Colombia's Hidroituango facing US$1bn-plus cost blowout

Cost overruns associated with Colombia's embattled Hidroituango dam could surpass US$1bn, a leading academic told BNamericas. 

Originally budgeted at 11tn pesos (US$3.5bn), the cost of the country's flagship energy generation project has ballooned amid ongoing construction problems.

Oswaldo Ordóñez, a geologist and professor at La Universidad Nacional in Medellín, expects additional costs of at least 3tn pesos.

“We still don't know the extent of the damage to the turbine rooms and the collapsed tunnels," Ordóñez said. "There are also a number of lawsuits against [project owner] EPM that could have a large bearing on the overall cost."

Earlier on Friday EPM announced the completion of the hydroelectric project's 435mn dam wall, which it said "significantly" eased the flooding threat to communities downstream on the Cauca river.

Ordóñez believes that the milestone reduces engineering and socio-environmental risks associated with the project "by around 50%". 

He added: “It's logical that the risk has been diminished but there is still uncertainty about the state of the infrastructure below the ground.“

Ordóñez also expects EPM to reveal an updated budget for the project by December following the completion of further studies. 

Construction work at Hidroituango was halted in April last year when the collapse of a water diversion tunnel forced the evacuation of 113,000 people and prompted the regional Antioquia government to declare a state of emergency amid fears of catastrophic flooding.

A series of further complications led EPM to postpone the scheduled December 2018 startup by three years in a best-case scenario.

EPM chief executive Jorge Londoño told reporters on Friday the completion of the dam's crest will allow work to resume on the powerhouse, adding that two of the plant's eight turbines are on track to begin operating by the end of 2021. 

Located around 170km northeast of Medellín on the Cauca river, Hidroituango is Colombia's largest infrastructure project in investment terms. The 2.4GW facility is expected to supply over 17% of the country's electricity when fully operational.

Last October, EPM estimated the total cost of the emergency at 7tn pesos (US$2.2bn), including US$1.3bn in lost energy sales US$630mn in repair works and US$314mn in expenses related to emergency response actions.

However the figure is expected to be significantly higher following further problems this year, including the discovery of a sinkhole in rock mass supporting the project's structure and a series of lawsuits. 

In March, the attorney general's office pressed charges against two former Hidroituango executives for alleged contracting irregularities.

Authorities are also investigating claims of environmental damage and human rights violations during the plant's construction.