Govt to liquidate Ferrovias

Monday, May 5, 2003

Colombia's national government is expected to issue a decree Friday (May 9) ordering the liquidation of state railroad corporation Ferrovias, a company official confirmed to BNamericas.

Lawsuits stemming from disputes under the previous presidential administration have plagued current President Alvaro Uribe's government, motivating him to re-think the transport sector, the official explained when asked to explain reasons behind the change.

In one example, Ferrovias paid railroad consortium Andrade Gutierrez-Equipo Universal-Ingenieria Ferreira 39.1bn pesos (US$14.1mn) in early-April in court-mandated fines. The consortium, charged with repairing tracks between Bogota and Santa Marta, demanded Ferrovias compensate losses it allegedly incurred when approval of an environmental license stalled for one year.

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Uribe will unveil details about the liquidation Friday when he publishes the decree, the official said, speculating another government organization will emerge in part to manage concessions under Ferrovias' mandate.

Ferrovias, established in 1989 after the government liquidated national railroad company FNC, largely manages the Atlantic and Pacific railroad concessions. Under consortium Fenoco's control, the US$300mn Atlantic project entails repairing and managing 1,500km of railroad for about 30 years. The US$120mn Pacific project, contracted to concessionaire Tren de Occidente, involves fixing and operating 500km of track for 30 years.