Chilean court sides with developer after builder stops work at 531-MW Alto Maipo hydroelectric project

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A ruling by the 8th Civil Court of Santiago has favored utility AES Gener in a dispute with consortium Constructora Nuevo Maipo (CNM) regarding services associated with construction of the 531-MW Alto Maipo hydroelectric project.

CNM, which includes German construction group Hochtief AG and Italy’s CMC Di Ravenna, was awarded a contract in November 2012 to build Alto Maipo on the condition that the group provide a US$76 million bid bond as part of the deal.

The court’s ruling, however, allows AES Gener to keep the guarantee on the basis that CNM effectively ended its contract when it partially suspended construction at Alto Maipo in May.

According to the court, CNM’s decision to stop work was based on safety concerns, but the company did not provide a plan to complete the project.

The court’s ruling is not necessarily final, however, as AES and CNM will now face international arbitration, per terms of the 2012 contract, while CNM also maintains the ability to appeal the civil court’s decision.

The $2 billion Alto Maipo complex includes two run-of-river facilities — the 267-MW Las Lajas and 264-MW Alfalfal 2, both of which are located in the upper section of the Maipo River southeast of Santiago. reported in February that Poyry had been awarded an engineering services contract for the project.

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