Construction experts express doubts about Chinese loan deal

Organizations of road builders and construction firms are expressing reservations about a loan deal with China to widen Ruta 32.

The so-called Grupo Consenso said that its members still were in the dark because they have not seen a revised text of the loan proposal that was presented Thursday to the Comisión de Asuntos Hacendarios in the legislative assembly.

The committee eventually will make a recommendation about the proposal which actually is for two loans.

The Grupo Consenso said there were important doubts about the deal.

Part of the plan is for Costa Rica to provide funds, including about $20 million for expropriating property and for relocating public utilities. That amount does not appear to be adequate, the group said.

The estimated $10 million is insufficient to expropriate a 10-meter strip for 50 kilometers simply to relocate the pipeline that is used by the Refinadora Costarricense de Petróleo S.A, the group said in a release. A similar amount is insufficient for relocating other services, such as water lines, telephone lines and fiber optic cables that connect Costa Rica with the Maya undersea Internet system.

The fuel pipeline runs from Siquirres to Moín.

The group also raised concerns about the loans being denominated in Chinese currency because that generates uncertainty in the medium and long term, it said.

The Grupo Consenso is composed of the Colegio Federado de Ingenieros y de Arquitectos, the Unión Costarricense de
Cámaras y Asociaciones del Sector Empresarial Privado, the Cámara Costarricense de la Construcción, the Cámara de Consultores en Arquitectura e Ingeniería, the Asociación de Carreteras y Caminos de Costa Rica and the Laboratorio Nacional de Materiales y Modelos Estructurales at the Universidad de Costa Rica.

There usually is a lag at the legislature when a revised text is submitted. Because the legislature is going on holiday break, the full content of the new loan proposal might not be known until January 13 at the earliest.

The People’s Republic of China has said that it seeks a quick approval of the loan agreement, but this week officials there said they would be willing to wait until March.

The agreement specifies a direct award to a Chinese firm without competitive bidding. The contract also said that all rights and obligations under the contract will be interpreted in conformity of Chinese law. The measure that was before lawmakers also says that material to be used in road building can be imported without the payment of customs duties. Costa Rica also would renounce any immunity it may have for being a sovereign state.

The $465.6 million project would make Ruta 32 four lane from Limón to Rio Frio, some 107.2  kilometers, a little more than 66 miles.

The Export–Import Bank of China would make two loans, one for $100 million and one for $296 million. Costa Rica is putting up $90 million, including the $20 million for expropriating property and relocating public services.

The larger loan would be at 4 percent interests, and the smaller one at 2 percent.

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