Peru Cancels Contract for Central Highway Project Over Corruption Concerns

Peru Cancels Contract for Key Road Project Amid Corruption Concerns

The Peruvian government has terminated its contract with PMO Vías, the technical advisor for the New Central Highway (NCC) project, following allegations of corruption. The decision, announced on February 5th, impacts not only the NCC but also other critical infrastructure projects including the Santa Rosa Express Highway and the Santa Rosa Bridge, near the Jorge Chávez International Airport.

Economy and Finance Minister Denisse Miralles had previously indicated the government was considering renegotiating the contract with PMO Vías, stating in mid-January that they were “betting on renegotiating the contract” for the NCC. However, the situation escalated rapidly, culminating in the contract’s cancellation.

According to sources within the project, the termination stems from a recognition by Egis Avia, a member of the Egis group, of committing acts of public corruption involving a foreign official. This admission was made within the framework of a Public Interest Judicial Convention (CJIP), a legal instrument validated by the Paris Court of Appeal.

Provías Nacional, the executing agency for the project, communicated the resolution to PMO Vías on February 3rd, citing the corruption allegations as grounds for termination. The decision was based on a determination that Egis’s actions constituted conduct materially equivalent to crimes of corruption as defined in the Peruvian Penal Code, specifically active transnational bribery.

Minister Miralles emphasized the need for a definitive solution to the NCC project, stating, “There is no project in the history of Peru of S/ 24,000 million or S/ 30,000 million that has been done as a public work. The day they told them it could be done, they were vilely deceived.” She also indicated a preference for a Public-Private Partnership (PPP) model for the project, stating it “must generate its own income to guarantee the financing of the work and operation and maintenance.”

The cancellation raises concerns about potential arbitration claims. A letter dated February 3rd from Provías, revealed the resolution, while an internal report from February 2nd had already brought the matter to the attention of the Ministry of Transport and Communications (MTC).

PMO Vías confirmed the termination, calling the decision “unilateral and surprising” and asserting it lacked technical and legal basis. The company argues the allegations are unrelated to its operations in Peru and pertain to events predating the contract, with no judicial or arbitral rulings to date. PMO Vías stated it “reserves the right to take legal action nationally and internationally to safeguard its rights and interests.”

Provías Nacional, however, clarified that the Government-to-Government (G2G) agreement with France remains in effect and that they have requested France to provide a new technical advisor to replace PMO Vías.

The MTC issued a report on February 2nd, based on documents shared by the Ombudsman’s Office in November, recommending a reevaluation of the contract resolution with Egis Villes Et Transports Sucursal del Perú, citing the anti-corruption clause within the agreement. The clause stipulates that Egis guarantees neither it nor its affiliates have offered or paid any improper payments to public officials.

The situation unfolded following a meeting on January 27th between representatives from the MEF, MTC, Provías Nacional, PMO Vías, and the French Embassy in Peru, where the progress of the projects was reviewed and the importance of fiscal sustainability was emphasized. Sources present at the meeting indicated that the possibility of contract renegotiation or resolution was not discussed at that time.