Chinese Consortium Sole Bidder To Finish EPM’s Hidroituango

Today, Medellin’s city-owned utility conglomerate Empresas Públicas de Medellín has announced that the only bidder to finish installing the last four electrical turbines in the troubled Hidroituango hydroelectric dam is the “Ituango PC-SC Consortium,” consisting of two Chinese firms and one Colombian company:

• Yellow River CO LTD
• Power China International Group Limited Colombia Branch
• Schrader Camargo SAS.

Schrader Camargo already has won the contract to finish turbine units 3 and 4. Medellin Mayor Daniel Quintero (above) demanded that the initial contractor, CCC Ituango, who had been working on the project for a decade, renegotiate the existing contract, which they refused, leading to litigation and public acrimony. Almost two years ago, the president of EPM’s largest labor union, SINPRO, Olga Lucía Arango told Finance Colombia “There has always been a suspicion of a possible hiring of a Chinese company for the completion of the work.”

Now it seems that Arango was correct. The Ituango PC-SC Consortium presented a bid of $991 billion pesos, or just over $200 million USD, even though independent consultants have strongly warned against it. For example, according to a 432 page independent report submitted by engineering consulting firm Pöyry/Afry, further delay in finishing the project, bringing all eight turbines into production, also creates structural risks for the dam because of the stresses of the river flow going over the spillway or through bypass tunnels instead of through the generation turbines.

Engineer Santiago Ortega, director of Innovation at Emergente, agrees with the councilor, who believes that the change of contractors could delay delivery schedules by up to a year. “The project could have a delay of at least one year and, in addition, it reduces the traceability of the project, the responsibility in the design and execution of the works and also ends up increasing the global cost,” Ortega told Colombian outlet BLU Radio.

According to Medellín newspaper El Colombiano, Yellow River asked EPM to reduce the required construction experience from 94,500 cubic meters of tunnels, canals, landfills and bridges down to just 28,250 cubic meters of experience, which EPM agreed to, tailoring the bid to Yellow River’s favor.

EPM has until March 6, 2023 to formally contract with the consortium, postponed from September 6 of this year. The bidding process has been prolonged five times.

Regarding the last four turbines:

• Unit 5 is scheduled to enter operation in December 2026
• Unit 6 is scheduled to enter operation in January 2027
• Unit 7 is scheduled to enter operation in March 2027
• Unit 8 is scheduled to enter operation in April of 2027

Though with the changes under way, there is little certainty to these dates.