Chinchero airport concessionaire cleared for departure?

The Peruvian government is close to canceling the contract with the concessionaire of Cusco's Chinchero international airport (AICC), a project estimated to cost US$682 million, a sector specialist told BNamericas on condition of anonymity.

Termination of the contract with the Natividad consortium, formed by Hyundai Engineering & Construction (South Korea), Sinohydro Corporation (China), ICA Constructora (Mexico) and HV Contratistas (Peru), would mean that the works would be halted for at least six months, depending on how long it takes to sign a contract with a new concessionaire.

According to the source, the government has been considering canceling the contract with Natividad for a couple of weeks, and the final straw for the authorities was the company's lack of progress and unwillingness to cooperate.

"There was a meeting between the head of the cabinet, the transport and communications ministry, the signatory parties of the government-to-government agreement and the governor of Cusco," the specialist said. 

"It was noted that the situation with the contractor was already unsustainable because there is no desire to work. They're asking for money, but the works are halted," the source added.

Consorcio Natividad also reportedly wanted to have its representatives participate in the meeting, but they were refused entry.

DISCREPANCIES

The problems regarding the airport, the transport and communications ministry (MTC) and Natividad have been going on for months. In early April, the ministry announced that it would transfer 40mn soles (US$11mn) to ensure that works would continue, but the company had requested US$193mn.

With the contract now likely to be canceled, the call for a new concessionaire and signing of the contract would take six to nine months, so works on the airport will likely only be resumed in the second quarter of 2025. 

As of the end of March, general progress had reached 11%, and the work was expected to be completed in March-April 2026, although under a different concessionaire that completion date will be pushed back further, possibly until 2027 or 2028.

When contacted by BNamericas for an update on the matter, the MTC said that the contract remains in effect and "there is no official announcement that it has been canceled."

Just hours later, the ministry issued a statement saying it was working on every alternative to have the construction of the airport carried out by the consortium and that a new meeting was scheduled for June 13.

ARBITRATION

Before Natividad took on the AICC project, it had been awarded to concessionaire Kuntur Wasi in 2014, but that company's contract was canceled in 2017. Like Kuntar Wasi, if Natividad's contract is canceled, it is highly likely that it will seek arbitration.

“The MTC is pushing to have all the documentation and prepare the termination of the contract," the source said. "Almost everything is ready. Consorcio Natividad would also be evaluating resolving the contract on its own,” they added.