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Inter-Development Bank and Costa Rica Collide Over Road Expansion

Article Summary:

The Inter-American Development Bank (IDB), which is funding a 50 km expansion of the InterAmerican highway between Cañas – Liberia, worth $45 million, is questioning the methodology used to analyze the reasonableness of prices. It states that Costa Rican violates the loan agreement approved by Congress by allowing the project to be brokered below market value.

Original Article Text From Nacion via Google Translate :

IDB and Technical Contract Collided Over Canas-Liberia Expansion

The Inter-American Development Bank (IDB), which funds the expansion of the North American highway located between Cañas and Liberia, hit technical difficulties on the award of the contract.

The project, almost $ 45,000 million, which will expand to four lanes the 50 kilometers, was awarded in early November to the Spanish consortium FCC. This was decided by the Governing Council despite an opposite view of the technicians of the Contracting Commission, says Costa Rican firm Meco.

According to experts, one of the two proposals put forward by FCC failed to comply with the technical requirements, and both were priced “ruinous”, in other words too low.

Johnny Barth Recruitment Management Roads and Bridges, National Highway Council (Conavi) and member of the Procurement Committee, defended the price analysis, insisting that the FCC award is unsafe. “The risk is that it cannot complete the project or which are gross imbalances in the provision requiring the Administration to recognize or unexpected price adjustment,” said Barth.

However, the Bank rejected the methodology for analyzing the reasonableness of prices by claiming that contrary to the loan agreement approved by Congress. “It is not possible to consider whether these are technical criteria other than indicated in the bid because, to evaluate bids, using the factors, methodologies and criteria defined in the bid,” said Fernando Quevedo IDB representative in Costa Rica. The “no objection” from the Bank is a prerequisite for use of funds.

Differences
After hearing the reaction of the IDB, the Contracting Commission prepared a document to refute its arguments. In addition, the technicians decided to keep their recommendation to the Council. “The constitutional principles applicable to administrative contracts indicate the obligation of the Administration to verify the price offered,” argued Manuel Brenes, the Management Office of Legal Affairs Conavi, according to the minutes of the meeting of October 14.

Nevertheless, after a meeting between representatives of the IDB and the Minister of Public Works, Francisco Jimenez, the Council decided to award the bid to FCC.

Jimenez, who is the council president, and said he did not share the recommendation of the technicians and that it might depart from the rules to which the country adhered to the sign the contract with the BID.

Conavi executive director, Carlos Acosta, the criterion of Jimenez supported, although it was one of the experts who recommended the award to Meco. He explained that the directors of Conavi have some additional items on the obligations of Costa Rica to sign the contract with the Bank.

However, Barth argued that there was a disregard of constitutional requirements. “The IDB is saying we have to allocate a certain way even when the analysis tells us otherwise. There is no single document that see FCC has reasonable prices, “said the engineer.

Currently, the Comptroller General of the Republic considers three appeals against the decision. The deadline to study expire on 14 February. FCC is linked to the concessionaire of the San José-Caldera (Highway of the Sun) and Valley Highway, award winning San Jose-San Ramon. The company representatives said they did not speak publicly about the case while the appeals are studied.

Link to Original Article:

From Nacion

Latin America Investment News on Viva Tropical