The facility in the southern Brazilian state will have capacity for 420 inmates.
A previous tender offer launched last year that sought to attract 100% of the firm's free-float shares did not manage to attain its acquisition goal.
Authorities stated that works on the US$78mn project, which has just started a trial period, will not be affected by the suspension, and that the operating contract is still expected to be awarded by May.
After shrinking 6.1% in 2015 and 7.6% in 2016, the volume of services provided in the transport and warehousing segment grew 2.3% in 2017, according to an industry group.
The amount destined for the Caribbean nation represents two-thirds of all resources awarded by the US government for disaster recovery and mitigation efforts.
The legal, technical and financial structuring of the southern stretch of Bogotá's western longitudinal avenue (ALO Sur) was filed with the country's finance ministry. The works entail a 24.3km, four-lane road in the southwest of the city.
This figure represents a third of the projects funded by the bank in the country. Overall, CAF plans to invest US$700mn in Argentine infrastructure with the aim of reducing transportation costs.