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Published in general news Written by July 10 2020 0

Medellin-based multinational utilities giant EPM announced July 10 that it supports Medellin Mayor Daniel Quintero’s new decision to postpone debate on a proposal that would vastly expand EPM’s areas of business.

The proposal (see Medellin Herald July 3, 2020) would have EPM launch into whole new areas nationally and internationally, including highway and mass-transit infrastructure projects, manufacture and supply of renewable-energy systems and services, and a vast array of commercial services for consumers and businesses.

However, Medellin Mayor Daniel Quintero announced late last night (July 9) via his Twitter account that “social sectors and some businesses have asked us to withdraw the [proposed] project so that it can be discussed inside and outside the [City] Council in working groups. I always like to buy time and move fast but in this they are right. The project will be presented in October. In the meantime, we will create working groups with unions, citizens and social leaders to build together the future of our EPM."

Then today (July 10), EPM announced via its official Twitter account that “we want to lead technological innovation processes, taking care of the environment, guaranteeing well-being and quality in services. That is why we support the decision of our Mayor Quintero and we continue with the purpose of working on this initiative.”

Prior to the new EPM and Mayoral decisions to postpone debate on the proposal, Medellin City Council President Luis Bernardo Vélez announced July 8 that “changing the corporate purpose of [EPM] requires in-depth study, and that task must be addressed before making any decision that affects the interests of citizens.”

In the proposal, EPM and the Mayor prudently warn that while public utilities need to expand and evolve in order to survive in an ever-more-competitive business world, EPM must be careful to avoid undercutting its exceptionally good bond ratings with both Colombian and foreign investors. The issue: Big expansions into new business areas potentially could violate existing bond covenants -- possibly triggering massive, expensive prepayments -- and potentially could harm loan terms and interest-rates on any future bond floats, the proposal adds.

Meanwhile, on the bond front, EPM general manager Álvaro Rendón López on July 8 hailed a just-completed peso/dollar bond-float totaling US$751 million.

The float included COP$635 billion in peso-denominated debt (equivalent to US$176 million) plus another US$575 million in dollar-denominated debt, with investors in the United States, Canada, Europe, Asia, Chile, Peru and Colombia eagerly gobbling-up the offer -- actually demanding 3.4 times the total amount offered by EPM, Rendón noted.

“With this operation, EPM becomes the largest issuer of bonds denominated in Colombian pesos in this [international] market, this being its fifth operation which includes this [combined peso-and-dollar] financing method,” according to EPM.

“The placement results are a reflection of the credibility of local and international investors in EPM’s financial strength, even amid the current circumstances of uncertainty in the economy worldwide due to the effects caused by the Coronavirus pandemic,” Rendón said.

“The international bond issue received an investment grade rating, equal to that of EPM, by the firms Fitch Ratings and Moody’s,” EPM added. “For Fitch Ratings, EPM’s ratings are the result of the company's low commercial risk, thanks to its diversification and characteristics as a provider of public services.

“For its part, Moody’s affirms that ‘EPM's ratings reflect its consolidated and diversified income base by sector, with the electricity distribution business having the largest contribution to EBITDA.’”

Published in general news Written by July 08 2020 0

Medellin-based electric power giant EPM revealed July 8 that it has now spent 95% of its COP$1.2 trillion (US$330 million) budget for social and environmental projects in 13 municipalities around its 2.4-gigawatt “Hidroituango” hydroelectric project in Antioquia.

The massive spending is benefitting both people and the environment in-and-around the towns of Briceño, Ituango, San Andrés de Cuerquia, Toledo, Valdivia, Yarumal, Buriticá, Liborina, Olaya, Peque, Sabanalarga and Santa Fe de Antioquia, according to the company.

Among the latest beneficiaries are several more families getting brand-new apartments in the municipality of Ituango, where EPM also built an adjacent sports hall for recreation.

“In the seven years of execution of the social investment plan, numerous actions have been carried out to contribute to the improvement of [highway and bridge] connectivity, infrastructure in education and housing, health conditions and food security of the communities,” according to the company.

