Colombia Health Minister Fernando Ruiz announced this morning (January 24) that total vaccinations against Covid-19 here have now surpassed 70 million.

What’s more, as of January 22, 2022, 30.78 million Colombians had received complete dosages (in most cases two shots, or else the single-shot Johnson & Johnson vaccine).

In addition, 5.1 million Colombians have now gotten a “reinforcement” dose (in most cases, a third shot), according to Minister Ruiz (see graphic, above).

Meanwhile, Health Ministry epidemiology director Julián Fernández announced January 21 that the Omicron variant continues as the overwhelming type of Covid-19 now found here.

Nationwide, more than 90,000 Colombians are (on average) tested daily for Covid-19, and “peak” Omicron infection rates are now “evident,” Fernández stated.

While hospital intensive-care unit (ICU) capacities are at 100% in some areas as a result of the Omicron surge, there’s still spare ICU capacity in other areas, he said.

Unfortunately, Covid-related deaths have risen over the past week in Antioquia, Medellin, Cali, Valle del Cauca and Bogotá, he said.

The rise in Covid-related deaths “isn’t proportional as in past [Covid-case surges],” he said, as the Omicron variant appears to be less-severe than prior variants – about 40-to-70% less severe.

However, to stem the rising tide of Covid cases, the remaining unvaccinated Colombians should get vaccinated, while vulnerable populations – especially those over 50 years old -- should get the reinforcement shot, he added.

As for children, the Sinovac vaccine appears to be the most effective, with the fewest numbers of side-effects, he added. This is an encouraging sign as more and more Colombian children are returning to in-person classes this year, rather than home-based internet learning.

In total, just 0.05% of vaccinated Colombians have reported adverse side effects from the Covid shots, he said. In contrast, unvaccinated Colombians remain five times more likely to suffer severe illness and death from Covid infections, he added.

A stunning final report from Finland-based hydroelectric-project engineering consultant Pöyry finds that the current contractors building the US$5 billion Hidroituango hydroelectric project in Antioquia should continue to finish the project as quickly as possible, rather than be replaced.

Contractor continuation is the safest and fastest route to avoid a possibly catastrophic collapse of the dam, the report concludes.

The current situation -- where 100% of Cauca River flow goes over Hidroituango’s engineered spillway rather than through still-under-construction power turbines -- eventually could cause catastrophic erosion at the base of the dam, as years-long 100% spillway evacuation was never part of the engineering design, the report finds.

The Pöyry report -- contracted by Hidroituango project manager EPM but until now kept secret – not only fails to support conspiracy narratives pushed by Medellin Mayor Daniel Quintero, who chairs EPM’s Board of Directors.

Instead, the Pöyry report –just unveiled by investigative journalists at IFM Noticias (see: https://ifmnoticias.com/aparecio-el-informe-poyry/) – completely contradicts Quintero’s frantic push to replace the current Hidroituango contractors with some new contractors, who (unlike the current contractors) presumably would become politically beholden to Quintero.

The 427-page report not only reveals details of undiscovered, dangerous geological faults in and around the Hidroituango project – faults that unfortunately triggered an enormously costly 2018 collapse of a crucial diversion tunnel – but also recommends crucial measures to avoid a potentially catastrophic dam collapse.

According to the report, any change of the current project consultants and main contractors would cause a “delay in the definition of mitigation measures and in the execution of stabilization works.

“Changing the main actors in this project should be avoided. It would mean significant delays -- minimum one year -- and reduce the traceability in the recovery of the project. In addition, it will increase the overall cost of the project,” the Pöyry report finds.

“Hiring a new contractor for a project the size of Hidroituango will take several months just to define the terms and conditions. Even more so given that there are still parts of the project where it has not been possible to access or define the repair engineering.

“Considering additionally the history and background of the [2018 diversion-tunnel collapse] contingency, it will be a challenge to find a company or a consortium that accepts these conditions without limitations. All guarantees and global responsibility for the proper execution of the works will be lost.

