Arequipa: Majes Siguas II could still be saved from the expiration of the contract

By: Elizabeth Huanca and Elmer Mamani

There is still a glimmer of hope for the Majes Siguas II project. The president of the Arequipa Chamber of Commerce and Industry (CCIA), Luis Caballero, made contact with the representatives of the Angostura Siguas concessionaire. They told him that the Contract expiration process will last six months. If within that period, the Arequipa regional council approves addendum 13, they will resume work to continue with the work.

Majes II is a public-private investment that consists of enable 38,500 hectares of agricultural land on the coast of Arequipa and whose operation will generate more than 400,000 direct and indirect jobs. Caballero offered the CCIA as a mediator in the conflict. He affirmed that it is a key project for regional development that cannot be deactivated.

The day before, Angostura Siguas sent a letter to the Arequipa Regional Government (GRA) ministries of Economy and Finance (MEF) and Agrarian Development (Minagri) to end the concession. The concessionaire, constituted by the Spanish company Cobra, specifies that having been in charge of the project for 10 years generated an economic loss of 220 million dollars.

The CCIA businessmen showed their concern over this ultimatum. For Caballero, the businessmen wanted to convey two messages with the letter. The first, they will not give more extensions to the Arequipa region.

The second, that “as soon as the addendum is signed, they will restart the project immediately.” In this context, Caballero points out that the letter does not necessarily represent arbitration.

The employer is direct. It indicates that if the Regional Council does not give the speed to debate and approve the addendum, which implies an additional investment of US $ 104 million, Governor Kimmerlee Gutiérrez has the full powers to sign it.

“Nowhere in the contract does it state that the Regional Council must approve the signing of the addendum, we understand that this aspect is political. If the governor signs it (without the consent of the counselors) it will not have any legal consequence.

He recalled that the addendum has the approval of the Ministry of Economy, ProInversión and even the Comptroller’s Office. Along these lines, he said, it would be disastrous for the region to “lose” the opportunity to carry out Majes II, which today represents the only nearby project.

Government intervention

Various authorities and specialists too They called for the intervention of the national government to prevent the fall of Majes II.

The mayor of Arequipa Omar Candia Aguilar demanded the mediation of the Presidency of the Council of Ministers so that the concessionaire accepts to extend the term and the addendum 13 is approved.

Minagri’s deputy minister of infrastructure and irrigation, Walter Obando, is aware of the matter and reportedly informed the head of the sector, Víctor Maita. The former manager of Autodema-the executing unit of Majes II- Fernando Vargas, also said that the intervention of the Executive is essential. The arbitration will drag the Peruvian State and it is the MEF that endorses this project, he said.

Despite being with the water around their neck, two directors responsible for not signing the addendum remain in their thirteen. The president of the regional legislature José Luis Hancco and his colleague Elmer Pinto consider that the letter sent by the concessionaire Angostura Siguas is a method “to put pressure on them.”

Pinto insists that the land parcel model only favors large companies. However, within the regional council, not everyone thinks like Hancco or Pinto. Habert Zúñiga disagrees with them. He said that in this outcome there are many responsibilities of the regional council that did not convene the debate on the addendum in a timely manner. He recalled that Hancco had to prepare the opinion and did not. He even sent him a letter on December 27 to schedule it and it was not done.

The legislator Silvio Arias considered that the Regional Council should meet in emergency. He stated that his position was always to give the green light to the addendum. In that sense, he is hopeful that Cobra’s decision is not final.

“We are not the only ones responsible”

Let’s not put on the dealer’s shirt “, replied José Luis Hancco when asked about his responsibility in not approving addendum 13. The counselor maintained that of the four breaches that Cobra uses, they are only responsible for the last one, addendum 13. He indicated that they are not guilty of not handing over all of the land or the fine-tuning of the infrastructure of phase 1 of the project. “Are we going to do the Environmental Impact Study? It is Autodema who must do it, “he said.

The authority denied that a mea culpa has to be made for not approving addendum 13.