Colombia ratifies scrapping of US$850mn river dredging contract

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Tuesday, April 18, 2017

Colombia's Magdalena river corporation Cormagdalena ratified its decision to declare void a 2.5tn-peso (US$850mn) dredging contract originally awarded to the Navelena consortium, arguing the company did not make its financial disclosure on time.

Navelena, made up of troubled Brazilian construction giant Odebrecht and Colombia's Valores y Contratos (ValorCon), had presented an appeal to revert the voiding after the initial ruling on the contract.

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US authorities charged Odebrecht with paying approximately US$788mn in bribes to officials in 12 countries, mostly in Latin America, to secure lucrative contracts, with some of the bribes going through US banks. The charges stem from Brazil's Lava Jato corruption investigation, which started around three years ago, investigating contracts closed with state-run oil company Petrobras.

According to Cormagdalena's acting president, Luis Andrade, with this decision the works on the river's navigation project have suffered a two-year delay. The new PPP contract will be tendered next year and the works are now expected to be completed by 2022.

"Despite this setback generated by the voiding of the contract for the Magdalena River, we will guarantee the navigability," Andrade said.