“On the engineering side of the project, it should be estimated that a new consultant would take months to verify all the information provided and generated by the consultancy before it can develop new engineering with solutions for the completion of the project,” the report adds.

“From the point of view of the project and the main interest in advancing as quickly as possible in starting up the first generation units, a change of the main contractor and the consultancy is not recommended and puts at risk the progress of the works currently accumulated. Additionally, there will be a risk that there will be no immediate attention to emergencies on the ground once the current contractor is demobilized.

“Mitigating this risk requires, above all, the following measures:

“Maintain the level of the reservoir at a maximum level of 408 meters above sea level, in order to:

“(i) Allow time to inspect, frequently enough, the landfill along its length and carry out the necessary maintenance and repair work. During the inspection and execution of maintenance and repair work, the spillway gates will be closed, and a temporary increase in the level of the reservoir would be admissible.

“(ii) Improve the stability of the dam, duly considering that to date a hydraulic effect remains to be clarified that indicates the possible existence of a percolation path not captured by the geophysical exploration.

“(iii) Maintain a wide, free edge in case of tsunamis caused by landslides of the slopes along the reservoir or the right abutment of the dam.

“(iv) Increase the retention volume during flood peaks, at least until a sufficient number of generation units are available to contribute to flood evacuation.

“(v) Implement an intermediate discharge independent of the main intakes on the right bank with sufficient capacity to lower the reservoir level below 380 meters above sea level.

“Based on the analysis carried out by Pöyry, this report concludes that the only feasible and reliable way to ensure the total safety of the project works, thus avoiding major environmental and social disasters in the short, medium and long term, is to complete and operate the project safely, as soon as possible,” the report concludes.

Airplan – the operator of Medellin’s José María Córdova (JMC) international airport in Rionegro – confirms that runway repaving will require a partial halt to flights at JMC on Saturday and Sunday February 19-20, then again on Saturday and Sunday February 26-27.

The two weekend closures – each lasting 36 hours -- start 2-am on each of those two Saturdays and then continue until 2-pm on each of those two Sundays. Airlines are notifying passengers of resulting flight changes.

“The maintenance work will be carried out at two specific points of the runway track that require the intervention of the pavement: milling, removal and disposal of the material to install asphalt layers,” according to Airplan.

“The closing dates were previously arranged with the different airlines that operate at JMC, thus enabling timely notification to passengers and, consequently, the reorganization of flights.”

Second-Runway Talks Underway

Meanwhile, Colombia’s Transport Minister Ángela María Orozco announced January 13 that a multi-government work group is pushing ahead with negotiations that would involve an estimated US$2.78 trillion (US$699 million) expansion of JMC -- including construction of a second landing/take-off runway.

“The investments would be focused on the acquisition of land, a new runway with a length of 3.5 kilometers, a new terminal, taxiways, a connectivity system between terminals, a new control tower, a new perimeter road, an electrical substation and a commercial platform,” according to the Transport Ministry announcement.

The multi-party talks include JMC airport concessionaire Airplan, the departmental government of Antioquia, the Mayor's Office of Medellín, the Mayor's Office of Rionegro, business-promotion group ProAntioquia, the Medellín Chamber of Commerce, the Chamber of Commerce of Oriente and Ferrocarril de Antioquia, according to the Ministry.

“What we want is that all the actors and sectors of the region that are involved in these decisions have the same technical information, to be able to debate what is convenient and what is not, in a framework of transparency and equality,” explained Minister Orozco.

JMC is now handling more than 1.1 million passengers each month -- even despite travel declines caused by the Covid-19 health crisis, according to the Civil Aeronautics authority.

While officials had previously envisioned a second-runway expansion by around 2033, passenger and air-freight traffic at JMC is growing so much that accelerated expansion now would seem more convenient if completed by 2030 or even 2028, according to Civil Aeronautics.

Medellin-based textiles and plastics-recycling specialist Enka de Colombia announced in a January 18 filing with Colombia’s Superfinanciera oversight agency that it has finally completed a financial restructuring that has satisfied its creditors and cut net debt to near-zero.

