Peru ordered to pay over US$90mn in Chinchero airport arbitration

The International Centre for Settlement of Investment Disputes (ICSID) ruled that Peru must pay concessionaire Kuntur Wasi US$91mn plus interest for the cancellation of the construction contract of the US$682mn Chinchero international airport (AICC).

Kuntur Wasi – comprising Peru's Andino Investment Holding (AIH) and Argentina's Corporación América – won the contract to build the facility serving Cusco city in 2014, when the airport was planned to be built under a public-private partnership model.

The consortium filed the arbitration lawsuit with ICSID, part of the World Bank, in 2018 after the government canceled the contract in 2017, alleging irregularities.

Currently, the project is carried out under the government-to-government modality with the involvement of South Korea.

In a filing with securities regulator SMV, AIH said it will receive half the amount the State must pay as it has a 50% stake in the consortium.

CHINCHERO

In early April, the transport and communications ministry announced that it will transfer 40mn soles (US$10.8mn) to consortium Natividad, which is currently building the airport, to ensure works continue, although the consortium said it would need US$193mn.

A source requesting anonymity told BNamericas that the funds should be paid in mid-May but that the government is alleging breaches of the contract.

"The possibility of removing the contractor in the next two months is being strongly evaluated," the source said. The process of signing a new contract would take at least nine months.

OTHER CASES

In March, local construction company Cosapi reported that the concessionaire of Lima's metro line No. 2 also won an arbitration case that was filed in 2017 over delays.

Cosapi said its share of the compensation corresponded to 147mn soles, given that it had a 10% participation in the consortium. Although the total compensation was not published, BNamericas reported infrastructure lawyer José Cárdenas, of Damma Legal Advisors, as saying that the figure could be inferred from Cosapi's share and be as high as 1.47bn soles. 

And last month, a Paris court ruled that Lima city must pay Lima Expresa, a unit of France's Vinci Highways, compensation of US$46mn for underground work on the Línea Amarilla expressway section.