“To facilitate the connectivity of the region’s inhabitants, the Hidroituango project has contributed to the recovery of 1,218 kilometers of secondary and tertiary roads [as well as] bridleways [for horse- and foot-traffic],” according to EPM.

As for nutritional food security, EPM identified 3,785 families for “training, technical assistance, tools, supplies, and fertilizers to create and maintain their own crops. In total 3,065 hectares were intervened in 378 outlying neighborhoods to make these productive projects a reality,” according to the company.

“In addition, 2,300 families benefited from the ‘Maná Project’ via the creation of vegetable gardens and the establishment of productive ventures,” according to EPM.

In housing, EPM has delivered to date new residential units for 52 families and "contributed to improving the conditions of 659 other homes," according to the company.

As for education, EPM “contributed to the improvement of 71 educational establishments, which consisted of adapting classrooms, libraries, dining rooms, recreational spaces, among others, and built seven new training centers,” according to the company.

As for health, EPM “invested resources in facilitating access to formal health care networks, with improvements and equipment provided to a health center, provision of two ambulances and health care services for 12,463 people. The ‘healthy schools’ program also was implemented in 10 educational institutions,” according to the company.

As for public utilities, 5,489 more families were connected to natural-gas service, while eight aqueduct and sewer master plans were developed.

As for reforestation, EPM is restoring 24,530 hectares of vegetation in the Cauca River canyon to compensate for inundated lands behind the dam.

“The actions carried out include planting 70 native species typical of the dry tropical, humid tropical and premontane forests,” according to the company.

“In the 12 years that the project has been under development, EPM has acquired 24,530 hectares, mainly in areas surrounding the reservoir and areas degraded by the gradual actions of different economic activities in the municipalities of Buriticá, Liborina, Sabanalarga, Peque, Ituango, Toledo and Briceño,” according to EPM.

The land acquisitions “offset the impacts caused during the construction of the dam reservoir, main works, access roads and future operation of the hydroelectric project,” according to the company.

The 20-year reforestation and conservation plan includes “4,137 hectares of tropical rain forest, 13,860 hectares of tropical dry forest and 6,532 hectares of damp, premontane forest,” according to EPM.

“Ecological restoration actions not only include the planting of native species, but also involve the analysis of coverage, connectivity, landscape, flora and fauna [in order to] set feasible restoration goals to achieve recovery of soils, water resources and biodiversity.

“In the project’s area of influence, studies and monitoring carried out by biologists, agronomists, zoologists and experts in other disciplines have so far registered nearly 16 species of amphibians, 36 reptile species, 300 bird species and about 36 mammal species,” the company added.

Published in general news Written by July 03 2020 0

Medellin Mayor Daniel Quintero announced July 2 that the city has just added 1,000 more epidemiological trackers to help the city stem the rise in Covid-19 cases.

Simultaneously, Medellin debuted an on-line database and mapping program (see: https://www.medellin.gov.co/irj/portal/medellin?NavigationTarget=navurl://48b007fc8d7912ef960824275ea1cb7a ) so that citizens can see exactly where Covid-19 cases are appearing daily, along with total numbers of active cases, recoveries, hospitalizations, intensive care unit (ICU) capacity and continuing progress in adding more hospitalization capacity.

“We are doubling the number of people in the ICU every twelve days,” Mayor Quintero warned. “The graph [showing the rise in cases] will continue to rise because we are seeing the strongest outbreaks and our responsibility is to make [control] decisions and do them on time,” he added.

Currently the city has 507 ICUs available -- and on July 2, the national government donated another 50 Covid-19 ventilators to the hospital network here. In addition, the Avenida 80 clinic -- dedicated specifically to future Covid-19 patient care -- is now ready to start operating “when required,” he said.

Mayor Quintero also announced that he expects Colombia’s medical-device regulatory agency Invima to endorse clinical tests of the relatively low-cost Covid-19 ventilators developed in the “InnspiraMED” initiative by the University of Antioquia, the School of Engineering of Antioquia (EIA University) and Sampedro Medical Industries.

