The International Center for Settlement of Investment Disputes (ICSID) issued its final award in favor of the concessionaire company Metro de Lima Línea 2 within the framework of the arbitration process that began in 2017 against the Peruvian State due to delays in the execution of said project.
This news was confirmed by the Peruvian Engineering and Construction and Project Management Company (Cosapi), which is part of the Lima Metro Line 2 Consortium with 10% of the shares. According to the important fact sent to the regulator, the ICSID ordered the Peruvian State to pay compensation for a series of concepts that we detail in the following note.
Arbitration between Line 2 of the Lima Metro and the Peruvian State concludes
On March 21 of this year, the International Center for Settlement of Investment Disputes (ICSID) notified the concessionaire company Metro de Lima Línea 2 SA of the arbitration award that was favorable to this company in its dispute with the Peruvian State. That was due to delays in the execution of the Line 2 project and the branch of Line 4 of the Lima and Callao Metro.
This fact was communicated by the Peruvian Company of Engineering and Construction and Project Management (Cosapi), which reported on the ruling issued by this court made up of David JA Cairns (president), Guido Santiago Tawil (appointed by the plaintiffs) and José Emilio Nunes Pinto (appointed by Peru).
“In said favorable award for the concessionaire company, The arbitration court obliges the Peruvian State to pay compensation for the following concepts (i) cost overruns due to instructions for changing the design of Metro Line 2, (ii) economic construction damages, (iii) compensation for financial damages, as well as the interest that accrues from December 31, 2018 until the effective payment of said compensation.“, reads the document sent by Cosapi to the Securities Market Superintendency.
Given this ICSID ruling, Cosapi indicated that it is awaiting official calculations from said institutions to evaluate the financial impact that this compensation would cause on its financial statements.
Line 2 of the Lima Metro: how did the dispute between the concessionaire and the Peruvian State originate?
In 2014, our country signed a concession contract for the design, construction, operation and maintenance of the Line 2 project of the Lima Metro and a branch of Line 4. However, three years later, the Lima Metro Line Consortium 2 began a lawsuit against the Peruvian State; since the delivery of the land where the infrastructure was to be developed did not present the conditions agreed upon in the contract. This caused the works to accumulate more than a year of delays.
It is worth mentioning that the Lima Metro Line 2 Consortium is made up of various companies such as Iridium, Dragados, FCC, Webuild, Cosapi, Hitachi Rail STS and Hitachi Rail Italy SpA. This project has an infrastructure of 35 kilometers, 35 stations, more than 30 ventilation shafts and emergency exits. As is public knowledge, this service has been operating free of charge since December of last year and is currently in white tide for a period of 90 days. Its purpose is to cross Lima from east to west in just 45 minutes.
Source: Larepublica
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