Government May Take Control of Airport in 2005

December 3, 2004

THE Costa Rican government willassume control of Juan SantamaríaInternational Airport starting Jan. 15,2005, if an agreement is not reached bythen between government officials andairport operator Alterra Partners, a governmentofficial said last week.Minister of Public Works andTransport Randall Quirós told the presshe hopes the two parties will come to asolution soon in a nearly two-year-olddispute regarding Alterra’s 20-year contractto operate and renovate the airport.The minister’s announcement comesafter Alterra’s recent loss in arbitrationcourt seeking $79.1 million for losses anddamages regarding the contract, whichwas signed in 2001 (TT, Nov. 19).The arbitration panel denied theindemnification, determining the disputewas not a matter of arbitration, but somethingto be decided in an administrativeappeals court.ALTERRA and government officialsannounced after the court’s decision theywould return to the negotiating table tosettle the dispute, which has halted renovationof the airport since March 2003.At that time, a report by theComptroller General raised questionsabout some of the airport user feescharged by Alterra, whose major partneris construction giant Bechtel (TT, March28, 2003).Alterra maintains it is able to use airportfees to collect $18.6 million indevelopment and financing expenses. Thecomptroller’s report puts that amount at$3.4 million.Because of the dispute, foreign banksthat have provided financing for the airport’smajor renovation suspended thelast $30 million of Alterra’s $120 millionloan (TT, June 27, 2003).Transparency International Costa Ricasent a letter to President Abel Pachecothis week expressing concern about thetransparency of negotiations regardingthe execution of the Alterra contract.The organization requested all negotiationsbe open to the public.

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