Company in eye of corruption scandal gets $3.7 million more

KEY PLAYERS, including  the top executives of the company involved in  a bribery scandal linked to a failed project  are behind bars or under house arrest , but the government has endorsed an addendum of  $3.7 million to the original contract, raising a storm of criticism.

President Juan Carlos Varela and his ministers  have endorsed an addendum  to the contract with the Ecuadorian company Hidalgo & Hidalgo, (H&H) under investigation by  anti-corruption prosecutors for bribes paid related to  the failed irrigation project  in the province of Los Santos. The addendum is the fifth to be approved for the project design and construction of collector and interceptor system east of the capital already four years behind schedule.

It was approved by Cabinet on August 11 and released in the Official Gazette a week later.

The original contract was signed by the Ministry of Health (MoH) and endorsed by the Comptroller on September 28, 2009, in the then brand new government of Ricardo Martinelli (2009-2014for $27.9 million. With the latest addendum, the cost rises to $48.9 million reports La Prensa

The contractor was also given more time to complete the work and it must now be completed on  April 13, 2016. In the original health  contract 2011 was set as the completion date.

The work of the collector and interceptor system were suspended for a year and a half, ” as  different events occurred in the contract said the resolution adopted by the Cabinet.

The same document stresses that the government plan 2014-2019 for  the implementation of the Basic Health Program 100% water 0 sewage which will interconnect the Sanitation Project in Panama City and the  Bay of Panama.

Tatiana De Janon, general coordinator of the Sanitation said H&H was hired in 2009, with the objective of designing and building the necessary steps to collect and transport wastewater in  Panama City, to the wastewater treatment plant in Juan Diaz, which  would be interconnected to the drainage system of the Tocumen, Bethania, Don Bosco, Las Acacias,CuidadRadial and Juan Diaz, among others, immediately benefiting approximately 22,069 home housing  with 89,422 people.

She said  that during the course of the work several events caused “changes in the scope of the project” resulting  in delays.  

According to De Janon, the project is  over 95%, complete final works to operationalize the system, such as installing equipment in theTocumen  pumping station Tocumen and initiating  the  system operation.

Regarding  giving more money to the company under investigation, he said that “They are not hiring new work with this contractor,” but formalizing an addendum to  complete the necessary work and  start the r system.

“The current contract has a performance guarantee for the entire project.”  He said that there are communities being affected by not having a their sewerage and sanitation system connected, and   that   ” puts  people’s health at risk.”

President, Juan Carlos Varela, said  on Wednesday, August 19 that the judicial process against Hidalgo & Hidalgo should be separated from the sanitation project.

Despite Varela’s statements civil society representatives have   questioned the continued giving of  millions of dollars to a company that is linked to a corruption scandal.

Ramon Ricardo Arias, president of the Panamanian chapter of Transparency International, said that the government, instead of giving more money to Hidalgo &   Hidalgo, should “declare the nullity of these contracts.”

“It is questionable whether the current administration should continue awarding contracts involved in corruption investigations related companies,” he said.

This is not the first time that the current administration continues to work with companies investigated for irregularities.

Previously, it awarded to the construction company Norberto Odebrecht contract Renewal of Colon for more than $ 500 million.

This, despite the fact that the president of the construction company, Marcelo Odebrecht, was arrested for allegedly leading a scheme of illegal payments and bribes to obtain multimillion-dollar businesses in Brazil and other countries.

In the H&H case people in custody include Alban Marcos Crespo and Juan Antonio Hurtado, company executives; former ministers for Agricultural Development Emilio Kieswetter Oscar Osorio, and former candidate for deputy of Democratic Change Porfirio Ellis

The former vice president Felipe Pipo  Virzi is under house arrest.