The conflict between Corporación Eléctrica del Ecuador (CELEC EP) and Austral Technical Management (ATM) has escalated to a new level. CELEC is awaiting the final arbitration decision issued by the Quito Chamber of Commerce on the contract for the Esmeraldas III thermoelectric plant, while filing a criminal complaint for alleged organized crime.
Esmeraldas III failures and advance payments
The plant, which was to contribute 91 megawatts to the national system, was awarded for USD 89 million to ATM. However, after eleven months of delay, CELEC has only received failures: 16 motors did not pass the tests, 32 others are incompatible with the Ecuadorian power grid and two are already damaged. Despite this situation, the public company has already disbursed 63% of the contracted amount.
Audit reports indicate that some of the generators have rusted components, obsolete software and lack basic certifications. Even minor explosions have been reported during testing. CELEC has also questioned the lack of documented engineering, incomplete protection systems and several diesel spills. diesel spills not reported in a timely manner.
ATM’s defense and CELEC’s position
ATM points out that it has not abandoned the work and blames the contract administrator for preventing access to key supplies such as fuel and lubricants. For its part, CELEC defends its legal action as part of its responsibility to protect the state’s resources and ensure the reliability of the electricity system.
In view of the technical evidence and the irregularities detected, CELEC has considered moving towards unilateral termination of the contract with Austral. Despite a previous arbitration ruling that favored the contractor, the state agency has reiterated its commitment to exhaust all legal and contractual avenues to avoid further damages.
The non-compliance of this project represents a risk in the capacity to respond to energy crises. The Esmeraldas III power plant was contracted under an emergency regime to reinforce the system, so its prolonged stoppage compromises the coverage and stability of the supply nationwide.
Source: CELEC
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