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Dominican government seized Spanish assets and must pay USD 45 Million

(foxnews.com) – A Spanish construction company accused the Dominican government of  seizing its assets and not complying with an international arbitration  ruling requiring it to pay $45 million in compensation.

Concesionaria  Dominicana de Autopistas y Carreteras, or Codaxa, which also has U.S.  and Dominican shareholders, accuses the Caribbean country’s “recent  governments” of “systematically” failing to comply with the terms of a  2001 concession contract for the construction, maintenance and operation  of the San Pedro de Macoris-La Romana highway.

CEO Roberto Garcia  told Efe Friday that a representative of the Public Works Ministry -  escorted by a group of soldiers – expelled the company’s staff from the  highway last Saturday.

That action followed a ruling by the  Paris-based International Chamber of Commerce establishing the amount of  compensation owed to the firm.

In that arbitration award, handed  down in late May, the ICC said the Dominican government had failed to  comply with “the main contractual clauses and that the Public Works  Ministry’s accusations were “reckless,” Garcia said.

The Spanish  firm said the contract required the Dominican government to provide it  with guarantees against exchange rate risk – necessary because currency  fluctuations could affect repayment of a loan taken out to finance the project – but that it failed to comply with that obligation.

The  government also failed to meet its obligation to create a “shadow toll”  to make up for what the company was prohibited from charging users in  the form of direct payments, paralyzed construction of two toll stations  and did not comply with a plan to expropriate land for the construction  of the highway, Garcia told Efe.

According to the executive,  former Public Works Minister Victor Diaz Rua, who stepped down from his  post on Thursday, had pressured the company since 2008 to sell the  highway to other companies.

Codaxa took the matter to an  international arbitration panel, which issued a ruling ordering the  Dominican government to pay compensation by a July 31 deadline and the  company to return the highway.

Garcia said it has tried to meet  with government representatives since the arbitration ruling was  announced but has received no response.

These circumstances have  forced the firm to begin the process of firing its more than 200  workers, all of them Dominican, he added.

Asked about the dispute,  the former public works minister said the company had pledged to build  the San Pedro de Macoris-La Romana highway but only completed one  stretch of the road with state funding.

“They didn’t complete anything, they’re a bunch of swindlers,” Diaz Rua said in remarks to local media.

Responding  to those accusations, Garcia said Diaz Rua “lies in everything he says”  and recalled that the company invested $7 million in expectation that  the government would keep its promises.

Garcia said that the  company has the support of the Spanish Embassy and that it hopes that  under the administration of new President Danilo Medina, who was sworn  in Thursday, “the illegal behavior of the outgoing government will be  corrected.”

Source: Dominican Watchdog

 

Category: DR News |

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Last updated December 9, 2016 at 7:25 PM
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