No light at end of tunnel in Peru metro line dispute

Line No. 2 of the Lima metro, a US$5.35bn project in the Peruvian capital, will begin to report slower work progress amid disputes with local authorities.

After workers from the city’s municipal government (MML) wanted to forcibly interrupt the start of work on the Central station on Sunday (July 7), the concessionaire was finally able to begin work but the municipal authority threatened legal action against the group and the rest of the entities involved.

“Both the transportation ministry [MTC], the regulatory body Ositran, the urban transportation authority [ATU] and the concessionaire agree that there was an approved plan – even by the MML itself a couple of weeks ago – which is the plan that has been launched,” Juan José Cárdenas, a lawyer specialized in infrastructure and partner at the Damma Legal Advisors law firm, told BNamericas.

The tunnel boring machine that has been used for the underground line arrived at the work area of the Central station in June but there was no approval from the MML to proceed.

Although line No. 2 is part of the government's priority projects – and is exempt from ordinances issued by lower-ranking entities such as the MML, according to law 31955 – the municipal authority was against the construction plan and tried to prevent work on the station from starting because of road closures.

“In fact, it was not necessary to present the latest diversion plan apparently approved by the MML. The purpose of what was issued within law 31955 is to avoid asking each municipality for permits to advance with the projects, which is one of the reasons why works in Peru were delayed,” adds Cárdenas.

Although the MML has already announced that it will sue the construction concessionaire – made up of Cosapi, Iridium, FCC, Salini Impregilo, Ansaldo STS and Ansaldo Breda – further arbitration is not ruled out in which the company responds and sues the government again for interference in the project and not respecting contracts.

“We are going to continue with the work. We hope that the MML calls us to reach an agreement,” Cristian Rosenthal, lawyer for the construction concessionaire, told local media. 

At the end of May, the line had registered progress of 54.7% (US$2.92bn spent), according to Ositran. According to Scotiabank, this year at least US$400mn will be spent on the project and between January and May US$109mn was invested.