The report that was released declared that Schrader Camargo, the Colombian construction company that aimed to aid Yellow River Construction and Power China International Group Limited Colombia Branch in the construction of the remaining energy generation units for the hydroelectric dam, does not meet the required experience necessary to helm the project properly.

“The offer presented by the ITUANGO PC-SC CONSORTIUM is rejected, since the national member Schrader Camargo SAS does not meet the participation requirement established in numeral 2.2.7.-Experience-, of the Particular Conditions. Consequently, the provisions of section 3.1 were followed. of the General Conditions for Contracting Goods and Services, which indicates: ‘Failure to comply with any of the participation requirements of this request for offers or breach of legal requirements will be grounds for rejecting the offer.’”

The sound rejection of Ituango PC-SC Consortium, who was the only group to put in a bid for the project in December 2022, has put the project in even more disarray as EPM attempts to figure out the next move in the process.

EPM said on February 22 that the consortium, which was given extra time to respond to the rejection, has been able to re-submit the proper certificates for Schrader Camargo to allow them to prove that they have the necessary experiences for the project, but the rejection has forced a public re-evaluation of the company’s qualifications.

“The certificates were not clear as the contractor wanted. The certifications in some cases are from several years ago and details were missing,” EPM said.

In the past year, EPM had lowered the standard requirements necessary for the project at the behest of Yellow River, who said that there were not enough local firms with experience on the hydroelectric dams who were also interested in undertaking the Hidroituango project.

“We have found an alternative to partner with a local company that is interested and has extensive experience in this type of work, however, in order to comply with the particular conditions, it is necessary for EPM to proceed to reconsider one of the following proposals to which conditions of experience, which the Colombian participant must provide,” they had said at the time. What was left unsaid is that capable local companies were loath to get involved in the project after Medellin Mayor Daniel Quintero, who thus serves as chairman of the board of city-owned EPM, launched a populist crusade against previous contractor, CCC Ituango, who then refused to continue after its initial contract phase was completed.

EPM proceeded to lower the standard requirements for the project, garnering criticism at the time from the Colombian Chamber of Infrastructure, who accused them of tailoring the requirements to make it easier for the consortium to win the bid.

Despite this, the consortium did not get the bid approved because of inadequate experience from Schrader Camargo, which El Colombiano reported had used office buildings and parking lots as an attempt to prove their experience, only having two dams built in their resume—and only having one properly certified.

The company reportedly submitted its work for the U.S. Embassy in Bogotá, where they claim to be a subcontractor, as well as two industrial complexes in the Cervecería del Valle brewery and Gachancipá, which EPM questioned its relevance to the project at hand.

“Once the information presented by the bidder has been studied, after the request made by EPM, it is concluded that the volume of concrete reported cannot be accepted to prove experience in activity 2,” they said.

And while they did work on two dam projects, El Quimbo and Riofrío II, only the first was certified for the company as the second was handled primarily by another company, Arquitectos e Ingenieros Associates S.A., and they were only there as a subcontractor.

The 7,944 cubic meters of experience that was confirmed falls short of the 28,350 cubic meters minimum that has been required by EPM after the revision.

EPM has been unclear as to what they will do with the situation after the rejection. This puts a wrench in the plans for the Hidroituango, which has multiple generation units set to be constructed and finished within the next few years.

In other news, EPM has reported one death and sixteen injuries in the Hidroituango dam site on Tuesday after one of the buses transporting workers to the site had gotten into an accident. Authorities are still investigating the matter as of press time.

Above photo: Interior tunnel after devastating internal flooding of EPM’s Hidroituango project in 2018 (courtesy EPM)

• 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.