LIMA--A consortium controlled by Brazilian builder Odebrecht S.A. will miss a financing deadline on Monday for a natural gas pipeline project in Peru and awaits government notification that it will lose the $5 billion contract, the company said on Friday.
Odebrecht, a family-owned conglomerate at the center of a growing bribery scandal in Latin America, has spent months trying to sell its 55 percent in the project as a condition from banks that would provide $4.1 billion for construction. But worries about liability for potential crimes committed have thwarted possible deals and the government has said it would not extend the financing deadline.
"The concessionaire company is waiting for official communication from the government that will allow us to start the process of returning the concession," the consortium said in a statement. Spain's Enagas SA controls a 25 percent stake in the project.
Shares of Peru's biggest construction group, Grana y Montero, which owns a 20 percent stake, slipped more than 2 percent - extending their more than 30 percent drop since a month ago when Odebrecht admitted to bribing officials in Peru. "Grana y Montero's prestige is damaged," Grana's general manager Alvarado told local broadcaster RPP. "Starting Monday, we'll be entering a new legal phase, which will be harder to control."
Grana told Reuters last month that the government would have to pay at least $1 billion in compensation if it ends the contract, and that construction might not resume for three years. The government of President Pedro Pablo Kuczynski has not responded requests for comment.
The government has said it would seek to quickly hold a new auction. It would also modify the contract to connect the pipeline to cities in southern Peru and to ensure it does not draw on financing from consumer electricity bills.
General work on the project is about 37.6 percent finished, with construction of the pipeline 10.7 percent complete.
