Construction of Peru's Chinchero airport advances amid uncertainty

Work on Chinchero international airport (AICC), a US$682mn project to serve Peru’s tourism hub Cusco, continues to advance after disputes were resolved between the transport ministry (MTC) and the Natividad construction consortium. However, uncertainty remains and new controversies could arise.

According to a sector specialist speaking on condition of anonymity, Natividad will seek to ensure – via a framework agreement – the construction of the passenger terminal and the perimeter fence, and the MTC has already committed to providing advances of up to US$40mn as many times as needed to have cash flow.

As for the rest of the works – the project comprises eight construction packages – the continuity of Natividad is not guaranteed.

“Currently only the perimeter fence is being advanced and confirmation is awaited for the terminal. Both are works that should already have a good percentage of progress,” says the specialist who is working on the project.

Natividad is made up of Hyundai Engineering & Construction (South Korea), Sinohydro Corporation (China), ICA Constructora (Mexico) and HV Contratistas (Peru). The group took over the project after the contract with the previous concessionaire, Kuntur Wasi, was terminated in 2017.

According to the comptroller general, construction of AICC was 47% behind schedule as of mid-June and it will not be ready by the originally agreed date of July 2025. The delay led to a fierce dispute between the MTC and Natividad, with the ministry coming close to ending the contract.

The MTC pulled back due to political fears and a lack of capacity to manage possible social conflicts.

FUTURE

While the situation remains calm but tense, the probability of an end to the relationship between Natividad and the MTC is high. According to the specialist, the technical entities of the MTC – officials in the transport department – are not happy with Natividad’s work and it is only a matter of time before they opt for a new contractor.

“The coordination areas want to terminate the contract because they know that they’re not going to get anywhere with Natividad. Once minister Raúl Pérez Reyes leaves, it’s likely that the problem will arise again.” 

The MTC recently presented a substitute technical report (ITS) to environmental regulator Senace in which it proposes carrying out work for US$250,000 to ensure the supply of water for the construction and operation of the AICC. In the report, the ministry says the work will be completed in the fourth quarter of 2025 but that is considered unlikely.

“At this rate, and being optimistic, the AICC will only be ready in 2030,” according to the specialist.