SANTIAGO (Reuters) - Chile’s finance minister has sought to downplay a row between the government and the construction and engineering arm of South Korean giant Hyundai (000720.KS) over a $740 million (572.27 million pounds) suspension bridge, saying disputes in such mega projects were “quite common”.
Hyundai Engineering and Construction (HDEC) said on Monday it had suspended construction of the bridge, which will connect the Chilean island of Chiloe to the mainland, accusing the government of bad faith for seeking to increase the scope of the project without additional remuneration.
Finance Minister Ignacio Briones said he was confident the disagreement could be ironed out in talks or in the courts.
“As far as I understand, the government has honored exactly what the contract defines, but the Korean company says the opposite has occurred...when there are these discrepancies...it is for the courts - if it gets to that point - to decide,” he told Chilean daily El Mercurio on Tuesday.
HDEC leads the Consorcio Puente Chacao (CPC) which won the tender for the bridge’s construction in December 2013. Reuters could not immediately contact the South Korean company for comment outside of normal working hours on Tuesday.
However, it said on Monday that the government’s Department of Public Works (MOP) and its legal advisers said at a meeting in December that it would not increase the value of the project.
“The breach of the commitments made by the MOP, the bad faith with which the conversations have been carried out, the unjust damage that results from this and the complete legal uncertainty that prevails as a consequence, has led CPC to conclude that it is impossible, in these conditions, to continue with the project,” HDEC said on Monday.
It added that it regretted the effect on the workers and the inhabitants of Chiloé, as well as the failure of what it called the most important connectivity project in Chilean history.
The 2.5 km (1.5 miles) long link to Chiloe, an island roughly the size of Corsica, would be Latin America’s longest suspension bridge.
The bridge was first proposed in 1972, but the project has been cancelled and postponed several times. here
The MOP said in its own statement on Monday that it had been trying to work with CPC to adjust the contract after HDEC sought to increase the cost of the project by 50% or $300 million, a request rejected both by the current government of President Sebastian Pinera and the former government of Michelle Bachelet.
Reporting by Aislinn Laing; Editing by Kirsten Donovan