The public works in Chinese hands exceeds $ 8 billion

Ecuadornews:

On September 26, 2011, after four extensions that delayed delivery of the work in one year, the fourth segmental bridge over the Babahoyo river, which links Durán with La Puntilla, was inaugurated in Guayaquil.

The construction of the viaduct, at the hands of the Chinese firm Guangxi Road & Bridge Engineering Corporation, was contracted in 2008 by the government of Rafael Correa and marked the beginning of a dominant participation of companies of that nationality in the intervention of large projects financed with resources fiscal.

However, problems due to the quality of the work, environmental conflicts and irregularities in the contractual processes have put various Asian contractors in the eye of the storm. A recent example is the Coca Codo Sinclair hydroelectric dam, one of the most expensive public works in the history of the country, in which engineering failures and contractual anomalies have been detected.

To know the universe of contracts and the amount invested by the Government in these processes in the last 10 years, EXPRESO cross-checked the information of the processes published in the Public Purchases portal, the reports of the contracting entities in its official pages and audit reports from the General Comptroller of the State.

This newspaper found 74 contracts for a total of $ 7,909’795,654.20. The figure corresponds to amounts of original contracts and does not include extra payments for supplements, work orders and differences in work quantities.

The contracted value is distributed among 19 Chinese companies. The list is headed by Sinohydro, with eight works for $ 2,659,995,805.55, including the construction of the Coca Codo Sinclair hydroelectric plant ($ 1,979,700,000) and the Minas de Huascachaca wind project ($ 96,894,411.56). ), the Los Ceibos IESS hospital ($ 200,275,473.10) – in the latter, as part of a consortium – as well as the rehabilitation and maintenance of roads ($ 367,016,980.74).

He is seconded by Harbin Electric International, responsible for projects such as the assembly and maintenance of the 500 kilovolt transmission line in the country ($ 592,109,018) and the construction of the Minas-San Francisco hydroelectric plant ($ 464,834,700.49) the Esmeraldas II thermal power plant ($ 101,400,000). That firm counts four contracts that total $ 1,158’343,718.49.

China Gezhouba Group, another company, was contracted for the execution of the Sopladora hydroelectric project ($ 672,192,188.48), the urban infrastructure in the Yachay City of Knowledge ($ 169,670,825.68) and flood control Bulu Bulu ( $ 55,608,587.98), among the largest works. Sum 6 processes adjudicated for $ 937’646.201,10.

Another main contractor is China Camc Engineering. It was favored with 17 contracts for $ 745,134,586.96. The government commissioned the lifting of five hospitals ($ 346,373,739.48), the government financial management platform ($ 197,975,643.58), buildings of the ECU-911 ($ 61,007,678.81) and the universities Ikiam ($ 19,154,988.72) and Unae ($ 30,000,000) and the construction of parks ($ 44,997,897.19), which includes that of Samanes in Guayaquil.

The disbursement of state resources for the works exceeds $ 8 billion. Many of the contracts with Chinese firms have ended with costs higher than originally agreed. These are the cases, for example, of extra values reported for the hydroelectric plants Delsitanisagua ($ 120 million), Mazar-Dudas ($ 17,446,583.74), Toachi Pilatón ($ 168,062,674.84) and Sopladora ($ 9,600,000).  The construction of the four plants finally had an increase of $ 315,109,258.58.

A similar situation was presented in the construction of hospitals. There are cost overruns in Monte Sinaí ($ 26,377,154.69), Zofragua de Guayaquil ($ 31,280,000), specialties in Portoviejo ($ 61,000,000), in Esmeraldas Sur ($ 34,000,000) and in repowering of José María Velasco Ibarra, from Tena ($ 10’000,000). All this amounts to $ 162,657,154.69.

Eighteen public agencies hired the total works with Chinese companies.

Outstanding, for processes with larger amounts, the Electricity Corporation of Ecuador (twelve, for $ 4,417’147,011.68), Works Contracting Service (nine, for 612’517,011.82), Ministry of Transport and Public Works (seven, for $ 612,169,538.04) and the National Water Secretariat (six, for 490,228,612.75).

Almost all the hiring of these cases was subject to a special regime (direct invitation), according to the review carried out by this newspaper.

The largest construction company in the country

The public works in Chinese hands exceeds $ 8 billion

Founded in 1950, Sinohydro is considered among the largest construction companies in the world. In Ecuador he has been in charge of important road and infrastructure works. The main one: Coca Codo Sinclair, for whose construction process glosses have been ratified for $ 112 million. Registers two branches in Quito constituted in 2009 and 2012, according to the Superintendence of Companies. The first, Sinohydro Corporation, reports in the SRI zero income tax payment (IR), and $ 53,127,921.62 as exit tax (ISD)

between 2009 and 2018. The second branch , Sinohydro Corporation Limited, since 2012 has declared $ 1’398,846.67 as IR, and $ 1’690,429.19 as ISD.In charge of three strategic worksThe public works in Chinese hands exceeds $ 8 billionHarbin Electric, specialized in the development and construction of electrical infrastructure, is among the three largest manufacturers of power plants in China.

In his country, his headquarters is in Harbin, Heilongjian. It arrived in Ecuador in 2011, the year it was contracted by Celec to build the Esmeraldas II thermal power plant, inaugurated in 2014, and the Minas-San Francisco hydroelectric project, which is scheduled to start operations this year. It is also in charge of laying the 500 kV transmission line that will carry the energy generated by Coca Codo Sinclair.

The company established in Ecuador declared $ 2’170,027.9 in income tax between 2011 and 2017, according to the SRI. Likewise, since its arrival and until 2018 it has paid $ 2’796,200.2 in tax on the exit of currency. Blower is its main contract Public works in Chinese hands exceeds $ 8 billion China Gezhouba Group, a Chinese company, founded in 2006, it has its head office in Wuhan, Hubei.

In 2010, when it established a branch in Ecuador, it partnered with the national construction company Fopeca to formalize with Celec the execution of the Sopladora hydroelectric project. The parties are currently engaged in legal litigation for construction faults found in the work.

The Chinese firm was also awarded contracts for Bulu-Bulu flood control, road rehabilitation and Yachay infrastructure. Until 2017, the company has paid in the country $ 9’808,578.69 in income tax and, so far this year, $ 1’720,907.58 in tax on the exit of foreign currency, according to reports from the SRI. (I)

Source: https://www.expreso.ec/actualidad/obras-contratacion-china-gobiernoecuador-financiamiento-YB2355980