The company has “successfully completed the restructuring agreement under Law 550 of 1999, after fully complying with the commitments with our creditors, among which were financial entities, suppliers, bondholders and government entities,” according to the filing.

“We do so strengthened as a profitable and solid company, with a net debt level close to zero and ample financing capacity to continue undertaking our growth plans,” the company explained.

“Today the company is a leader in the recycling of post-consumer PET [polyethylene terephthalate] bottles in the country and has the largest PET recycling plant in South America.

“In addition, we are the main producer of ‘Nylon-6’ in America, a strategic ally of the world’s leading tire manufacturers, and the main producer of fibers and synthetic filaments in the Andean region with an export focus,” Enka added.

In 2002, Enka had suffered a financial crisis “due to an economic liability amounting to COP$320 billion [US$80 million], which led us to take advantage of Law 550 of 1999 through a 19-year restructuring agreement, seeking the best alternatives to transform the organization and protect our direct and indirect jobs,” according to the company.

“In 2007, following the debt capitalization plan, we entered the Colombian Stock Exchange, managing to capitalize, that year alone, COP$180 billion [US$45 million] and close to COP$226 billion [US$56.5 million] throughout the agreement, corresponding to 70% of the debts.”

Meanwhile, technological updates “played a relevant role in the growth of the company, enabling us to focus investment on the development of more specialized products and the opening of new high-value markets,” according to Enka.

As a result, in 2009, Enka entered the PET bottle recycling market for manufacture of synthetic fibers, and then in 2014 it launched “bottle-to-bottle PET recycling,” first in Colombia.

“Recycling has become one of the company’s most important and promising businesses. Currently more than 50% of our products are manufactured from recycled raw materials, with which we not only contribute to the environment, but also generate great benefits for the country’s recycling sector,” the company added.

Medellin officially confirmed today (January 13) that it will switch to a two-digit “pico y placa” driving restriction scheme – from 5 am to 8 pm daily -- starting Monday, January 17, initially for a “pedagogic” period, until January 31.

Cars with plate numbers ending in 6 or 9 are restricted starting Monday, switching to numbers 2 and 3 on Tuesday, and so on (see chart, above).

Area Metropolitana de Valle de Aburra (AMVA, the metro-Medellin government coordinating agency) actually announced the new policy, indicating that the other neighboring municipalities north and south of Medellin likewise aim to adopt this scheme.

Initially, vehicles traveling on Las Palmas highway and the La 33 connection to Avenida Regional, plus the entire length of Avenida Regional, plus the La Iguana highway and its laterals (between Carrera 63 and Carrerra 80) will be exempted from controls, as will rural areas of Medellin, according to the announcement.

Colombian banker Jaime Gilinski’s JGDB Holdings and its financing partner Royal Group (Abu Dhabi) on January 12 reported to Bolsa de Valores de Colombia (BVC, Colombia’s stock exchange) that it has finally acquired more than 27% of the shares of Medellin-based multinational foods giant Grupo Nutresa – far short of its 50.1% to 62% goal.

Meanwhile, the JGDB-Royal group simultaneously has now acquired at least 25% of Medellin-based multinational finance giant Grupo Sura -- also far short of any controlling interest.

However, the new shareholdings in Nutresa and Sura assure that Gilinski’s group will gain board seats on those companies, part of the so-called “Grupo Empresarial Antioqueño” (GEA), where each company holds significant shares in the others.

Beyond gaining board seats, no-one knows for sure what Cali, Colombia-born Gilinski proposes in order to make profitable changes with those companies -- although there’s an assumption that his GNB Sudameris bank eventually would merge with Bancolombia, the latter of which Grupo Sura already holds a commanding interest.

There’s also speculation that Gilinski eventually will launch further rounds of stock bids, in order to boost shareholdings above the 50% required for controlling interests.

Gilinski years ago had been in a lengthy legal battle over control of Bancolombia -- a lawsuit that essentially terminated with no winners or losers.

