City denies construction extension to tram contractor, begins imposing fines

The city of Cuenca moved a step closer to terminating its contract with the Spanish company responsible for managing tram construction.

Completed section of tramway on Gran Colombia.

Four Rivers Consortium of Cuenca (CCRC) was notified last week that its request for a 480-day work extension was rejected and that daily fines would be imposed for work delays. The fine is  $7,214 per day, or .01 percent of CCRC’s $72.14 million dollar contract.

“We cannot accept their demands for extension,” said Santiago López, city coordinator for the tram project. “As of the end of 2016 they are in violation of the terms of the contract and will be fined for failure to deliver the work agreed to.”

López says the city is continuing to make new arrangements for project management and has been in touch with officials of the French company, Alstom, that manufactured the tram hardware.

The city expects to face CCRC in court-ordered mediation or at trial. Due to contract language agreed to by previous Mayor Paúl Granda, all legal action regarding the contact must be conducted in Chile.