Corruption cases delay 6 infrastructure projects in Peru
Peruvian authorities are currently conducting several high-profile corruption investigations that have delayed six infrastructure projects in Peru.
The cases are related to activities of certain Brazilian companies in the construction sector and have resulted in the suspension or delay of important infrastructure projects, which would otherwise be operational and permitted.
For example, of the following six key projects, Gasoducto Sur Peruano, IIRSA Sur Tramo 2 and 3, Chavimochic III, IIRSA Norte, Vías Nuevas de Lima, and the Olmos Project Transfer Works, which collectively represented 5.0% of GDP in 2016, hhe gas pipeline has been suspended, Olmos has resumed operations and the other projects remain operational, although the general delay related to those projects has nevertheless resulted in a drop in GDP growth and overall investment in infrastructure.
The Peruvian government has worked to speed up the licensing of these stalled projects.
For example, it requested that Odebrecht, a prominent Brazilian construction company that won the Transfer Works contract for the Olmos Project and was later found guilty of bribing government officials, sell its shares in the project.
In addition, the government has authorized the South Peruvian Gas Pipeline auction, which could end by year-end.
The government is also adopting legislation that aims to protect new investors and is revising the language of government infrastructure contracts to include mandatory anti-corruption clauses.
Infrastructure projects
In February 2017, the Peruvian government issued Emergency Decree No. 003-2017 in an effort to approve measures to ensure the continuity of infrastructure works and for government officials to be cautious when making payments for stalled projects.
In addition, on March 25, 2019, the Special Prosecutor’s Office of Peru for the investigations related to Lava Jato delivered to the Judiciary the effective collaboration agreement signed with Odebrecht.
This agreement will allow the delivery of evidence and testimonies for the investigations of four cases in which Odebrecht admits acts of bribery of Peruvian officials.
Likewise, the agreement also establishes the payment of civil compensation in favor of Peru, which was estimated at approximately 225.1 million dollars, including accrued interest.