On a related front, Medellin will crack-down on irresponsible drinking-and-socializing behaviors that usually peak during weekends and holidays, he said.

The crackdown – which will continue until the Covid-19 epidemic eventually declines – includes a ban weekend/holiday sales of liquor, as well as police break-ups of group parties that usually ignore social distancing and face-mask mandates.

These measures are “motivated by more than 1,800 interventions to parties that the police carried out during the last [Father’s-Day weekend] holiday by order of the municipal administration, and taking into account that currently Medellín has 1,276 active [Covid-19] cases, with 890 recoveries, 102 hospitalized patients and 15 fatalities,” according to the Mayor’s Office.

Meanwhile, ICU occupancy at city hospitals has reached 19.7% precisely because of rising Covid-19 cases – about half of which includes patients from other departments outside Antioquia.

“Medellín has become a world example thanks to the use of cutting-edge [Covid-19 tracking and control] technology, the discipline of citizens and ability to anticipate the decisions of other authorities,” according to the Mayor’s Office.

“So far, we have gained time and made progress in economic recovery, while increasing hospital capacity, enabling the 'Avenida 80' clinic, continuing the development of [locally made, relatively low-cost] ventilators, and equipping the city with more tests.”

Nevertheless, “we cannot claim victory,” Mayor Quintero added. “We took the virus very seriously at first when others believed it was a simple flu, and now that a more difficult stage is coming, we will not let our guard down,” he said.

Unless citizens and businesses strictly follow biosafety protocols, then “this could lead to crises like those of other cities in the country. It cannot be overlooked that Colombia has already exceeded 100,000 cases of coronavirus,” Quintero said.

“Thanks to the follow-up that we do for each of the cases, we have detected that most of the people who are in an ICU today did not take care of themselves, did not recognize the symptoms, never called the ‘123’ [emergency hot-line] and allowed the disease to worsen,” he added.

From now on, all citizens should contact the “123” hotline even if they have only mild symptoms, or if they have contacted their “EPS” health-care/insurance network to report any symptoms, Quintero added.

Published in general news Written by June 30 2020 0

Medellin-based multinational utilities giant EPM revealed in a June 29 filing with Colombia’s Superfinanciera oversight agency that it has pledged to give 55% of all its profits in 2020 through 2023 to the city of Medellin – its sole shareholder.

According to the filing, 25% of profits will go directly to the city while another 30% of “ordinary surpluses” also will go to Medellin, hence a total of 55% of profits.

The pledge is contained in “Municipal Agreement No. 02 of 2020 - Development Plan of Medellin, Medellin Futuro,” according to EPM.

“This 55% percentage has been stable since 2012 in the EPM surplus distribution structure to the municipality of Medellín,” the company added.

Published in general news Written by June 25 2020 0

Medellin and certain other parts of Colombia are now recognized nationally and internationally for outstanding efforts to minimize Covid-19 outbreaks while carefully reopening commercial and industrial sectors -- saving millions of jobs and avoiding economic disaster.

However, a relatively few irresponsible people are threatening to wreck the great sacrifices and personal discipline performed by the vast majority, as Colombia Health Minister Fernando Ruiz announced June 24 in a nationally televised address accompanied by Colombia President Ivan Duque.

Minister Ruiz and President Duque cited irresponsible social behavior in certain areas of some cities during the recent tax-free sales day (June 19) as well as the just-ended Father’s-Day three-day weekend, where police broke-up more than 3,000 illegal crowds and reckless parties -- 200 of which were in mainly low-income neighborhoods in Medellin.

“This leads us to the conclusion that we really have to put a brake on these cases and that we must work harder on self-care,” Ruiz said.

In the past two months, cases of irresponsible behavior including mass gatherings, drinking-and-dancing parties, lack of social distancing and failure to use face masks caused serious outbreaks of Covid-19 and scores of deaths, especially in the Caribbean coastal cities of Cartagena and Barranquilla, Ruiz noted.

