Suez faces ultimatum in Panama project

Works for sewerage and wastewater treatment systems for David, capital of Panama's Chiriquí provincehad been on hold for several weeks, after consortium Consorcio Agua de David, comprising French water solutions firm Suez and Spanish engineering firm Pentec ran into financial trouble.

At a press conference on Monday, government officials said they will not hesitate to enforce the performance bond the company had to issue as part of the contract, if works do not resume promptly.

Suez has all the responsibility to execute the works, according to Juan Felipe de la Iglesia, director of national water utility IDAAN. The consortium was also given the right to operate the systems for five years after completion. Works on the project were launched in March last year and were scheduled to take 24 months.

A performance bond worth 50% of the project's total price tag and a deposit bond were issued following the awarding of the contract. Requiring total investments of US$297mn, the project is the largest IDAAN has ever undertaken.

Jorge González, minister of presidential goals, said that the land where a wastewater treatment plant will be built was already bought. The price was based on two appraisals carried out by different government entities.

IDAAN has already disbursed US$45mn to the consortium, some of it in the form of a down payment and also to cover other expenses.

Basic sanitation goal will not be met

González also mentioned President Juan Carlos Varela's goal of building 300,000 basic sanitation units before the end of his term in June next year. To date, contracts for building 225,772 of these units have been put out to tender. The official said that the contracts for around 80% of the sanitation units are expected to be awarded before Varela's government concludes.

PICTURED: Panamanian officials at a press conference Monday. CREDIT: IDAAN.