Economy December 7, 2023 | 8:08 am

Buy car in DR

Dominican Government faces more criticism over controversial Aerodom contract terms

Santo Domingo.- The agreement between the Dominican Government and Aeropuertos Dominicanos Siglo XXI (Aerodom) includes a clause where Aerodom can seek financial compensation or other remedies from the State if they fail to achieve “economic balance”. Critics, particularly in the opposition, have expressed concerns about the leniency of this clause, allowing Aerodom to seek government compensation if their yearly economic forecasts are not met.

Article 12 of the contract, focusing on “Economic Balance,” mandates that both parties strive to ensure a profitable return from the Capital Investment Program. However, this article also outlines over 12 potential situations where projected outcomes may not materialize, including excessive airport usage by fee-exempt individuals, continuous economic disruption, hyperinflation, and a decline in passenger traffic.

Opposition parties have highlighted these clauses, arguing that they unfairly benefit Aerodom if their annual financial projections fail. In such cases, Aerodom is authorized to propose various solutions, including compensation, modifying clauses or tariffs, extending deadlines, renegotiating the contract, or other measures to restore economic balance.

Comparisons have been made to the “shadow toll” system on the Samaná highway, where the government compensated the concessionaire for lower-than-expected vehicle flow. Deputy José Horacio Rodríguez cautioned against this aspect of the contract, citing past instances where the government had to amend the original 1999 contract due to disrupted economic balance.

Rodríguez pointed out that within five years, passenger numbers fell short of projections, breaking the economic balance and leading to the concessionaire collecting all airport taxes, a situation that persisted from 2004 to 2017. He also criticized the contract’s complexity and lack of accessibility, noting that important financial details were in English and contained complex technical jargon, which the commission refused to translate or delve deeper into.

The contract, having passed the Chamber of Deputies, is now headed to the Senate of the Republic for further consideration.

4 1 vote
Article Rating
Notify of

1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
Paul Tierney
December 7, 2023 9:03 am

The government should not be involved in a matter similar to the Juan Pablo highway mess. The gov’t had the highway constructed at a cost reduction in return for allowing toll concessions to be collected and kept by the contractor for 30 years. If the collections fell under a minimum amount the gov’t would compensate the contractor. The end result is the country has paid out more than what was the original estimate of the construction. The gov’t should not get itself into the same situation will Aerodom/Vinci.