Government dealings with questioned contractor will cost taxpayers US$45.0M

Santo Domingo.- The Dominican Government will have to pay the highway contractor company Codacsa US$45.0 million, after losing a lawsuit filed on alleged breach of the concession contract to build the Eastern Motorway, from San Pedro to La Romana, in November 2001.

The London based International Chamber of Commerce’s Arbitration Court upheld the contract’s validity and ruled that the defendant violated its obligations.

It also ordered the government to pay US$200,000 in administrative expenses and arbitrators’ fees awarded by the Court.

Codacsa alleged breach of contract regarding the issuing of financing guarantees, denied authorization to build the San Pedro-La Romana toll plaza, and failure to update the payment of tolls and of “shadow tolls.”

President Leonel Fernandez’s Administration had turned a deaf ear from warnings even from Public Works minister Victor Diaz Rua, that Codacsa was failing to meet its road maintenance obligations in order to force a court showdown.