Peru wants Odebrecht to pay more than $25m to settle bribery case

Peru’s President Pedro Pablo Kuczynski wants Odebrecht to be fined nearly the same amount the construction firm has admitted to paying in bribes to win public works projects in the country.

Odebrecht this week agreed to make an upfront payment of $9m in a preliminary deal with Peruvian prosecutors as the company prepares to cooperate with the investigation.

But in comments to Peru’s RPP TV station on Friday, Kuczynski said the company should pay more.

Odebrecht should “at least pay some PEN90m [$26.4m], which was the alleged amount of the bribes, plus penalties and fines that could rise into the hundreds of millions” of soles, he said.

In a plea agreement with US, Brazilian and Swiss authorities last month, Odebrecht, Latin America’s largest construction company, admitted to paying more than $1bn in bribes between 2001 and 2014 in 12 countries, most of them in Latin America. In Peru, the Brazilian builder won $12bn in contracts during that time, including the $6.5bn Gasoducto Sur Peruano (GSP) natural gas pipeline in 2014, after the only other bidder was disqualified on auction day.

Odebrecht owns 55% of GSP, but is looking to selling its stake in the pipeline. Finance Minister Alfredo Thorne recently said that Canadian investor Brookfield could buy a majority stake in the project. Kuczynski said in the interview that “one or two investment funds from Canada and the United States could complete the group” that also includes Grana y Montero and Enagas. According to media reports, China National Petroleum Corp (CNPC) may also be interested in acquiring Odebrecht’s share.

Since the announcement of the plea deal, at least three Latin American countries – Ecuador, Panama and Peru – have banned Odebrecht from bidding on new public works contracts as local authorities conduct probes into the company’s business practices.

Kuczynski said any companies involved in Odebrecht’s efforts to pay bribes will also be prohibited from bidding on public works projects in Peru.

Outside Brazil, the countries where Odebrecht also admitted to paying bribes include Angola, Argentina, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama and Venezuela. Government officials in Panama have called on the company to return the money it earned in projects where it paid bribes.