Santo Domingo.- Embattled Brazilian company Odebrecht is demanding that Dominican Republic’s State-owned Electric Utility (CDEEE) pay over US$700 million for “extra costs” in the construction of the coal-fired power plant at Punta Catalina (south), according to sources quoted by listin.com.do.
They say that the CDEEE’s refusal to pay such cost overruns has triggered an unexpected dispute that could delay the plant’s delivery date. The Utility alleges, the sources say, that contractor itself must bear such overruns.
When making demand about a month ago, the Punta Catalina consortium Tecnimont-Odebrecht Estrella proposed to finish the facility as late as May, 2019, or nearly two years after the initial date to start operations, the sources added. “Tecnimont-Odebrecht Estrella was advised that if there is a delay in the agreed date, the contractor must pay a penalty for each day of delay.”
Among the consortium’s demand of the to CDEEE is a US$49.2 million insurance policy, guarantees, legal expenses and financial costs “as a consequence of a deficit in cash flow and unpaid bills.”
However, the CDEEE responded that these bills were filed “long before the work was completed,” at Punta Catalina, whose original cost spiraled from less than US$1.0 billion, to just over US$2.1 billion.
The cost overrun placed the power plant at the center of the scandal of Odebrecht, which admitted paying US$92.0 million in bribes to Dominican officials in exchange for lucrative contracts.