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Riteve Sues Country for $3.5 Million in Losses

June 11, 2004

RITEVE SyC, the Spanish-CostaRican firm that holds a monopoly to conductthe mandatory technical inspectionsthat all Costa Rican vehicles must undergoeach year, is suing the Costa Ricangovernment for $3.5 million before anational arbitration panel.The company claims that the government,by not allowing it to adjust its ratesas agreed in the contract, is costing itmuch of its revenues.Since the government has not adjustedthe rates as established in the contract“the company has had to take actions that,in an arbitration suit, consider the possibilityof receiving indemnification fordamages,” Vilma Ibarra, spokeswomanfor the company, told Radio Monumental.The arbitration suit was filed beforethe Counseling and Arbitration Center ofthe Costa Rican Real Estate Chamber.“This situation is painful,” Ibarra said.“The company has waited a long time tomake this decision – one that it didn’twant to take, but that, taking into accountthe arbitrary and not very technical way inwhich Riteve’s rates have been handled, isnecessary to adopt.“Though the laws force the companyto file legal actions against the institutionsof the State, the company will attempt,through every means possible, to hold thepublic employees that have made thewrong, arbitrary and contrary-to-law decisions,respond to the damages they havecaused,” she said.The conflict arose because the companyhas not been allowed to adjust its ratesto compensate for inflation as stipulatedin the contract. The rates for regular vehicles,currently ¢8,805 ($19.68), this yearshould have been raised to ¢13,000($30.67), according to Riteve.The dispute is the result of problemsfound in a rate increase proposed byRiteve in October 2003. While evaluatingthe request, the Comptroller General’sOffice found flaws in the formula that setsthe rates and annulled the request, accordingto the daily La República.An audit was conducted to define anew formula for defining the rates. Afterthe audit, it was concluded that no rateincreases should take place during theremainder of this year. Since last year,Riteve has been requesting an increase of26.56%.In related news, the Public Works andTransport Ministry’s (MOPT) originalcopy of the contract that awards Ritevethe monopoly on technical inspections isstill missing.President Abel Pacheco and PublicWorks and Transport Minister JavierChaves confirmed the mysterious disappearancelast month. However, thePresident minimized the loss, saying theComptroller General’s Office has a copyof the document.

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