But some see his new shareholding in Sura (with Sura’s simultaneous holding in Bancolombia) as a sort of sweet revenge, given that he and his dollar-rich Abu Dhabi backers bought the new holdings using an historically favorable dollar-to-peso exchange rate.

The total investment by the Gilinski group in the new share acquisitions of Sura and Nutresa are just shy of US$2 billion – providing a big shot-in-the-arm to what had been a sagging Colombia stock market, as the value of the U.S. dollar against the Colombian peso has soared to around COP$4,000/US$1 in recent months.

BVC now only has to certify the Sura/Nutresa stock deals in the next few days, in order to make the Gilinski acquisitions official.

Medellin Mayor Daniel Quintero claimed in a shocking interview for the January 8 edition of Colombia’s leading weekly Semana news-magazine that Medellin’s leading businesses are in fact run by mafia gangsters who supposedly are out to “get” him.

Facing a recall petition for mismanaging the city, for publicly slandering its most successful and civic-minded companies, for potentially wrecking public utility EPM’s finances via demagogic claims that undercut and threatened more than US$1 billion in Hidroituango insurance claims, and for stuffing city agencies and commissions with political hacks -- including many family members -- Quintero has now decided to strike back with claims strikingly similar to the hysterical narratives pushed by former U.S. President Donald Trump.

In the Semana interview, Quintero not only accuses Medellin’s top “Grupo Empresarial Antioquia” (GEA) companies --Grupo Argos, Grupo Sura and Grupo Nutresa -- of being mafiosos, but he also attacks other non-GEA companies including the principal contractors of the US$5 billion Hidroituango hydroelectric dam, former Medellin Mayor and current Colombian presidential candidate Sergio Fajardo, and all supporters of former Colombia President Alvaro Uribe, the founder of the centrist Centro Democratico Party.

Semana editor Vicky Davila was so shocked by Quintero’s allegations that she asked Quintero if he actually realized what he was saying.

“Forgive me, but you are talking about the GEA, Uribismo, Fajardismo, you are not talking about a gang of drug traffickers, nor of a cartel. They are businessmen and politicians. Why do you take them to the point of being mafias?” Davila asked.

To which Quintero responded: “They are associated to achieve their objectives and many are not honest objectives. Tell me how can it be considered honest that those responsible for Hidroituango did not pay? These companies and these politicians came together to make this happen. So they behave like cartels and you have to tell the cartels what they are exactly.

“Here are what they are, some cartels, some mafias, where the GEA, Uribismo, Fajardismo were together, and they all had an agreement to [work together] and then someone independent arrived [that is, Mayor Quintero], put his finger on the problem and that has hurt them a lot.”

Grupo Argos Public Response

In response to Mayor Quintero’s accusations, Grupo Argos issued the following press release:

“January 9, 2022
“Position of Grupo Argos regarding the statements of Daniel Quintero.
“In relation to the statements of Daniel Quintero, Mayor of Medellin, published in Semana magazine on January 8, 2022, Grupo Argos states the following:

“1. We reject the claims that Grupo Argos or its subsidiaries are mafia organizations, comparing them with Pablo Escobar and drug trafficking.

“2. We reject the assertion that suggests that Grupo Argos' shareholding structure is irregular and prohibited in Colombia, which is totally false.

“3. Our organizations [including GEA companies] have never had control of EPM as indicated by Daniel Quintero. EPM is a public-capital company of the municipality of Medellin and no official of Grupo Argos or of its subsidiaries is or has been a member of its Board of Directors.

“4. The statements of Daniel Quintero given to Semana magazine in the course of a takeover bid for shares of Grupo Sura and Grupo Nutresa [by Semana owner Jaime Gilinski and Gilinski's JGDB Holding SAS investment group], which have their shares listed in the public stock market, may negatively affect the perception of national and international investors, being false and misleading.

“5. The company [Grupo Argos] will analyze legal actions for insult, slander, economic panic and any other that may arise.

“Grupo Argos and its more than 13,000 collaborators carry out their business activity within an ethical and transparent framework of action, oriented by the higher purpose of positively transforming people's lives through their investments,” the Argos press release concludes.

