Thursday 6 October 2022

“Cochinilla” case affects construction of road works and maintenance

Extension of radial Lindora stopped and 22 road improvement contracts were suspended; Business sectos requests a contingency plan from the government to avoid affecting the business climate

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QCOSTARICA – The “Cochinilla” case  – alleged corruption in the construction and award of public works – ended up suspending the maintenance of the highways and several road infrastructure projects.

Arturo Rosabal, Vice President of the Chamber of Commerce, asks the government for a contingency plan. Graphic La Republca

The latest was last week when the United Nations Office for Project Services (UNOPS), canceled the contracts recently awarded to the national construction companies H. Solís and Meco, whose owners are currently in preventive detention connected to the Chochinilla case.

It involves the expansion of the Lindora radial, a project that has been ongoing but never fot off the ground, for the last five years, for a value of US$14 million and the reconstruction of the old bridge over the Virilla River, at the Ricardo Saprissa stadium, whose investment exceeds US$18 million.

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Apart from this, Rodolfo Méndez Mata, MOPT minister, ordered the cancellation “for transparency” of 22 bidding contracts to maintain the highways.

The worst of all is that the suspension of works and maintenance is indefinite. Like no one knows when they will be resumed.

The cancellation of the contracts will not imply additional costs for the Costa Rican State, assured Alejandro Rossi, UNOPS representative in Costa Rica.

At the moment, it is not known when the MOPT will again hold a public tender to resume the construction of infrastructure and maintain the roads. Most likely that is expected to occur after the end of the term of this administration in May 2022 as the government focuses on the health and financial issues of the country.

“Knowing the facts that have affected the transparency, legality and ethics in the execution of the current contracts, I have made the decision that the 22 contracts will not be extended in favor of the companies currently awarded, even if this implies the national sacrifice of not having road maintenance services for a period of time,” said Méndez at the end of June, two weeks after the Cochinilla case was made public, resulting in a series of raids and the arrest of more than 30 people.

In this sense, representatives of the productive sector lamented the situation and asked the government of Carlos Alvarado to implement a contingency plan so that the roads receive the necessary investment.

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“The maintenance of the road infrastructure cannot be suspended. What can be done is that if there are other companies, we encourage them to build and maintain them. This government must guarantee to all Costa Ricans that the roads will be in good condition, “said Arturo Rosabal, vice president of the Chamber of Commerce.

The “Cochinilla” case is an alleged bribery network that included construction and inspection companies, with the aim of offering gifts and bribes to MOPT and Conavi officials, in exchange for obtaining juicy bidding contracts or speeding up construction processes.

In principle the authorities speak of contracts for about ¢78 billion colones; however, the amount could be even higher.

If it is proven in a final judgment that the aforementioned companies did pay bribes to Conavi officials, they could be disqualified from building road infrastructure for a period ranging from three to ten years.

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The sanction for the companies would imply the disqualification to build any road infrastructure for the entire State, according to a reform to the administrative contracting law approved in 2019 and that was promoted by Karine Niño, legislator for the Partido Liberacion Nacional (PLN).

“It will be considered as a serious fault of the contractor, when one of his actions or omissions endangers the life or safety of people, when the projects increase in cost because of his fault, or when there is a firm conviction against from the contractor,” Niño said.

Under Investigation

The 32 people under investigation for the “Cochinilla” case are related to the following public entities and companies related to the construction and road supervision sector.

  • Casa Presidencial (Government House)
  • Ministry of Public Works (MOPT)
  • Comptroller General of the Republic
  • National Highway Council (Conavi)
  • Council of Public Transport Constructors (CTP)
  • MECO
  • H. Solís
  • Constructora Herrera
  • Frutales
  • Fresa Fresca Supervisoras
  • Diccoc
  • ITS
  • Cacisa
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