Peru to set Odebrecht deadline for handover of pipeline assets

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Tuesday, September 26, 2017

Peru's government will set a deadline for a consortium led by scandal-plagued construction firm Odebrecht to hand over assets from the canceled US$7bn southern Peruvian natural gas pipeline project, energy and mines minister Cayetana Aljovín said.

The government will solve the impasse involving the Brazilian company and partners Enagás of Spain and Peru's Graña y Montero (GyM) this year, said Aljovín, according to state news agency Andina.

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Odebrecht, which in December admitted to paying hundreds of millions of dollars in bribes to secure contracts across Latin America, has been involved in Peru's largest infrastructure projects including the gas pipeline, the Olmos and Chavimochic irrigation ventures, the inter-oceanic highway (IIRSA) and power plants.

The government, which scrapped the pipeline contract and executed a US$262mn guarantee in January, had hoped to put the project up for bids again in the first quarter of 2018. The consortium had completed 37% of the 1,100km project at the time.

"The assets of the concession haven't yet been handed over ... due to disputes within the consortium members .... To put together the new concession, we need to have the transferred assets," Aljovín said at a conference in Lima. "We're going to give them a deadline and I hope the issue is solved soon. If not, we're going to take corresponding measures."

President Pedro Pablo Kuczynski in March ordered Odebrecht to pull out of Peru after the company admitted to having paid at least US$29mn in bribes to Peruvian officials from 2005-14. Peru awarded Odebrecht US$16.940bn in 23 contracts from 1988-2015.