A report in El Nacional reveals that the government has contracted or is about to contract teams of US lawyers for its representation in international arbitrage in the case of the Italian contractor Technimont of the Punta Catalina coal-fired power plant. Technimont is demanding an additional payment of US$720 million for over costs in the construction of the power plant, in association with Brazilian Odebrecht and Acero Estrella, a local firm.
As reported, the company could stop construction after the Medina government has not agreed to the additional costs, sources told El Nacional, as Administrative Minister of the Presidency Jose Ramon Peralta and the vice president of the Public Electricity Corporation (CDEEE) Ruben Jimenez Bichara have stated.
As reported, the government’s alternative is to pay high sums to lawyers to help resolve the impasse. A source told El Nacional that last week Jimenez Bichara and Hacienda Minister Donald Guerrero Ortiz traveled to Florida, USA for talks with other companies that could finish the construction and installation of the needed turbines, replacing Technimont.
Sources say that if Technimont wins in arbitration, the power plants would be costing the government around US$3 billion, making these the most expensive of their kind to be built in the world. The original contract signed between Odebrecht-Technimont-Estrella and the CDEEE established a turnkey price of US$2,040,757,399 and delivery of the power plant in 2018. So far, the government has invested US$1.74 billion in the power plants. Of the total, around US$1.5 billion come from loans and bonds placed on international markets.
El Nacional reports the conflict could delay the completion of the power plants so they may not up and running by 2020 when the second Medina administration comes to an end.
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El Nacional
8 November 2017
