EPM Extends Construction, Supervisory Contracts with Hidroituango Hydroelectric Builders

Medellin-based electric power giant EPM announced December 22 that it reached agreements with all current construction, supervisory and consultancy companies to continue construction of the estimated US$5 billion, 2.4-gigawatt Hidroituango hydroelectric dam in Antioquia.

The contract renewals run through December 31, 2021, but could be extended until the entire project is completed, likely in 2024.

EPM general manager Álvaro Guillermo Rendón López added that “some clauses were included that will allow the contract to be extended — once future validations are completed — until the end of the project.”

CCC Ituango construction consortium leader Juan Luis Aristizábal Vélez — president of construction giant Conconcreto — added that “the signing of this contract is a sign of commitment to the project,” as it avoids costly problems that would arise if some new contractor were forced to take-over the project.

The three new contract extensions include:

1. Consulting via Consorcio Generación Ituango, which includes Integral Ingeniería de Supervisión S.A.S. and Integral Ingeniería de Consulta S.A.

2. Auditing services for civil works and electromechanical equipment, via Ingetec-Sedic Consortium.

3. Continuing construction of the dam works, power plant and associated projects via the CCC Ituango Consortium, which includes Camargo Corrêa Infra S.A, Constructora Conconcreto S.A. and Coninsa-Ramón H. S.A..

During 2021, “extension of these contracts will be sought to the extent that EPM has the assigned budgetary resources and all technical and legal requirements are met,” according to EPM.

“The three main contractors have expressed their desire and commitment to continue advancing in the development of the project and take it until commissioning,” with the first portion of power generation scheduled to start in 2022 and the final set of generation units starting-up in 2024.

EPM’s biggest trade union Sinpro praised the new agreement that extends the existing contracts — even in the face of EPM’s questionable “conciliation” lawsuit against the current contractors as pushed by Medellin Mayor Daniel Quintero and EPM’s new general manager this year.

That lawsuit could have prompted the current contractors to abandon the project, adding even more delays that could have resulted in hundreds of millions of dollars of lost power sales and regulatory power-provision penalties, Sinpro explained.

Meanwhile, “conciliation” lawsuit talks continue, with hopes that all parties soon come to a friendly agreement that would resolve confusing, contradictory claims about responsibilities for an earlier tunnel collapse at the project. EPM claims that financial damages resulting from the tunnel collapse total COP$9.9 trillion (US$2.8 billion). 

However, lacking a reasonable, fair settlement of such claims among all responsible parties (including EPM itself, which shares at least some blame), EPM’s lawsuit potentially could endanger hundreds of millions of dollars of existing Hidroituango insurance payments — and trigger counter-suits that potentially could cost EPM billions of dollars, according to Sinpro.