Engineer Eulogio Santaella writes in Hoy newspaper that the Dominican government signed an open costs contract with Odebrecht, which means the country is most likely to lose in the arbitration meetings scheduled in a New York City. Odebrecht is requesting an additional US$708 million to finish the coal-fired power Catalina plant under construction in Peravia province.
Santaella says that the Medina government contracted the power plant to the sole-bidder, Odebrecht for US$1.94 billion. He observes, Technimont, part of the consortium that together with Odebrecht is building the plant, had shortly before contracted a similar power plant, the Porto do Pecem, for US$910 million in Brazil.
The Odebrecht demands for the government to cover the additional costs was made on 6 July 2017, just days after on 30 June 2018, the Medina administration went public with the reports of a commission named to look into the details of the project. The Medina government excluded the Catalina power plant from Attorney General’s corruption investigations after a New York Court revealed Odebrecht had paid US$92 million in bribes to Dominican government officers to move the Brazilian company’s contracts through the state pipeline. The Attorney General early in 2017, fast tracked through the judicial system an agreement whereby it reneges from suing Odebrecht.
In the opinion published in Hoy, Santaella writes that President Danilo Medina signed a badly structured “turnkey and open price contract” with Odebrecht granting the company unlimited rights as a contractor, instead of a “fixed price turnkey contract (lump sum turnkey). He says this opens the doors for Oebrechts to demand the payment of additional costs and the New York arbitrage.
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Hoy
30 January 2018
