Odebrecht Moves to Address Correa Allegations

Brazilian infrastructure firm Odebrecht moved late yesterday to address allegations and fierce action by Ecuador’s president. Rafael Correa has alleged that Odebrecht acted irresponsibly when building Hidroelectrica San Francisco, an underground hydro dam located in central Ecuador that malfunctioned within a year of completion. But Odebrecht claims the dam was completed 9 months ahead of schedule, generating $43m in additional revenues to the government, and malfunctioned because of a volcano eruption that increased the amount of sediment flowing through, causing a stoppage. The infrastructure developer says it is willing to pay the government $25m in reparation, and to extend the guarantee for malfunction by another year, though is requesting $44m be deposited in an account as a guarantee. Two days ago Correa issued a decree blocking the departure of two senior Odebrecht officials from Ecuador until the company pays damages. Of those, directors Fabio Andreani Gandolfo and Fernando Bessa, have fled to the Brazilian embassy for protection, an Odebrecht official tells LatinFinance. President Lula reportedly raised the issue in a meeting with Correa in New York this week.