LIMA, March 15 Peru could suspend a $525 million
airport project if the country's comptroller recommends doing so
amid questions over controversial changes to the contract, the
transportation minister said Thursday.
The consortium Kuntur Wasi, led by Peruvian company Andino
Investment Holding SAA, won the rights to build and
operate an airport for 40 years near Peru's popular Machu Picchu
ruins in 2014.
But President Pedro Pablo Kuczynski, who took office in
July, modified the contract in a bid to keep the project's
pricetag from doubling by compensating the company for some work
upfront - reducing the need for the consortium to take out
private loans with high interest rates.
Lawmakers in the opposition-controlled Congress have accused
the government of trying to benefit Andino, where the prime
minister's sister worked as a manager until resigning this month
to calm criticism of a potential conflict of interest.
The comptroller has been reviewing the contract change,
signed by the government and Kuntur Wasi last month, and is
expected to report its findings in about a month.
"We're going to wait and implement whatever they tell us to
implement," Transportation Minister Martin Vizcarra told a news
conference. "If it has to be postponed, we'll know that we did
all we could to get this project going."
Andino did not immediately respond to requests for comment.
Suspending the project could further dampen Peru's economic
growth prospects as a massive graft scandal stalls public work
projects and heightens scrutiny of new contracts.
Vizcarra called the airport contract - written during the
government of former President Ollanta Humala - "half-baked" in
its original form because it lacks a ceiling for interest rates
for the consortium's financing, some of which the state must pay
Vizcarra said the government could cancel the contract but
would risk potential fines or a lawsuit in an international
investor rights panel.
"The contract is so poorly designed that we wouldn't even
have arguments for cancelling it," Vizcarra said.
Public prosecutors are investigating potential wrongdoing in
the process of designing and awarding the contract after
Kuczynski's government requested a probe.
(Reporting by Mitra Taj; Editing by Lisa Shumaker)