Costa Rica: Chinese Dragon Spits Fire

Although the Minister of Public Works had demonstrated his confidence that there would not be increased costs in the road project to be built by the Chinese company CHEC, an announcement has now been made that there will be increases and they will be "substantial".

Wednesday, April 29, 2015

An article in Nacion.com reports that "...Confidence in "Chinese honor" and a personal guarantee that the Asians would not raise the cost of extending Route 32 (to Limon), only lasted two months for Transport Minister Carlos Segnini. "

The Chinese dragon would "behave itself" was the argument put forward by the minister before Congress in order to get legislators to approve the loan.

The signing of the project contract basis -a loan of $400 million which came with the condition of hiring the construction company CHEC- by President Chinchilla in 2013 during the visit of Chinese President Xi Jinping, is the main landmark in a saga whose ending, especially in terms of costs, it is not known.

The project design specifications were never clear, and the new -supposedly unbreakable-requirements posed by the minister motivated statements from a representative of the Chinese company in Costa Rica, who noted that "... the price will rise because Segnini asked them to add new technical conditions to the initial project .. " and " ... It will be a substantial increase because they are asking for technical requirements that were not covered initially. I can not say how much more expensive it will cost them because we are evaluating details ".



More on this topic

Costa Rica: $485 million for Controversial Road Works

February 2015

Without having read the contract with the construction company and ignoring final costs, the Legislature has approved the loan with the Chinese government to finance the extension of the road to Limón.

The loan with the government of China for $485 million is tied to a commercial contract with the Chinese state-run construction company CHEC, highly questioned not only technically but at the legal level, since it is one of the companies "... included in the list of companies ineligible for dealing with the World Bank until 2017 because of fraudulent practices in the Philippines ".

Award of Road Works to Chinese Company is Confirmed

January 2015

Following efforts by Costa Rican government officials with the Chinese government, an award to the company Chec for a contract to expand the road to the Caribbean has been confirmed.

All hope was lost for a potential involvement of domestic companies in the project to widening the road to Limon, after confirmation was given by the Minister of Public Works and Transportation (MOPT), Carlos Segnini, that in negotiations with the Chinese government they only managed to change some aspects of the project which had been criticized - among which was the promise of no embargo on Costa Rican assets in the case of litigation -confirming the award of the work to the company CHEC, which was obviously tied to the granting of financing from China.

Costa Rica: Private Group Wants to Build Road

August 2014

A group of Costa Rican construction companies insists with the proposal made to the previous administration to expand the 107 kilometer of the road to Limon at a cost lower than the Chinese option.

The five builders who suggested their plan to the former officials of the Ministry of Transport and Public Works are once again knocking on the doors of the institution, this time proposing that the current chief, Carlos Segnini, consider the initiative as an alternative to the loan from the government of China, of $465 million.

Costa Rica: Deadline to Sign $395 million Chinese Loan Extended

June 2014

China Harbour Engineering Company has accepted a request by the Solis administration to extend the signing a loan to be used for the extension of the road going from San José to the Caribbean.

It is the fifth time there has been a postponement of the signing of the loan agreement for the extension of 105 kilometers of Route 32, which connects the capital with the Port of Limón, in the Caribbean, but the first in the administration of President Luis Guillermo Solis.

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