Cosco Reduces Chancay Megaport Investment to $789 Million

Here’s a breakdown of the key data from the ⁤provided text, focusing on the⁢ changes to the Cosco Shipping Ports Chancay Perú project and its VAT benefits:

Core Issue: Modification of Investment Commitment & VAT Benefit

* The Peruvian government has modified a rule (Article 2 of Ministerial Resolution No.555-2017-MTC/01.02) related to Cosco Shipping Ports Chancay Perú’s access to the ‍ Special Early Recovery Regime of the general sales tax (IGV) – a VAT benefit.
* This benefit allows the company to get⁢ a faster refund of VAT paid during the pre-operational phase of the project, lowering financial costs.

Key Changes with the new Resolution:

* ⁣ Reduced Investment Commitment: ⁤The required ⁣investment commitment has been reduced from US$1,213 million to US$789.6 million (a cut⁢ of over US$423⁣ million).
* Unchanged Project Timeline: The project’s execution time remains the same: 10 years, 7 months,⁢ and 11 days (starting from October 20, ⁤2014).
* Reason for Change: ‍ The modification stems from the Fifth Addendum to Modify the Investment Contract signed ‍in December 2023.Cosco Shipping Ports Chancay Perú requested the reduction in investment commitment and an ⁤update to the execution schedule.

Cosco Shipping Ports Chancay‍ Perú’s Explanation:

* The resolution regularizes the investment amount executed during the construction phase.

* The VAT benefit doesn’t apply ⁢ to‍ the operational phase.
* The adjustment is not related to later stages of the project.

* The total investment ⁣in the current stage is approximately US$1.3 billion. The difference between this and the US$789.6 million‍ recognized in the resolution represents investments that don’t qualify for the early VAT recovery.

in essence, the government has⁢ adjusted the amount of investment eligible for the accelerated VAT refund, but the overall project timeline and total investment remain largely unchanged. The company clarifies that the reduction ⁣is an accounting adjustment related to wich ⁤investments qualify for the specific tax benefit, not a scaling back of the project itself.