Controller-General Absolves Companies, Officials for 2018 Hidroituango Tunnel Collapse; EPM Reports More Progress
Colombia’s Controller-General announced today (January 28) that because of recent insurance payments to EPM by Mapfre, Axxa, Suramericana and SBS – collectively totaling US$1.1 billion — all companies, politicians and officials who previously faced allegations of errors or omissions that supposedly contributed to a 2018 diversion-tunnel collapse at the US$5 billion Hidroituango hydroelectric project are now absolved of fiscal responsibility.
“The Controller’s Office declares the property damage of COP$4.3 trillion [US$1.1 billion] in the Hidroituango case fully repaired,” according to the Controller’s official announcement.
“By virtue of this decision, the precautionary measures that weighed on those declared fiscally responsible are lifted” — hence liberating 26 companies and individuals that previously were facing fiscal responsibility charges, according to the Controller.
Because of the Hidroituango insurance payments, the Controller “determined and declared that the damage has been fully repaired,” according to the official announcement.
In the wake of the Controller’s decision, Wall Street bond rater Fitch Ratings subsequently announced that it now sees financial liquidity improving not only for EPM (part-owner of Hidroituango) but also for the construction and consulting contractors at the Hidroituango project.
While Fitch now has a more positive view of EPM’s financial liquidity, the bond rater nevertheless has continued its “negative watch” alert because of “continued uncertainty regarding the permanent closure of Hidroituango’s blocked water deviation tunnel since April 28, 2018, and final cost overruns of its Hidroituango project, which Fitch estimates to be US$1.73 billion or US$721,000 per megawatt (MW) as of December 2021.
Hidroituango Progress Update
Immediately following the Controller’s announcement, EPM revealed that it is making significant progress on permanent closure of that collapsed diversion tunnel.
“In 2019, as a result of the tunnel-collapse contingency, the two floodgates installed for this diversion tunnel — weighing 300 tons each — were closed to prevent further passage of water,” according to EPM’s announcement.
“In recent days it became possible to enter the [collapsed] Auxiliary Deviation Gallery (GAD), very positive for the recovery of the project and for the tranquility of the downstream communities.
“With the pumping-out of the water that was in this tunnel area, it was possible to allow entry of sufficient personnel and machinery to carry out the proper cleaning and extraction of debris and mud. After the adaptation and cleaning of the GAD, the construction of the two definitive plugs — 22 meters long — will need to be installed there,” according to EPM.
In total, the Hidroituango project at year-end 2021 was 86.9% complete, with entry-into-operation of the first two generating units — totalling 600-MW — seen in the second half of 2022, according to EPM.
“The powerhouse shows considerable progress in its recovery, civil works and assembly of equipment,” according to EPM, while the water reservoir upstream of the dam and the engineered spillway “are closely monitored with permanent with special equipment and expert personnel,” the company added.