UPDATE 1-No bids in Portugal's tender for Sines container port terminal

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LISBON, April 7 (Reuters) - No bidders have emerged for a contract to create a new container terminal at Portugal’s Sines port, its head said on Wednesday, citing the impact of the COVID-19 pandemic on a tender that had drawn political attention from Washington and Beijing.

Portugal launched the tender in Oct. 2019 to build and operate the terminal in the deepwater port, continental Europe’s closest to the Panama Canal. The bidding deadline was set for April 6 following a postponement from late 2020.

“Naturally, we are aware that this pandemic context is not the best for a tender of this nature,” Jose Luis Cacho, president of the administration of the Ports of Sines and Algarve, told Reuters to explain the absence of offers.

“There is a whole set of situations that did not favour the moment.”

Cacho said 52 entities - including operators, financial companies and law firms - had expressed interest and had access to the tender documents.

The port had advertised the concession to the main operators in China, the United States, South America, various European countries and Israel, he said.

Two sources with knowledge of the process, who declined to be identified, said the pandemic had shown that the tender rules needed to be improved to increase the profitability of the project and reduce long-term risks to private investors.

“There may be a need to open a new tender, with improved rules, but this is a decision for the (Portuguese) government to take,” Cacho said.

The U.S. government has been interested in the port due to its strategic position for exports of liquefied natural gas (LNG) to Europe, while expressing concern about Portugal being one of Europe’s biggest recipients of investment from China in the past few years.

Beijing and Lisbon have a memorandum of understanding on cooperation on Beijing’s belt and road initiative, which promotes expanding land and sea links between Asia, Africa and Europe.

According to Portuguese newspaper Publico, Chinese giants such as state-owned Cosco and Shanghai International Port Group had expressed an initial interest in expanding the port. (Reporting by Sergio Goncalves; Editing by Andrei Khalip and Jan Harvey)