Proantioquia Response

Meanwhile, Antioquia’s leading public-private-academic-social-welfare civic-promotion organization Proantioquia issued the following press release in response to Quintero’s allegations:

“January 9, 2022.
“A single truth will not be built from a thousand lies. Proantioquia's pronouncement on the declarations of Mayor Daniel Quintero.

“Medellin and Antioquia have reached important levels of development, well-being and progress due to the joint historical work between government, business, academia and the social sector. Respect for differences has been based on argumentation, constructive dialogue, respect and seeking truth.

“Spreading a narrative with falsehoods and deceptions with the sole purpose of benefiting one's own agenda and not for the common good is very dangerous because it destroys social capital and fractures the necessary trust in which progress, democracy and the entire society lose.

“Antioquian companies have worked with commitment for the region and the country, concerned about solving social challenges, promoting entrepreneurship, and supporting youth, culture and peace. [Grupo Empresarial Antioquia companies] today generate more than 100,000 direct jobs and hundreds of thousands more indirect jobs, which translate into opportunities and progress for Antioquian and Colombian families. Comparing these companies to a mafia cartel shows lack of respect to their employees, shareholders, suppliers and clients, in addition to lacking any purpose.

“This lie hurts the city, the dignity of Medellin, ignores the historic horrors we suffered and what we managed to overcome through the sum of efforts, capabilities, leadership, resources, kindness and solidarity. With teamwork, with respect and trust, we managed to overcome the uncertain and fearful episodes of the violent past. This has been due to the commitment of the institutions, the business community, the NGOs [non-governmental organizations] and the public that we have recovered from adversity and we continue to move forward.

“We still face immense challenges to restore and build the splendor of Medellin and Antioquia, but these challenges must be faced with dignity, recognizing our progress and working to continue advancing.

“Citizens must have a critical attitude about what they hear, understand reality based on facts, figures, actions and look closely at the history of the city. Accomplishments speak for themselves. We must avoid the contagion of a narrative using disqualifying phrases and straying far from the truth. Many times those who designate themselves as saviors are really destroyers of democracy and public trust.

“Companies such as Grupo Sura, Grupo Nutresa and Grupo Argos have the highest business, environmental, social, labor and cultural standards. Antioquia is proud of them and of many others who contribute, day by day, to achieve what we are, and who will also be the foundations of the future.

“We join the voices of those who raise the urgent need to rescue trust, to appeal to the civic spirit and the collective construction of social capital. A single truth cannot be built from a thousand lies."

[Signed]
Miguel Escobar Penagos, Vice President of the Board of Directors, Proantiquia
Maria Bibiana Botero Carrera, Executive President, Proantioquia

Grupo Sura Response

In a similar vein, Grupo Sura issued the following response to Quintero’s attacks:

“Grupo Sura press release
“09 January 2022

“Faced with the statements given by the Mayor of Medellin, Daniel Quintero Calle, to Semana magazine on January 8, 2022, Grupo de Inversiones Suramericana (Grupo Sura) expresses its position:

“1. We categorically reject the declarations of the Mayor of Medellin by means of which he attacks in an unscrupulous, tendentious and false manner the companies related to Grupo Sura and especially its investors, shareholders, clients, suppliers, advisers and collaborators.

“2. The statements of Daniel Quintero, in which he equates our company and the companies with which we share philosophical and patrimonial ties with ‘mafia practices,’ in addition to being lies, are irresponsible with all the investors and in particular with the citizens of Medellin, and with the thousands of employees of these companies, throughout the nation and the Latin American territory.

“3. The so-called ‘Grupo Empresarial Antioqueño’ or ‘GEA’ as referred to by Mayor Quintero is not a business group as that term is defined in Article 28 of the 1995 law. The ownership structure of Grupo Sura and others companies referred to by Mayor Quintero is perfectly legal. The Mayor's accusations -- according to which the shareholding model of said companies are [supposedly] irregular or prohibited -- are false.

