Airport Contract Dispute Remained Up in the Air

December 21, 2007

A long-standing contract dispute over the financing of the expansion of the country’s main airport dragged on all year, and no end was in sight as 2007 wound to a close.

Fortunately, the actual construction continued along with the contractual disagreements, and JuanSantamaríaInternationalAirport saw two new boarding bridges and eight new gates open in early December in time for the tourism high season.

The year’s developments continued to pit the banks financing the airport expansion – headed by the International Finance Corporation (IFC) – against the Costa Rican government.

The banks didn’t want to lend the remaining $48 million needed to finish phase two of the expansion until they received some guarantee that the government would allow airport manager Alterra Partners generous enough provisions in a contract addendum to earn fees to pay the money back.

The situation seemed to come to a head in June when the government laid out five conditions that the banks then rejected.

Both sides appeared to give ground in September, with the government agreeing to a five-year extension of Alterra’s contract and the banks agreeing to drop their demand for a $9 million cap on fines that could be levied on Alterra for delays.

But by the end of the year, both sides continued the back-room haggling.

 

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