Costa Rica
Press Release

Costa Rica: RECOPE archives millionaire project «Pacific Terminal»

Bnamericas Published: Friday, September 23, 2022
Costa Rica: RECOPE archives millionaire project «Pacific Terminal»

This Recope release was published using machine translation.

In a responsible and unanimous manner, the new Board of Directors of Recope made the decision not to continue with the Terminal Pacífico project, an initiative developed in the previous administration; because it would imply that Costa Ricans would have to pay more than 200 billion colones, in an irresponsible and unjustified way.

The decision was made after a rigorous analysis carried out by the new Recope administration. Among the conclusions reached by Recope are:

  • From the financial point of view, the project is never profitable, inefficiency that would have had to be transferred to the rates, which is unacceptable.
  • The financial analysis of the project is insufficient, an aspect that prevents calculating the tariff effect and even exceeded the spending and investment limits allowed by the fiscal rule.
  • The project was based on an increase in the LPG subsidy that gasoline and diesel consumers would have had to pay.
  • From an efficiency point of view, the project starts from an underuse of 76% of the infrastructure, which is clearly unacceptable.
  • Despite the fact that the country, at this time, makes about 50 annual shipments of gasoline and diesel; the project intended to receive only three (3) annual shipments.
  • There is evidence of a disproportion between the cost of the project and the demand to be satisfied, since the project would have represented a third of the assets that Recope currently has, to satisfy 3% of the total demand for fuels.
  • The analysis is based on an incorrect estimate of fuel demand at the national level, which did not even consider the effects of public policy and the environmental commitments that the country has assumed.
  • The project was evaluated independently, without comprehensively considering the investment needs required by the country to guarantee energy security.

Juan Manuel Quesada, president of Recope, commented that “as was our commitment in this new administration, Recope is not willing to support investments where there is no certainty of its results, that is why we decided to bring this project down. For us, it is unacceptable to charge Costa Ricans with inefficiencies that are later transferred to the rates and that everyone ends up paying for, as happened in the past.”

  “We are not going to allow bad decisions to be paid in fees, because we know that for Costa Ricans every colon counts. We are clear that we came here to serve Costa Rica and, therefore, we are acting with total responsibility”, Quesada pointed out.

What was the “Pacific Terminal” project?

The project called "construction of the Pacific terminal for receiving ships and storage at the Barranca campus" , was promoted by the previous administration, which consisted of the construction of an infrastructure to unload fuels into the sea and transfer them through pipes to storage tanks. on the Pacific coast, whose cost, originally, could amount to 200 billion colones.

For context of what this project could have cost, with that amount more than 20,000* social welfare homes could be built and benefit more than 70,000 people in extreme poverty.

*Source: Ministry of Housing and Human Settlements (MIVAH)

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