At the Board of Directors meeting held today, Energía Argentina S.A. (ENARSA) agreed to resolve historical disputes with contractors in order to unblock the project and commit to the resumption of works on the hydroelectric dams on the Santa Cruz River.
The understanding that was reached seeks to address a conflict that had been dragging on for years and that had halted the progress of the project. The Jorge Cepernic Dam, the smallest within the complex, is the one with the highest degree of completion and currently reaches 46% progress, so its reactivation is a priority to recover the pace of construction and achieve concrete results.
The dams were tendered in 2013 and were supposed to be ready by 2023. However, the Santa Cruz dams originated from decisions made during previous administrations, and their execution was affected by contractual breaches, lack of price adjustments in response to rising costs, and an accumulation of claims that led to the slowing down and eventual virtual halt of the project. In that context, since 2016 the contract had not been fulfilled, nor had any price redeterminations been made. As a consequence, the contractor accumulated claims of more than USD 700 million, while only approximately USD 1.8 billion was executed between the two dams. In order to complete the two projects, it is estimated that an additional USD 5 billion in investment is still required.
With this decision, ENARSA advances towards the regularization of conditions and the channeling of inherited disputes to ensure that construction resumes with a verifiable schedule, starting with the Jorge Cepernic dam. It is anticipated that the Jorge Cepernic dam could be completed in 2030, contributing 1860 GWH to the Argentine Interconnected System (SADI) and with an installed capacity of 360 MW.
The measure is part of the process of normalizing the sector and the National Government's decision to tidy contracts and resolve pending disputes, so as to respect the commitments assumed by the country.
Source: https://www.argentina.gob.ar/noticias/el-gobierno-nacional-resolvio-controversias-historicas-y-se-reactivan-las-obras-de-las (courtesy translation)