“4. It is extremely serious that a public official uses his position to lie and attack without any basis people and entities that by constitutional mandate he must protect, with dishonorable charges and the false claim of incurring in illegalities, aggravated by in this case the person who holds the position of Mayor. Systematically, the Mayor has been false, disorienting public opinion and has affected democratic institutions by deepening mistrust in public administration with accusations that have no basis in reality.

“5. Grupo Sura reiterates that it has never had institutional representation on the EPM board of directors or in any other public entity. Those who have participated there in the past have done so exclusively as private persons.

“6. Grupo Sura is respectful of the democratic institutions for which it has always maintained total independence: We have never had our own candidates, much less have acted as a political party, nor have we hindered the work of any Mayor of the city. Grupo Sura has not promoted or promoted the recall of the Mayor as he claims. Transparency and adherence to the principles of Grupo Sura have been evident in the actions and historical commitment to the development of Medellin and Colombia.

“7. The Mayor's statements lead to a dangerous distortion in the confidence of the public securities market and the perceptions of national and foreign investors, all of which causes not only concern but also damage to the company. However, despite the attack suffered at the request of the Mayor of Medellin, Grupo Sura insists on continuing to respect and defend democratic principles.”

Grupo Nutresa Response

One day later, food-and-nutrition giant Grupo Nutresa issued its own response to Mayor Quintero's allegations.  Here is their full press release:

"Gropo Nutresa Press Release
"10 January 2022

"Faced with the statements of the Mayor of Medellin Daniel Quintero Calle, an interview published by Semana on January 8, 2022, Grupo Nutresa SA has the following response:

"1. Grupo Nutresa categorically rejects the lying and irresponsible allegations that is a mafioso and dishonest organization. These statements, totally false, are an offense to our investors, employees, suppliers and clients, and they ignore the enormous effort, for more than 100 years, to do business and generate development in all the regions where we operate.

"2. Grupo Nutresa's ownership structure is completely legal. Suggesting otherwise is ignoring the truth.

"3. Grupo Nutresa has never taken-over or controlled Empresas Publicas de Medellin [EPM]. We do not receive any type of income from EPM; no person of ours has participated in representation of Grupo Nutresa on the EPM board of directors, and no EPM employee has obtained any position there at the request of Grupo Nutresa. Grupo Nutresa's relationship with EPM is solely that of the customer-supplier type. EPM provides electric energy, natural gas, water and sewerage services.

"4. The statements of Mayor Quintero are missing the truth. The statements constitute a malicious attack that could deteriorate the reputation and trust not only of this organization and its investments, but also of the Colombian stock market, a fact that could generate serious economic impacts.

"5. We respect democracy and believe in the importance of preserving and strengthening the institutions for the progress of the country. We see participation in the construction of the public welfare as a responsibility with criteria of transparency, efficiency and always seeking the common good. We have not led or financed the revocation process underway against the Mayor of Medellin.

"Solutions to the biggest problems of the city and the country do not begin with the destruction of social capital and the attack on business activity. The challenges are great and require everyone's input.

"Every day more than 45,000 Grupo Nutresa employees work with integrity to make the organization's purpose come true: to build a better world where development is for everyone," the statement concludes.

Colombia Vice President Marta Lucía Ramírez announced January 5 the addition of US$397 million in financing deals supporting the US$627 million “Puerto Antioquia” ocean freight project near Turbo, Antioquia.

Part of the new funds will come via the privately held Financiera de Desarrollo Nacional (FDN) group, which just confirmed a US$103.7 million loan package involving JP Morgan including a loan guarantee from the Multilateral Investment Guarantee Agency (MIGA).

Another part of the new funding comes from the Inter-American Development Bank Group with US$200 million, plus US$30 million from Colombia’s Bancoldex import-export promotion agency and US$60 million from the Davivienda bank group here, according to FDN.

The JP Morgan loan carries a 16-years payback term with a four-year grace period, according to FDN. “The loan will be amortized in 47 quarterly installments from the expiration of the grace period,” according to FDN, whose shareholders include Grupo Bicentenario, IFC, Sumitomo Mitsui Banking Corporation and CAF.

