The Chamber of Deputies voted in favor of the US$17.2 million loan to Ingetec Europa, a previously unknown Spanish company that has no past experience building signs or road protection barriers. The loan was approved at 3 am on Tuesday, 30 December, despite the staunch opposition of most PRSC and PLD legislators.
El Caribe newspaper, which has been following the story, reports that the company lists the same address as that of other Spanish companies that the Mejia administration has favored with million-dollar purchase contracts to be funded by loans from Spanish commercial banks.
A local sign builder said that Ingetec Europa will be installing Spanish road protection barriers at three or four times the cost that could be secured with local companies. The government, which did not hold a call for tender to select the contractor for the project, had already negotiated a US$20.9 million loan with CCL Peninsular earlier for the installation of road protection barriers and signs. Coincidentally, CCL Peninsular is located at the same Madrid address (Paseo de la Castellana 140) as Ingetec Europa.
Alejandro Montas, president of the public works commission of the Chamber of Deputies, estimates that the government will pay US$10 million more for the road-security project than its real value.
El Caribe newspaper also reported that the project is even more anomalous because it was passed without the signature of any authorized executive of the BBVA bank, which is issuing the loan. The only signature on the loan is that of Technical Secretary of the Presidency, Rafael Calderon.
Furthermore, the short-term loan is being taken on at high interest rates for low-priority items, and without the authorization of the Ministry of Finance, it is in violation of the government?s own announced borrowing policy.
In an editorial, El Caribe says that the ignominious contract is the first test of fire of the confidence that ensued the Pact for Macroeconomic Stability, signed by the government and the business sectors, whereby the government commits to control its spending.
