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Chile Faces Dispute Over $740M Bridge

Friday, January 3, 2020

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Late last month, an ongoing dispute between Chile government and South Korean company Hyundai Engineering and Construction over a $740 million bridge project was addressed by the country’s finance minister. At the time, the finance minister said that such disputes in such large-scale projects were common.

According to Reuters, Hyundai has suspended project construction in the meantime. The company alleges that country government sought to expand the project without providing additional financial compensation. The bridge will connect Chile with the island of Chiloe, which currently only has a ferry as a mode of transit to the mainland.

Chile Bridge Project

The Chacao Bridge project, once complete, will reportedly be the longest suspension bridge in Latin America. Although construction was originally scheduled to start in 2007, the project was cancelled. Endeavors restarted in 2012, and bridge design commenced in February 2014. Hyundai Engineering and Construction serves as leader for the Consorcio Puente Chacao, which won the tender for bridge construction in 2013. The project was first proposed in 1972, and construction commenced in 2018.

In February, Chile’s Ministry of Public Works approved the final bridge design, which included a 100-year lifespan, three reinforced concrete pylons, a 23.8-meter-wide  (roughly 78-foot-wide) bridge deck and the ability to support four lanes of traffic. Plans for the structure also feature a 324-meter-long suspended north span, two main spans—each totaling 1.1 kilometer (.68 miles) and 1 kilometer, respectively—and a 140-meter-long south approach viaduct.

According to New Civil Engineer, Hyundai, OAS, Systra and Aas-Jakobsen are working as a joint venture on construction. Cowi is overseeing the design review and supervision of the project.

Where the bridge is being built is also a challenge in and of itself: Located 80 kilometers away from seismic fault zone, the area has previously been subject to some severe earthquakes.

“Designing a structure for such a challenging environment brings with it many complications and challenges, so it is extremely satisfying to receive official approval, knowing that all the hard work will soon materialise into a finished project,” said Hisham Ibrahim, Cowi project manager, in early 2019.

Recent Challenges

Late last month, Hyundai Engineering and Construction told Reuters in a statement that despite the suspension of work, construction was still underway. Finance Minister Ignacio Briones also voiced his confidence that the dispute could be sorted out through talks or in the courts, adding that discrepancies will be “for the courts—if it gets to that point—to decide.”

HDEC also alleged that the government’s Department of Public Works, along with its legal team, had recently said that the project value would not be increased. HDEC also noted that “the breach of commitments” and “the unjust damage that results from this and the complete legal uncertainty that prevails as a consequence” had led the “CPC to conclude that it is impossible, in these conditions, to continue with the project.”

In turn, the government’s Department of Public Works claimed that HDEC sought to increase the project cost by $300 million, or roughly 50%, which was rejected by government. Chile Minister of Public Works Alfred Moreno noted that the contract “included design, engineering and construction,” adding, “all the responsibility and risk lies with the contractor.”

Local communites have called on Moreno to be more amenabl to reaching an agreement with the company.

   

Tagged categories: Bridges; Infrastructure; Ongoing projects; Program/Project Management; Project Management; SA; South America

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