Colombia's EPM looks to recover $2.63 bln from dam contractors

by Reuters
Tuesday, 11 August 2020 17:57 GMT

BOGOTA, Aug 11 (Reuters) - Colombian public services holding company Empresas Publicas de Medellin (EPM) has started talks with contractors working on its Hidroituango dam project in a bid to recover 9.9 trillion pesos ($2.63 billion) in costs resulting from delays and technical problems.

The hydroelectric project, in Antioquia province, is considered the largest in Colombian history.

Construction of the 2,400-megawatt project began in 2010, but in April 2018 part of the infrastructure collapsed, forcing the evacuation of thousands of people and delaying the project's completion.

A consortia of designers, builders and auditors knew there were issues with the project during the construction phase, EPM said in a statement late on Monday.

"The recommendations, decisions and actions that were taken brought risks with them, ultimately leading to the collapse of the auxiliary diversion gallery," EPM said, adding the emergency forced management to take control of an unprecedented situation.

The consortia involved in the project are made up of Colombian businesses, though Brazil's Camargo Correa leads construction of Hidroituango.

The compensation sought corresponds to damaged machinery, payments on loans and interest, compensation to the 4,000 people affected, and lost profits caused by the delay, EPM said.

The project was forecast to cost 11.4 trillion pesos ($3 billion) and was expected to be brought online in 2018. Hidroituango is now projected to be fully operational in 2022.

EPM is a public company offering services in water, electricity and gas in Colombia's second city, Medellin, and more than 100 municipalities in Antioquia. It also has operations in Panama, Mexico and Chile.

$1 = 3,770 Colombian pesos. (Reporting by Luis Jaime Acosta Writing by Oliver Griffin; Editing by Steve Orlofsky)

Our Standards: The Thomson Reuters Trust Principles.