According to FDN, “the port is expected to start operating in 2025 and reduce logistics costs by improving competitiveness and allowing the development of small and medium-sized producers, which have been restricted, in part, by limited access to ports, and competition by the quotas offered in the boats that transport agricultural products.”

The new port also will “promote the creation of 11,600 new companies and US$24.4 million per year in tax payments,” according to FDN.

The total estimated capital cost of US$672.4 million includes debt finance (59.6% of the total, or US$393.7 million), with the remaining 40.4% (equivalent to US$280 million) in capital finance to be provided by the project partners.

“When compared with the other alternative ports in the Caribbean for cargo transportation, Puerto Antioquia represents a cost savings of 44% and 41% in distance for Medellín, 37% in costs and 33% in distance from the coffee region, ands 17% in costs and 25% in distance from Bogotá,” according to FDN.

The port will enjoy new highway connections via the under-construction Mar 1, Mar 2 and Toyo Tunnel highway projects in Antioquia, due for completion over the next two-to-four years.

The annual capacity of Puerto Antioquia will enable shipping of 600,000 twenty-foot-container-equivalent units in dry and refrigerated containers, 3 million tons of bulk cargo and 1.15 million tons of general cargo, according to FDN.

The private-sector capital sponsors of the project include global shipping giant CMA Terminals (22% share); Pio S.A.S. (11.1%); Eiffage Infrastructures S.A.S (22%); Termotécnica Coindustrial (5.17%); banana exporter Uniban (15.51%); Agrícola Santamaría (5.69%); Banafrut (4.14%); CI Tropical (6.21%); and Unión Para la Infraestructura (8.21%), the latter of which is backed by Credicorp Capital Asset Management and Sura Asset Management, according to FDN.

Medellin-based electric power giant EPM announced last night (December 23) that in addition to the US$983.4 million (COP$3.84 trillion) that project insurer Mapfre is paying for Hidroituango hydroelectric-project damages, Medellin-based insurance giant Sura just paid an additional US$100.6 million for “civil director” claims also arising from a 2018 diversion-tunnel collapse at Hidroituango.

In addition, lesser insurers Axa and SBS likewise just contributed US$5.3 million and US$500,000 toward the “civil director” insurance claims, according to EPM -- bringing the grand total of all insurance payoffs for Hidroituango to US$1.1 billion (COP$4.3 trillion).

As a result of these final payoffs, from now on EPM will self-insure against possible future damages at Hidroituango, according to the company.

EPM Forfeits Favorable US$450 Million IDB Loan

Meanwhile, on another front, EPM announced December 23 that it has now paid-off and forfeited a favorable US$450 million loan from the Interamerican Development Bank (IDB) for Hidroituango financing – as demanded by IDB as a result of an earlier Colombian Controller-General claim against 28 contractors, politicians, officials and insurers accused of “gross negligence” that supposedly contributed to a diversion-tunnel collapse at Hidroituango.

Colombia’s undemocratic system of Controller-General prosecutions and persecutions against companies and individuals utterly lacks the normal due-process guarantees given to all citizens and companies in democratic nations such as in North America and Europe.

Without constitutional guarantees of the right to bring a proper legal defense against prosecution -- along with an independent judiciary that ought to adjudicate such Controller-General claims – more companies will think twice about investing in Colombia, as the three major Hidroituango contractors have publicly warned here.

Such lack of reasonable, constitutional legal guarantees for all defendants could cost Colombia tens of billions of dollars in investments in urgently needed infrastructure projects, while simultaneously hobbling jobs growth, tax revenues and economic/social progress -- as many private companies, labor unions, trade associations, independent news organizations and civic-minded politicians have publicly warned here.

Medellin-based electric power giant EPM announced this afternoon (December 16) that it just finalized an agreement with the existing, principal constructors of the US$5 billion Hidroituango hydroelectric plant -- hence enabling continued construction through November 2022.

