Costa Rica agrees compensation for canceled highway concession

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Costa Rica agrees compensation for canceled highway concession

The Government of Costa Rica has paid off a US$28.5 million compensation to Brazilian construction company OAS for canceling the PPP contract to expand the San Jose-San Ramon Highway.

The ministry of public works and transport (MOPT) announced that Costa Rica was able to pay US$17 million less than the firm originally requested. The amount is also less than the settlement originally agreed in December last year.

President Laura Chinchilla canceled the 30-year road PPP contract in April 2013 following public opposition derived from a conflict of interest in the award of the contract and complaints over high tolls.

Chinchilla said at that time:

"I recognize that it is neither possible nor appropriate to push the project forward in the face of opposition from diverse sectors of the population."

Under the terms of the agreement for the cancelation of the contract, OAS will provide the government with all the plans, studies and technical documents carried out for construction of the project.

The US$524 million project involved a 30 years concession contract to rehabilitate, expand and operate the toll road a 57.9km toll road. 

The road construction was awarded in 2004 for $295 million to another company, but works never began because of various bureaucratic and legal problems. This project has been one of the most controversial issues in the three years since the Government of President Laura Chinchilla.

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