But follow-up crackdowns by the Health Ministry in coordination with local mayors and police have since helped to quell these outbreaks and dampen the rise of fatalities in certain cities, he noted.

“Through targeted actions, intervention in [Covid-outbreak] neighborhoods, agreements between the EPS [health-care networks] to carry out massive testing, isolation and increasing our attention span has generated [better] results,” according to the Ministry.

“We do not claim victory, but [outbreak] cases have been reduced significantly,” according to Ruiz. “Already in Cartagena [Atlantico department] and Leticia [Amazonas department] we have seen 33% of those infected already recovered.”

Barranquilla likewise “has to do the same: [epidemiological] fences in neighborhoods and actions that invite social discipline,” he added.

As for the massive increase in shopping during the special June 19 tax-free shopping day in Colombia, most commercial establishments and most shoppers complied with Covid-19 biosafety protocols, he noted.

However, certain shopping areas in some cities – especially those offering huge discounts on home appliances, computers, televisions and cell-phones – saw overflow crowds, which sometimes defeated social-distancing, he said.

So, for the next two tax-free shopping days scheduled in July, “electronic [internet] purchasing and other mechanisms will have to be increased to be able to contain” overcrowding, he warned.

“It is very difficult to keep the population in isolation on a mandatory basis, so we have to generate more capacity for self-care -- and that only develops by opening the economy gradually and that the population demonstrate their capacity [for biosafety compliance] and learning, “ Ruiz concluded.

Medellin Mayor’s Office Praises General Compliance

Meanwhile, according to the Medellin Mayor’s Office, “almost all of the commercial establishments reported a positive [tax-free-sales] day thanks to compliance with all biosafety regulations.

“Despite this, a chain store located in the city center had to be closed preventively due to non-compliance with its protocols. The municipal administration accomplained health authorities to control this situation and protect the integrity of citizens.”

Medellin Secretary of Economic Development Alejandro Arias García added that “merchants tell us that they have increased their sales five times compared to what they had been reporting in recent weeks. This is very positive because it reaffirms that citizens believed in this event, are privileging online shopping and, in most cases, having exemplary behavior at points of sale.”

According to commercial trade association Fenalco Antioquia and Colombia’s Ministry of Commerce, local retailers saw a 30% increase in sales even compared to a typical day before the Covid-19 pandemic started four months ago.

Meanwhile, since Covid-19 tracking started four months ago, Colombia’s Health Ministry has now recorded a cumulative total of 77,113 cases nationally, with 2,491 deaths and 31,671 recoveries (as of June 24).

Bogota is worst at 23,367 cases, followed by Atlantico (17,972); Cali/Valle del Cauca (8,342); Bolivar (7,473); Antioquia (3,239); Nariño (2,814); Amazonas (2,220); Cundinamarca (2,182); Magdalena (1,390); Meta (1,159); and Choco (1,148).

Of the Antioquia cases, Medellín to date accounts for about one-third of the departmental total: 1,321 cases, of which 665 are still active, 649 recovered and seven deaths.

Antioquia Government Urges Self-Quarantines

Meanwhile, the departmental government of Antioquia announced June 24 that any shoppers who ignored social distancing at certain locations during the tax-free shopping day (June 19) now ought to remain at home for the next 14 days.

“The incubation time for the virus that produces Covid-19 can be from two to 14 days,” the Antioquia departmental bulletin noted.

“This is the time between the day of infection and the day of symptom onset. People can transmit the virus starting two days before presenting symptoms. Therefore, if you were infected on Friday, June 19, it is possible that you will start transmitting the infection to others from today and in the following days, even if you do not have symptoms yet.

“Based on these scientific data, we want to invite all people who attended shopping last Friday (June 19) and who were anywhere when infection-prevention measures were neglected to follow the following recommendations:

“1. Stay home in the next 14 days. Avoid going to appointments or to the market. If you have scheduled surgeries, then postpone them. Use electronic means to do meetings and errands.

“2. Wear a surgical mask and do not remove it while you are away from home, and even more so if you have people within two meters.

“3. Wash your hands frequently with soap and water or glycerinated alcohol.

