(Adds Navelena comment, project timetable)
BOGOTA, Aug 15 (Reuters) - Colombia awarded a 2.5 trillion peso ($1.33 billion) contract to a consortium led by Brazil's Odebrecht SA on Friday to improve navigability on the Magdalena River, which the Andean nation has long planned to exploit for cargo transport.
Odebrecht will have an 87 percent stake in the joint venture, called Navelena. Navelena was was the only bidder for the contract, which covers a 908 km (564 mile) stretch of the Magdalena, which flows north to the country's Caribbean coast from the southern interior. Colombian construction firm Valorcon holds the remaining stake in the joint venture, Odebrecht said in a statement.
The project, focused on building navigation channels in shallower stretches, will eventually add 6 million tonnes of cargo transport capacity to the river, which flows through the populous center of the country.
"This project is fundamental for the competitiveness of the country," Eleuberto Martorelli, president of Odebrecht in Colombia said of the 13.5-year contract. Construction is scheduled to commence in July 2016.
The Andean nation's steep terrain and poor roads make it hard for industries to compete in export markets because of the high cost of transporting merchandise to port. The Magdalena River, however, flows to Barranquilla, one of the country's main seaports.
The government will not have to pay for work and services until they are delivered, the statement said, adding that Navelena has received proposals from international and local banks to finance the project.
Jorge Barragan, the Odebrecht engineer in charge of Navelena, told Reuters it would take around 18 months to arrange finances for the project.
"Today there is a lot of industrial production in the interior of the country and what we hope is that Colombia will be more competitive with this project," Barragan said.
$1=1,884.45 Colombian pesos Reporting by Peter Murphy