business with 12 OEMs there and just want the opportunity to compete fairly.”

SSA Mexico’s automotive division director, Pablo Chico, said there was no question that the company was granted exclusive rights at the port and said he welcomed competition on equal terms. He said the reason SSA was granted the concession was simply that it was the only operator to meet the full requirements of the bid.

It is easy to see why everyone wants a bit of Lázaro Cárdenas. The facility is initially expected to handle up to 400,000 units annually with a second phase of development potentially expanding that to 750,000 units. Currently, the port handles around 350,000 units a year but the extra capacity will be needed as car production in Mexico is expected to rise from 3.4m units to 5.3m units by 2020, with five manufacturers due to start up new operations.