• Costa Rica Real Estate

Business sector alarmed by approval of China’s $465 million loan to expand the highway to Limón

February 24, 2014

Representatives of several professional associations and private sector chambers expressed doubts about the plan to expand Route 32, the highway from San José to the Caribbean coast. The project is being financed with a loan by the Chinese government.  

Among a list of complaints, the Consensus Group for the Rescue of the National Road Network found it unacceptable that the Legislative Assembly’s Finance Committee decided that a $465 million loan was adequate from the Chinese company granted the project. The committee authorized the transaction with the China Harbour Engineering Company (CHEC) last week.

“This project is highly necessary but we should not move forward without getting a fair price, as well as clear and well-defined terms for the total cost that this will represent for the country,” the group said in a statement Monday.

They also questioned the Finance Committee’s decision to approve the push the bill forward without preliminary blueprints, without an estimate of materials needed, without any price and cost studies and without knowing the exact number of private lands that will be expropriated for the highway’s expansion.

Another concern pertains to the government’s apparent lack of interest in renegotiating the contract’s conditions. The loan includes a number of rigid clauses if Costa Rica fails to comply with any of the agreed conditions. The country could receive substantial fines, up to the total loan amount plus interest, if it violates certain conditions.

Last Thursday nine out of 10 committee lawmakers approved the bill under contentious circumstances. In the end, only Citizen Action Party (PAC) legislator Jeannette Ruiz voted against the measure.

In order to become a law, the bill now must be voted on twice by the full Legislative Assembly and signed into law by the president.

The Consensus Group is made up of members of the National Structural Materials and Models Laboratory (Lanamme) at the University of Costa Rica, the Federated Association of Engineers and Architects, the Costa Rican Union of Private Business Sector Chambers and Associations, the Costa Rican Construction Chamber, the Chamber of Consulting Architects and Engineers and Costa Rica’s Association of Highways and Roads.

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