Autopista Rio Magdalena delays April 2019

Aleatica SA subsidiary Autopista Rio Magdalena (ARM) announced April 8, 2019 that it has cancelled its highway construction contract with Obrascon Huarte Lain SA (OHL) and is seeking a new contractor.

The partially completed ARM highway project aims to connect Remedios in northern Antioquia with the “Ruta del Sol” fourth-generation (4g) highway via a new bridge over the Rio Magdalena near Puerto Berrio, Antioquia.

According to ARM, OHL allegedly failed to comply with contract terms including “significant delays” in construction works, despite a COP$150 billion (US$50 million) advanced given to OHL to push forward the project.

Aleatica has notified Colombia’s infrastructure-development oversight agency Agencia Nacional de Infraestructura (ANI) about the contract termination.

Meanwhile, Aleatica is working to find a new contractor in order to restart the project “as soon as possible,” according to the company.

So far, Aleatica has invested more than COP$600 billion (US$300 million) in the project, without tapping any government funds, according to the company.

The ARM project includes 155 kilometers of two-lane highway as well as a 1,360-meters-long bridge over the Rio Magdalena. The highway would boost competitiveness of Antioquia’s industries by improving access to Ruta del Sol and the Caribbean coast.

Aleatica is involved in 14 development projects covering 1,087 kilometers mainly in Latin America as well as Spain, with investments topping COP$17 billion (US$5.8 billion), according to the company, which is owned by 27 Australian pension funds and managed by IFM Investors.