Brazil builder rebuts Ecuador’s allegations on 230-MW San Francisco

Brazilian constructor Construtora Norberto Odebrecht issued a statement rebutting accusations by project developer Hidropastaza of defective construction of the 230-MW San Francisco hydroelectric project in Ecuador.

The government of Ecuador announced in April that government-owned Hidropastaza would file civil and criminal actions seeking US$210 million in damages from Odebrecht. (HNN 4/8/09)

Last year, Ecuador President Rafael Correa accused Odebrecht of having built the project poorly. San Francisco was completed in 2007, but was not functioning because of damaged machinery. Correa expelled the firm from Ecuador and sent troops to seize US$800 million worth of projects being carried out by Odebrecht, including an airport, two hydroelectric plants, and a rural irrigation project.

Odebrecht rebuffs the accusations related to the San Francisco power station disclosed today by the press and demands that technical audits of the highest level be performed, in view of the fact that it does not acknowledge the validity of the accusations made,” Odebrecht said May 5. At the due time, Odebrecht will make public the result of a technical report to be delivered by one of the most renowned international consulting firms it has engaged for such.

Odebrecht said Hidropastaza violated the rights of Odebrecht, a foreign investor that has made important contributions to the economic and social development of Ecuador.

The contractor said Hidropastaza formally acknowledged the hydro project was sufficiently well built by a consortium of Odebrecht, Alstom, and VA Tech when it began operation in June 2007. It said when problems arose that were beyond the consortium’s control, Hidropastaza rejected Odebrecht’s efforts to solve the problem and began a defamation campaign against Odebrecht.

Odebrecht said the defamation continued despite the fact the contractor performed all rectifications, including those beyond its contractual obligations, ceded its participation in other Ecuador projects, and remained silent.