Pressure mounts on Varela to suspend Odebrecht contracts
THE JAILING of the president Brazilian construction giant Norberto Odebrecht, and the company’s worldwide corruption links has increased pressure on President Juan Carlos Varela, even from within his own party, to suspend contracts his government has awarded to the company.
The uproar comes when Varela is on the eve of visiting Japan to sign an agreement for the construction of Metro Line 3, and the fourth Canal bridge.
The calls for cancelation of contracts totaling over $2 billion have intensified since the president of the company, Marcelo Odebrecht, was sentenced to 19 years and 4 months in prison in Brazil for corruption and money laundering, with a follow up by Brazilian prosecutors asking for the preventive detention of former Brazil president Luiz Inacio Lula de Silva on corruption charges.
Some $47 million of money linked to the Brazil Petrobras scandal is reported to have passed through Panama banks.
Odebrecht has been awarded two major projects by Varela’s government, the Colón urban renewal project and the construction of line 2 of the Metro.
Varela has distanced himself from the scandal, saying it is a Brazilian concern
Pro-government Deputy José Antonio Domínguez said that the sentencing of Odebrecht should mean that the company is not allowed to participate in any public bid in the country.
Maribel Jaén, of the Justice and Peace Commission, warned that deals with the company generate “suspicion.”
Odebrecht and the company Fomento de Construcciones y Contratas are in charge of the construction of line 2 of the Metro, valued at $1.8 billion.
In addition, the Brazilian company is partnering with Panama company CUSA for the Colón project, valued at $537 million.
Domínguez said these contracts set a bad precedent.
“It sends a bad message to the rest of the country,” he said.
Former Panama Stock Exchange Director Roberto Brenes said that previous projects done by the company should be audited to ensure that no economic damage was done to the state.
