Odebrecht-Acciona secure Quito metro contract

Brazil's Odebrecht and Spain's Acciona will build the second phase of Ecuadoran capital Quito's first metro line, state firm Metro de Quito said in a statement.

In July 2014, the two firms offered the lowest bid out of four prequalified groups that submitted proposals, although the project was stalled as the offers came in above the original cost estimates.

Quito has struggled to secure financing for the project, and mayor Mauricio Rodas had written to President Rafael Correa asking for the government to plug the funding gap, which it refused to do.

At the time, Rodas estimated the shortfall at between US$490mn and US$852mn.

Eventually the two agreed that Ecuador's central government would provide sovereign guarantees for a Quito debt issue, in addition to negotiating lower project costs with Odebrecht, Acciona, Quito and multilateral financiers who are backing the project.

Although Odebrecht is a target of Brazil's Lava Jato corruption investigation, Metro de Quito general manager Mauricio Anderson dismissed any possibility of irregularities related to the company's participation in the metro project, saying the multilaterals involved had vetted the tender process exhaustively, Reuters reported.

Estimated at US$1.5bn, phase II involves a 22km underground line with 13 new stations.

Completed in April, phase I was awarded to Acciona and consisted of the La Magdalena and El Labrador stations.

The full subway system is estimated to cost US$2bn, Metro de Quito said.

Latin American development bank CAF, IDB, the European Investment Bank and the World Bank are the principal financiers.

The contract for phase II is to be signed within 60 days, allowing time for Odebrecht and Acciona to establish an in-country presence and secure the guarantees needed as outlined in the tender rules, Metro de Quito said.