“4. Immediately notify your Covid-19 hotline if you develop a fever, cough, shortness of breath, general muscle pain, headache, sore or sore throat, loss of smell or taste.

“5. If you live with people over the age of 70 or who suffer from hypertension, diabetes, kidney disease, liver disease, chronic lung disease, cancer or immunosuppression, avoid approaching them within two meters in the following 14 days. If these people are scheduled for surgery, then they are also recommended to postpone their surgeries.”

Published in general news Written by June 13 2020 0

Wall Street bond rater Fitch Ratings announced June 12 that it affirmed the city of Medellin’s long-and short-term debt at relatively favorable “AAA (col)” and “F1 + (col)” ratings.

“The outlook for the long-term rating is ‘stable,’” according to Fitch. “The affirmation of the ratings took into account the situation of economic stress as a consequence of the contingency derived from the Coronavirus,” according to the analyst.

“Furthermore, it reflects Fitch's expectation that Medellín will preserve stable budget performance and adequate debt with an expected repayment ratio that will be in a range greater than five times (5x) and debt service coverage that will be in a range 1x to 1.2x in the medium- term, in line with the results of the previous review.

“Although the most recent financial information available from Medellín may not yet reflect any financial deterioration, variations in the behavior of income and spending could materialize in the following weeks or months as the impact of the Coronavirus and less dynamism on economic activity is perceived,” the analyst cautioned.

Unlike some Colombian cities, “Medellin’s operating income structure has a relatively low dependence on national transfers,” according to Fitch.

“Medellín’s tax revenue represented on average 45.9% of operating revenue in the last five years (2015 to 2019) and showed an average annual growth rate of 6.2%. Medellín presents in its structure of this type of income a participation of 40.8% of the unified property tax (IPU) and 35.2% of the industry and commerce tax (ICA).

“Both have shown low volatility in recent years, thanks to the municipality’s fiscal management model and a positive taxpayer payment culture. However, these rents are expected to drop considerably as a result of quarantine restrictions in the municipality due to the coronavirus pandemic.

“Total ownership of Empresas Públicas de Medellín (EPM) has been a key factor in the municipality’s financial performance and an outstanding source of resources, since a significant amount of ordinary and special financial surplus transferred to Medellín [from EPM] has increased its financial flexibility to make capital expenditures.

“This also places Medellin in an incomparable position with respect to other cities in the face of the current health crisis. The financial surpluses [EPM] delivered to Medellín in 2019 reached COP$1.3 trillion [US$344 million] or 55% of the company’s 2018 profits.

“Medellín has financial autonomy and the power to adjust the rates for most of its taxes within the limits defined by the national government. Therefore, in the event of a further need to increase its own income, it is expected that Medellin could cover [via a special tax hike] at least 50% of a reasonably expected decrease in income [from Coronavirus economic downturns].

“In addition, the rates of the IPU [property tax] in the municipality are below the legal limit and the municipal taxpayers have a relatively high affordability to address possible rate increases," Fitch's report notes.

Meanwhile, during the last five years, "Medellín's tax collections have a positive trend due to good management of the fiscal model, a culture of payment by taxpayers and the economic performance of the region," according to the analysis.

“Despite the extraordinary expenses that will be incurred to contain the health contingency, Fitch forecasts that operating expenses will remain under control for the rest of the current administration and estimates an average annual growth of 5.7% for the period 2020 to 2024. To meet the contingency, Medellín has released budget resources for COP$236 billion [US$62 million], equivalent to 4.2% of total revenues generated in 2019.

“At the end of 2019, the balance of Medellín’s debt was COP$1.9 trillion [US$503 million]. About 34.6% of Medellín’s direct debt was denominated in foreign currency -- contracted with the French Development Agency for the Medellín 'green-corridor' program -- and about 65.3% was linked to a variable interest rate.

“The municipality has a current issue of internal public-debt bonds that represent 13.2% of its direct debt and correspond to a sixth bond issue for COP$248 billion [US$66 million], whose maturities are in tranches for 2024 and 2044.

