No one assumes responsibility for having brought Majes Siguas II to the brink of the abyss

By Robert Orihuela, from Arequipa

On Wednesday, December 29, the extraordinary session to approve addendum 13, key in the reactivation of the project, was frustrated at the Arequipa Regional Council (CRA) Majes Siguas II. The consequences of this omission will lead to the termination of the contract and an international arbitration initiated by Cobra, the concessionaire in charge of this agribusiness project that was paralyzed four years ago.

However, the seriousness of the matter it does not seem to interest the directors Harberth Zúñiga, Silvio Arias and José Luis Hancco, Directly responsible for this crisis, who preferred to participate in a gift delivery rather than meet, urgently, with the executive manager of the Autonomous Authority of Majes (Autodema), Arturo Arroyo Ambia.

Irresponsible

For the public management specialist Jorge Sumari, the attitude of all the councilors and of the governor of Arequipa, Kimmerlee Gutiérrez, is irresponsible. “There is negligence on both sides. They sabotage the approval of Addendum 13 because they do not want to assume the political responsibility that this implies, “he said. It does not rule out that they have incurred in omission of functions and should be reported.

The Spanish Cobra has already noticed it. If the addendum did not have the green light from the CRA until December 30, the expiration of the contract will begin. The former director of Autodema Isaac Martínez said that this would also lead to an international arbitration, in which they will ask for the investment, the loss of profits, and damages. A millionaire compensation for waiting almost four years with the project stopped.

But what does Addendum 13 consist of? It boils down to changing the irrigation system, making it more technical to save water with an investment that exceeds US $ 104 million. Said modification already had the approval of the Ministry of Economy and Finance, ProInversión and some recommendations from the Comptroller’s Office. The only thing missing was the approval of the directors, who due to lack of a quorum canceled the call.

What does not running Majes II involve? Autodema has estimated that the opportunity cost losses amount to US $ 3.47 billion. Majes incorporates 38,500 hectares of productive land, located in the Siguas pampas, whose impact on regional development would be enormous; 190,000 direct jobs and 290,000 indirect jobs would be created.

It would be oriented towards agro-exports and had a component to develop electrical energy.

They throw the ball

In this regard, the governor clarified that the CRA was in charge of approving Addendum 13. She regretted that they had not even prepared a prediction for debate. Councilor Hancco chairs the special commission that was to carry out this work. Hancco has not provided a justification for his omission. The commission has all the documents to prepare the prediction of the addendum, said the president of the CRA, Ysrael Zúñiga.

One of the causes of inaction, Sumari indicates, would be that there would be “meanness and ignorance” on the part of some advisers. “They do not see that what is at stake is the future of the region.”

At the time, Hancco spoke out against Addendum 13 and accused that he was giving in to the company’s demands. That would explain his behavior.

For Gutiérrez, the president of the CRA is poorly advised. He should not have summoned the advisers without counting on the prediction. In his defense, Ysrael Zúñiga said that he only heeded the governor’s request to finish raising doubts about the addendum.

For his part, the Autodema manager said he would contact the dealer’s representatives to ask them to give them a final deadline to approve the addendum. “It depends on them. Although for there to be an arbitration, at least 6 months will have to pass and in that time we can reach an agreement, “he said.

Arias: not an urgent problem

The counselor Silvio Arias pointed out that when the time came he could vote in favor of Addendum 13. But for him it is not an urgent problem. He said it took at least a month to get all the reports and raise any doubts about the addendum. Only in this way the Special Commission, of which it is a member, could deliver the prediction so that later the president of the CRA summons an extraordinary session. The problem, says specialist Jorge Sumari, is that the company will not wait any longer because it also needs to know if there is a real commitment on the part of the Regional Government of Arequipa for the project. “The message, that after a frustrated session and with the patience with which they are taking it, the message is sent that they do not want an addendum. The risk of arbitration is latent ”, he concluded.