EPM Awards Hidroituango Completion Contract to China’s Yellow River Ltd.

EPM announced this morning (October 11) that it has finalized an estimated COP$1 trillion (US$236 million) contract with China-based Yellow River Ltd. (Colombia branch) and Colombia-based Schrader Camargo to complete the final-phase construction of the 2.4-gigawatt Hidroituango hydroelectric plant here in Antioquia.

Those two companies – dubbed “CYS Consortium” – outbid Italy-based Todini Construction and China Gezhouba Group to finish generation units 5, 6, 7 and 8 at Hidroituango.

Units 1 and 2 are already operating, while units 3 and 4 are supposed to be operational by year-end — barring further construction delays.

Those first four power-generating units (1 through 4), according to EPM, comprise the “first stage” of the Hidroituango project, accounting for 1.2-gigawatts of power output capacity.

However, nearly two years ago, EPM essentially fired the original contractors (CCC Ituango Consortium) following a 2018 diversion-tunnel collapse — which (ironically), according to an exhaustive engineering study by Poyry Consultants, wasn’t their fault.

According to EPM’s current version of Hidroituango contracting history, “on November 30, 2022, the contract with the CCC Ituango Consortium ended, made up of the firms Camargo Correa Infra (Brazil), Constructora Conconcreto (Colombia) and Coninsa-Ramón H (Colombia), which was in charge of the construction of the main civil works of the first stage.

“The termination of this contract occurred due to the expiration of the contractual term and after the Consortium’s decision to decline EPM’s request to continue the missing civil works of generation units 3 and 4, under a remuneration scheme for unit prices, due to greater efficiency for EPM.

“As of December 1, 2022, the Colombian company Schrader Camargo S.A.S., after a contracting process, assumed the execution of the missing civil works for generation units 3 and 4 and complementary works of the Ituango Hydroelectric Project, showing good performance,” EPM added.

Last year, the CYS Consortium had submitted an initial, prior bid to complete Hidroituango. But EPM rejected that bid in part because CYS was the sole bidder and also because CYS “did not provide, within the period established for this, the evidence that would prove a participation requirement in accordance with what was requested in the particular conditions of the process,” according to EPM.

In the second bid round (launched April 24, 2023), EPM rejected competing bids from Todini Construction and China Gezhouba Group, for alleged omissions in finance-documentation details.

Now, under the newly finalized CYS contract, Hidroituango construction completion “will allow greater economic efficiency, control of costs and execution because EPM will pay the contractor under a unit-price scheme, as was done before the [diversion-tunnel-collapse] contingency that occurred in 2018,” according to EPM

“In this process, EPM has had the support of the Procurador-General within the framework of its legal function.

“Each of the 8 Hidroituango generation units has an installed capacity of 300 megawatts of energy for the National Interconnected System (SIN), for a total of 2,400 megawatts, corresponding to 17% of the energy that the country needs to continue growing and contribute to the quality of life of millions of Colombians,” EPM added.