“Fitch considers that Medellín has better liquidity management, which is reflected in a stronger liquidity position and greater access to short or long-term loans with local banks, whose counterparty is rated ‘BBB-’. In addition, Medellin can access Treasury credits for up-to-one-twelfth of its current income, which must be paid at the end of the term," the analysis adds.

What's more, “Fitch includes in its analysis the way in which Medellín recognizes the obligation with the national government to finance the original infrastructure of the Medellín Metro and considers it as an inter-governmental obligation. Thus, Fitch performs a complementary calculation, called the improved repayment ratio, which excludes this obligation from the debt sustainability metrics to estimate a potential improvement over the individual credit profile (ICP).

"Currently, the Medellín ICP is strong enough to support current ratings, so this improvement is not applied,” the analysis concludes.

Published in general news Written by June 09 2020 0

Medellin-based electric power giant EPM announced June 8 that more than 1,000 construction workers at its US$5 billion, 2.4-gigawatt “Hidroituango” hydroelectric project in Antioquia will undergo staggered, voluntary isolation in June and July to avoid possible Covid-19 outbreaks.

To date, EPM reports that it has detected 283 cases of Covid-19 infections among Hidroituango workers, with 21 already recovered. The other 262 workers “have mild symptoms or are asymptomatic. Two of them have been provided hospital care for reasons not associated with Covid-19 and their health condition is stable,” according to EPM.

Beyond those 283 already-isolated workers, another 350 workers are “voluntarily preparing to spend the next few days in individual and voluntary isolation, in order to prevent the spread of the Coronavirus in their family group or in the communities to which they will return,” according to EPM.

“This process is carried out both in the Villa Luz camp of the CCCI [construction] consortium, and in the Tacuí-Cuni camp of EPM, following the advice of the Epidemiological Surveillance System and the Faculty of Medicine of the University of Antioquia and in coordination with the Secretariat of Health of Antioquia,” according to the company.

These volunteers will spend at least seven days in preventive isolation, “after which time the Coronavirus test (Covid-19) will be applied. If the result is negative, then they will receive a certificate that they are not carriers of the virus, and they will be able to return to their communities,” according to EPM.

However, any workers found positive for Covid-19 will be transferred to Medellín for medically supervised recovery, the company added.

 

Published in general news Written by June 08 2020 0

Deposed Antioquia Governor Aníbal Gaviria announced in a June 8 press conference that Colombia Attorney General Francisco Barbosa Delgado committed a grievous legal error in charging Gaviria with corruption over a 2005 highway contract -- and likewise went way overboard in removing him from office and putting him under house arrest.

Gaviria also revealed that he will appeal the detention order to Colombia’s Supreme Court.

Rather than pointing fingers at anyone over some supposed “smokescreen” or “political plot” as suggested by some demagogues, conspiracy-mongers and certain left-wing journalists, Gaviria instead said he has no indication whatever of any political plot.

Rather, Colombia Attorney General Barbosa and an assistant prosecutor handling the case simply made wrong legal judgments about the disputed highway contract, he said.

Gaviria also noted that the Attorney General has a questionable track record on numerous preventive detention orders, as lawsuits totaling some COP$2 trillion (US$555 million) have been filed against the Attorney General over allegedly wrongful detentions.

Gaviria also stated that he had received messages from numerous jurists and legal experts around Colombia indicating that the Attorney General simply has misunderstood Colombian law regarding alleged irregularities in the “Troncal de La Paz” highway-and-bridge contract executed 15 years ago in Bajo Cauca, Antioquia.

Notably, Gaviria praised Colombia President Ivan Duque for what he said was the correct naming of Antioquia Government Secretary Luis Fernando Suárez Vélez as Acting Governor in the meantime. President Duque personally telephoned Gaviria to advise him of the naming of Suárez following the Attorney General action.

“I have known and worked with Aníbal Gaviria for years,” President Duque announced via his Twitter account. “I have profound respect, recognition and appreciation for him. I offer my solidarity with him and his family,” President Duque said.

