Colombia says it wants Odebrecht to leave

Colombia says it wants Odebrecht to leave

Brazil Colombia Project & Infrastructure Finance

The Colombian government wants to evict Odebrecht from the country as details emerge of the Brazilian builder bribing officials to secure public works contracts.

"We are working to achieve the definitive exit of Odebrecht from Colombia," said Luis Andrade, head of the national infrastructure agency ANI.

The agency asked an arbitration court this week to annul Odebrecht's contract for the Ruta del Sol 2 toll road concession, weeks after the construction company admitted to paying more than $11m in bribes in Colombia.

"We expect to have a firm decision in the next few months," Andrade said. "This will allow us to open a new tender to finish [the project]."

Andrade added that ANI looked to protect the rights of users and "affected third parties, such as the financial sector" when it asked the court to cancel the contract.

Gabriel Garcia Morales, once the head of ANI's predecessor INCO and later the vice minister of transportation during the administration for former President Alvaro Uribe, has admitted to receiving $6.5m in bribes from Odebrecht. Former Sen. Otto Nicolas Bula stands accused of accepting $4.6m in bribes to help Odebrecht win the Ruta del Sol 2 contract but he has denied the charges.

Odebrecht owns 62% of the Ruta del Sol concessionaire that signed the 20-year contract in November 2014. Episol holds 33% of the concessionaire, while CSS Constructores has 5%. The COP677bn ($230m) Ruta del Sol 2 was part of the first round of Colombia's 4G toll road concessions program.

Odebrecht also owns 62% of Navelena, the SPV developing the Rio Magdalena PPP in Colombia. Mexico's Ideal tried to take a 51% stake in the project, but Odebrecht's board refused the offer late last year.

Jan De Nul agreed to invest in the project in November last year and has since amassed a 25% stake. Local builder Valorcon has kept its 13% share. Navelena has until February 25 to find a replacement for Odebrecht.

SMBC stepped in with a 12-year $250m loan in December last year, just as the deadline approached for Navelena to present a financing commitment for at least $225m.

State-owned lender Banco Agrario granted a COP120bn bridge loan to Navelena in November 2015. Even with Odebrecht's participation, the bank said it approved the loan because the PPP included COP2.5tn in guaranteed revenues, enough to cover the debt payments.

Odebrecht has agreed to pay fines in three countries – $32m in Colombia, $59m in Panama and $8.9m in Peru – and it is expected to reach settlements in the other nine counties where it has admitted to paying bribes. The company has also agreed to pay BRL3.83bn ($1.19bn) in fines in Brazil, Switzerland and the US as part of a plea agreement to settle allegations from the Lava Jato corruption investigation.

Odebrecht has also apologized for corrupt practices and said it will not let it happen again.