Narrative
Full Description
Project narrative
In October 2015, China Road and Bridge Corporation (CRBC) and the Municipality of Quito's Empresa Pública Metropolitana de Movilidad y Obras Públicas (EPMMOP) undertook a technical feasibility study for the Guayasamín Road Solution Project. Then, on December 17, 2015, China Eximbank issued a letter of intent to finance the Guayasamín Road Solution Project. Several months later, on March 28, 2016, CRBC and EPMMOP signed a concession agreement ('strategic alliance contract') for the Guayasamín Road Solution Project. On October 18, 2023, China Eximbank and the Municipality of Quito signed a $92,554,946 loan agreement for the Guayasamin Road Solution Project. The estimated borrowing terms of the loan include a 15 year maturity, a 3 year grace period, a 7% interest rate, and a 1% management fee. The borrower was expected to repay the loan with toll revenue. The proceeds of the loan were to be used by the borrower to partially finance a $116,989,409.53 commercial contract between EPMMOP and CRBC, which was signed on April 4, 2016 and amended in April 2022. The purpose of the project is to connect Quito with the eastern parishes of Tumbaco and Cumbaya. The project, which is being implemented as a public-private partnership (PPP) with a 30-year concession period and a 28-month construction period, has four components and is located in the north-central part of Quito: (1) the extension of Boussingault street; (2) the construction of the 480-meter-long Guayasamín bridge; (3) the expansion of an existing road and new toll station; and (4) the construction of an access bridge at Plaza Argentina. CRBC is the EPC contractor responsible for project implementation. On August 25, 2021, Quito’s Mayor Jorge Yunda signed an addendum to the commercial contract that would allow CRBC to begin construction. However, the contract did not enter into force because the Attorney General's Office and did not approve the contract. The project’s groundbreaking ceremony took place on July 29, 2022. However, this project has encountered several obstacles and problems during implementation. In 2019, EPMMOP unilaterally terminated the April 2016 commercial contract with CRBC for five reasons: (1) not presenting definitive designs, (2) not executing the project engineering or the provision of goods and services, (3) not justifying $10.5 million used of funds or a $3.5 million advance payment. As of 2023, CRBC and EPMMOP were still in international arbitration for alleged breaches of the April 2016 commercial contract.
Staff comments
1. This project is also known as the Construction of Access to Quito from the Oriental Valleys and Construction of Guayasamin Bridge Project and the Quito International Airport Passage to the City Project. The Spanish project title is Acceso a Quito Desde Los Valles Orientales Y Construccion del Puente Guayasamín or La Solución Vial Guayasamín. 2. The Chinese project title is 厄瓜多尔基多市中部进城通道项目. 3. The April 4, 2016 commercial contract can be accessed in its entirety via https://www.epmmop.gob.ec/epmmop/images/stories/lotaip/2011/dmdocuments/contrato_crbc.pdf. 4. Some sources indicated that the project scope also includes the construction of an entrance road to Quito from the Eastern Valleys. 5. Some sources suggest that the face value of the loan may have increased when the total cost of the commercial contract between EPMMOP and CRBC increased from $116,989,409.53 in April 2016 to $138 million in April 2022. This issue warrants further investigation.