Similar praise came from political parties of all stripes – not only the Liberal Party to which Gaviria belongs, but also from notable Centro Democratico leaders, including former President Alvaro Uribe, former Antioquia governors of various political parties, Medellin mayors, departmental and city elected officials, major commercial/industrial trade associations, and  “thousands of persons and institutions in Colombia,” Gaviria noted.

Not one of the four alleged “contract irregularities” cited by the Attorney General in fact violated any Colombian law, Gaviria said. Even though Gaviria didn’t personally sign any of those allegedly flawed contracts, the Infrastructure Secretary and other officials in Gaviria's former government who actually signed those contracts didn’t violate any law, do anything wrong or engage in any corruption, Gaviria stated.

Nor were there any cost-overruns, technical defects or losses in the project executions, he added.

“I am confident in the Colombia justice system, despite errors of some officials” in the Attorney General’s office, he stated. “I will prove my innocence and also that of other officials” in his former Infrastructure Secretariat who signed the contracts, he added.

 

Published in general news Written by June 05 2020 0

Colombia Attorney General Francisco Barbosa Delgado announced June 5 in a press conference that Antioquia Governor Aníbal Gaviria has been charged with alleged corrupt management of a highway construction contract during his first term as governor between 2004 and 2007.

“The evidentiary elements indicate irregular payment of advances and other anomalies in the process of contracting and construction of ‘La Troncal de La Paz’ [the Peace Highway] during the governor’s first term between 2004 and 2007,” according to the Attorney General.

Following a Supreme Court order, Gaviria has been removed from office and put under arrest, according to the Attorney General.

“The decision was communicated earlier today to the President of the Republic [Ivan Duque] to comply with the legal mandate to suspend [Gaviria’s governorship]. In this sense, the head of state [President Duque] must complete the necessary procedures to guarantee the administrative functioning of the department of Antioquia,” according to the Attorney General

The Attorney General alleges that Gaviria “incurred in contract crimes without compliance with legal requirements in homogeneous competition" as well as "embezzlement by appropriation in favor of third parties."

“[I]n the contract for the improvement and paving of the Troncal de la Paz -- La Cruzada - Caucasia section -- signed in 2005 for a value of COP$41.66 billion [US$11.7 million], an advance payment of 25% was initially agreed and then it was extended to 29%, which meant almost COP$1.5 billion [US$420,000] more for the contractor. This amendment ignored essential legal requirements, such as planning and transparency principles.

“In addition, it was found that the aforementioned advance was paid without the approval of a contractual guarantee that would ensure the correct destination of the money. This omission caused the contractor to invest more than COP$10 billion [US$2.8 million] in machinery and equipment.

“The investigation revealed that two additions were made to the initial contract, which would also have failed to comply with the essential principles of public procurement. One represented about COP$4 billion [US$1.1 million] for adjustments of a specific sector of the same [highway]; the other, by means of a contract addition, was carried out four days before the end of the governor’s term and contemplated the construction of an access road to the municipality of El Bagre, Antioquia.

“This last matter, which committed more than COP$16 billion [US$4.5 million], had to be the subject of a new selection process and could not be part of the original contract,” according to the Attorney General.

Since Governor Gaviria “was the legal representative of the Department [and] the authorizing officer of the expenditure, even if he had delegated the function of contracting, he had to exercise the oversight, coordination and control of the delegation,” according to the Attorney General.

Governor Gaviria flatly denied the charges -- citing evidence he already delivered to the Supreme Court -- and accused his political competitors of cooking-up the prosecution as an act of political revenge.

As required by Colombian law, President Duque on June 5 appointed a temporary governor (Antioquia General Secretary Luis Fernando Suárez Vélez) until the coalition of parties that backed Governor Gaviria in the last election can name his replacement.

Writing in his Twitter account, President Duque added that "I respect institutionality [of the Court order requring Gaviria to step-down]. I have known and worked with Dr. Aníbal Gaviria for years; I have deep respect, appreciation and recognition for him. My solidarity with him and his family."

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

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