Carrix, formerly known as FRS Service Companies, Inc., is the parent company of SSA Marine, formerly known as Stevedoring Services of America. Established in 1949, SSA Marine is the world’s largest privately held container terminal operator and cargo handling company, operating 10 container terminals and approximately 60 non-container port facilities worldwide. Carrix also owns RMS, an operator of 40 rail terminals across the United States, and Tideworks Technology, a software provider for marine terminals.

IFC has a long-standing relationship with Carrix, having first financed SSA Marine’s Manzanillo International Terminal (MIT) operation in Panama in 1994 and then financing MIT’s expansion in 2000. IFC also financed the San Antonio Terminal Internacional S.A. project in Chile in November 2001 in which Carrix is a 51% shareholder. In addition, IFC is currently preparing the legal documents to finalize a $15 million A loan for San Vicente Terminal Internacional S.A., a medium sized port in Chile which is 50% owned by Carrix.

Total project cost is estimated at $127.3 million. IFC''s proposed investment consists of a loan of up to $45 million for IFC''s own account. Citbank N.A., is providing the remaining financing in the form of a 5-year term loan. The Citibank financing is currently being syndicated to other commercial banks.

45.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	45.0
Equity

* These investment figures are indicative

The four project sites are located in Mexico; Manzanillo Container Terminal in the Port of Manzanillo, Port of Veracruz, cruise ship terminal in Cozumel and a cruise ship terminal in Progreso. Manzanillo is located on the Pacific coast of Mexico in the state of Colima. The Manzanillo Terminal currently has 500 meters of contiguous container berths equipped with two Post-Panamax and two Panamax ship-to-shore container cranes. In addition, there is 13.3 hectares of paved container yard. The minimum draft available at berth-side is 14 meters.

The Port of Veracruz is located in the gulf of Mexico in the city of Veracruz . The facilities operated by TMM PyT in the Port of Veracruz consist of covered auto storage facility with a capacity of 4,400 vehicles and several open storage areas with an additional capacity of 8,400 vehicles. In addition, TMM PyT also provides stevedoring services for bulk and break-bulk cargo at the public berths in the Port of Veracruz.

The cruise ship terminal in Cozumel is located about 6 km south of town of San Miguel, the main town in the island of Cozumel in the state of Quintana Roo. The pier is L-shaped with external docking length of 311 m (draft of 11 m) and internal docking length of 276 m (draft of 10 m) with a width of 11.8 m. There is also a commercial area next to the pier consisting of 3 buildings with a total covered area of about 4,000 sq. m. The commercial areas consist of various tenants including a duty free shop, several vendors for gifts, an internet café, restaurant and bars.

The cruise ship terminal in Progreso is located within in the port of Progreso in the state of Yucatan. The pier has a length of 330 m and a draft of 10.5 m. In addition, there is a pier for ferries which measures 150 m in length. There is also a commercial area next to the pier consisting of one main single-story building with a covered area of 1,886 sq. m. consisting of shops and a restaurant. Part of this building also houses customs and immigration facilities.

The project is in line with Mexico’s efforts to improve the quality and efficiency of infrastructure services. Container traffic at Mexican ports grew an average of 15.5% per annum from 1995 to 2002. The Port of Manzanillo is Mexico’s largest container port on the Pacific Coast and accounted for 40.6% of all containerized traffic in Mexico in 2002. TMM PyT itself handled an estimated 28.0% of all containerized traffic in Mexico in 2002. IFC’s proposed investment will support the expansion of Carrix’s commitment to the Mexican port sector through its acquisition of a controlling interest in TMM PyT. The proposed financing would strengthen the financial structure of the Borrower (and thereby TMM PyT) and its capacity to make necessary investments to expand the Manzanillo terminal (expansion of berth and yard area and acquisition of container handling equipment) in the medium term so as to remain competitive with newly developed container terminals in the region. This additional investment would help to:

- further reduce the cost of transportation and thereby benefit shippers, shipping lines and consumers alike,
- encourage other ports in the region to increase their own efficiency and, therefore, serve as a catalyst for increased trading activity in the region; and
- result in more revenues (port fees) to Mexico and additional employment and upgrading of workers’ skills. Finally, IFC’s investment will support an increased role of a top international port operator who remains active in developing countries at a time when many private infrastructure sponsors are withdrawing from these markets.

IFC will provide long term financing which is otherwise not available from the commercial market. The current difficult international market conditions limit access to external long-term private financing available to project sponsors. Carrix invited IFC to the project because of the positive experience with prior investments and because of IFC’s successful experience in structuring financing for port projects worldwide. IFC’s financing will lengthen the debt maturity profile of the Borrower (and indirectly TMM PyT), effect a more sustainable capital structure, thereby reducing the refinancing risk of the Borrower and allowing TMM PyT to make necessary investments in the medium term. The repayment terms of IFC’s loan financing will be tailored to the requirements of the Borrower, taking into account the shorter terms available from commercial lenders.

In addition, IFC’s support for the acquisition of a controlling interest of TMM PyT by Carrix will provide the following benefits to the four terminals operated by TMM PyT:

- as a 100% owner, Carrix can be more proactive in decision making and help direct the terminals’ expansion to combat competition from other ports;
- as an experienced international operator, Carrix can instill best practices to further increase the terminals’ efficiency;
- given Carrix’s reputation for providing efficient services, more shipping lines will be attracted to the terminals operated by TMM PyT; and
- Carrix can use its purchasing power to negotiate lower prices with major contractors and equipment suppliers and reduce the expansion costs for the terminals. The lower expansion costs will in turn be passed on to the users of the terminals and increase the terminals’ competitiveness.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and terminal site visits by IFC staff. The following potential environment, health and safety impacts of the projects were analyzed.

- Environmental, health and safety management;
- Maintenance dredging and dredge spoil disposal;
- Stormwater management;
- Oil/hazardous materials storage and handling;
- Liquid, solid and hazardous waste disposal (including waste oils and other maintenance wastes);
- Ship support operations (such as sewage disposal, bilge waste effluent disposal, and fueling services);
- Handling and storage of dangerous cargoes;
- Emergency response planning and preparedness; and
- Employee health and safety (including training).
Location of environmental documents In locally affected community
The environmental documents will be made available at the following locations:

- Cozumel Branch office of Administración Portuaria Integral de Quintana Roo, S.A. de C.V.
Cozumel, Quintana Roo

- Manzanillo Main office of Administración Portuaria Integral de Manzanillo, S.A. de C.V.Av. Teniente Azueta No. 9 Col. Burócrata C.P. 28250 Manzanillo, Colima Tel. (52) 314-3311400

Progreso
Main office of Administración Portuaria Integral de Progreso, S.A. de C.V.
Calle 32 entrada muelle fiscal lado poniente
C.P. 97320
Progreso, Yucatan

Veracruz Main office of Administración Portuaria Integral de Veracruz, S.A. de C.V. Av. Marina Mercante 210, 7º Piso, Centro. C.P. 91700 Veracruz, Veracruz