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Alterra Seeks Arbitration in Airport Dispute

June 25, 2004

ALTERRA Partners, the consortiumthat holds a 20-year contract to renovateand operate Juan Santamaría InternationalAirport, on Monday announced it plans toseek arbitration to solve the ongoing conflictwith the government, which has paralyzedwork on the country’s main airport.The airport operator stressed theimportance of resuming work on JuanSantamaría, which has been stalled sinceMarch 2003. Alterra warned in a statementthat the airport could become saturatedduring the next tourism high seasonbecause its incomplete infrastructure maynot be able to handle recent increases in thenumber of airlines and airplane routes flyingto and from the airport.“It’s urgent to continue works toexpand the airport,” said Mónica Nágel,executive director of Alterra Partners. “Justas an example, of the nine passengerboarding gates that should be completedby this date, only five are done.”IN the statement, Alterra said it decidedto seek arbitration as a result of the government’sand the Comptroller General’sOffice’s apparent unwillingness to meetwith it to look for a solution to the disputethat is compatible both with the originalcontract and other agreements both partieshave signed.“I would have preferred that these differencesbe resolved in the ComptrollerGeneral’s Office and we still hope that willhappen, but given the time that has passedwe prefer to start requesting the arbitration,”Nágel said. “…It’s a step in the roadto finding solutions to this project, which iskey to the country’s development.”Nágel says Alterra is confident a solutioncan be found to solve the dispute andallow it to resume work on the airport.If the government accepts arbitration,the arbitration panel’s decision would bebinding for both parts. Each side wouldchoose a person to argue its case. Alterrathis week told the daily La República itwould hire Eduardo Sancho, a former magistrateof the Constitutional Chamber ofthe Supreme Court (Sala IV), as its representative.Once both sides have namedtheir representatives, they must agree on athird person that would preside over thearbitration.The daily La República said that if theparties were to go before the Costa RicanChamber of Commerce for conflict resolution,Alterra would have 15 days to explainits position, and then the governmentwould have 15 days to respond. Next, anaudience would be held to clear up anyremaining doubts.The person presiding over the panelwould later issue a ruling, which could beappealed before the First Chamber of theSupreme Court. The process generallytakes seven months, according to LaRepública.IN March of last year, the 14 foreignbanks that had provided financing for theairport said they will not provide Alterrawith more funding unless the governmentagreed to allow the airport manager to collect$18.6 million from airport user fees fordevelopment and financing expenses (TT,May 7).In an August 2001 memorandum, theMinistry of Public Works and Transport(MOPT), Alterra, and the banks agreed toset the development expenses at $18.6 million.However, the Comptroller General’sOffice, which has the final say in interpretinggovernment contracts, does notrecognize the memorandum and has onmultiple occasions said developmentexpenses cannot exceed the $3.4 millionagreed to in the original contract.Earlier this month, Alterra presentedthe government and the Comptroller’sOffice with a proposal that offered threealternate ways of generating the $18.6million. However, government officialsexpressed doubts about the feasibility ofthe proposals (TT, June 11).In April, Juan Santamaría InternationalAirport was named the third best airport inthe world in the under 5 million passengersa year category and fourth overall inthe Americas (including North America)by the International Air TransportAssociation (IATA).

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