The deal includes an eight-months extension seen required to finish current installations that would guarantee start-up of the first power turbine in July 2022, and then start-up of a second turbine in November 2022 -- plus three months for training a new set of contractors expected during a hand-over period.

The 11-months contract extension deal comes on the heels of a December 10 agreement between Colombia’s Controller-General, EPM and Hidroituango project insurer Mapfre, which guarantees that Mapfre will pay US$983.4 million (COP$3.84 trillion) supposedly to cover Hidroituango damages, or else 90% of the projected cost to finish construction.

The other 10% supposedly would be covered by parallel policies with three lesser insurers to the project, including Medellin-based insurance giant Sura.

Still unresolved is a parallel COP$9.9 trillion (US$2.4 billion) damages lawsuit EPM earlier brought separately against the Hidroituango construction contractors, designers and consultants, a claim that -- if eventually upheld by some future court ruling -- would be cut by about half because of the Mapfre and other insurer payments.

According to Medellin Mayor Daniel Quintero (who chairs the EPM board of directors) that “other half” of damages claims – totaling roughly US$1 billion – supposedly would cover insurance deductibles and the cost of nearly four years of lost power sales, all caused by the 2018 collapse of a diversion tunnel at Hidroituango, setting-back completion by four years.

In a December 16 press release following EPM’s announcement of the Hidroituango contract extension, the “CCC Ituango Consortium” – including the three major contractors (Camargo Correa, Conconcreto and Coninsa Ramon H) – confirmed that they are almost certain to be excluded from the upcoming public bidding round to replace the existing EPM construction contract.

However, thanks to the Mapfre insurance payment, the three contractors wouldn’t be barred from participating in any other future local or national Colombian construction contracts, according to the CCC Ituango statement.

“The agreement between the CCC Ituango Consortium and EPM was achieved after the evaluation of the mitigation of the risks derived from the fiscal responsibility ruling issued by the Controller-General, which according to the statements of the Controller General of the Republic Carlos Felipe Córdoba, on the occasion of the agreement between EPM and Mapfre Seguros Generales de Colombia for the payment of compensation under the ‘All Risk Construction policy,’ at the moment the [insurance payment] resources enter [EPM’s coffers], any disability, any sanction, any effect due to rulings of the Comptroller General of the Republic” are nullified.

“We are grateful for the participation of President Iván Duque and of all the people who made possible the payment commitment of the insurers for the loss that occurred in the project.

“EPM’s decision to continue with the CCC Ituango Consortium [for the next 11 months] is a sign of confidence in our execution capacity and the quality of our services, and with this extension we reaffirm our commitment to execute as many works as possible in the defined period by EPM, so that the project objectives can be achieved,” according to the CCC Ituango Consortium statement.

However, thanks to certain questionable public accusations and political demagoguery employed by Medellin Mayor Quintero (and to a lesser extent by Controller-General Carlos Felipe Cordoba) in describing supposed construction/design errors, supposed “substandard materials” and non-specific allegations of “corruption,” the current contractors have suffered damage to their professional reputations – and Colombia has become a question-mark for foreign investors viewing the total lack of legal due-process in the prosecution and persecution against the contractors (at least to date), all despite what the contractors claim was the result of an undiscovered geological fault alongside the collapsed diversion tunnel -- and not any errors, substandard materials nor “corruption.”

Meanwhile, EPM, its electricity ratepayers, Medellin’s citizens (the actual owners of EPM) and the Colombian and international business sectors now can only hope that whatever future Hidroituango replacement contractors somehow (perhaps miraculously) will get up-to-speed inside the designated three-months hand-over period and complete the Hidroituango project on-time (by 2025, when all eight power turbines are supposed to be running), on-budget and on-quality.

But if Hidroituango isn’t well on-its-way to completion by 2025, then Medellin Mayor Quintero – who will have already left office by then (his term ends January 1, 2024) -- could see his political legacy sour thanks to his frenzied push to terminate the existing contractors, a decision that now puts Hidroituango’s timely completion at risk.