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Economy & Business - February 2020

Economic Highlights

PERU | Odebrecht lawsuit. On 4 February, a subsidiary of Brazilian engineering firm, Odebrecht, filed a US$1.2bn lawsuit against the Peruvian government, before the World Bank’s International Centre for the Settlement of Investment Disputes (Icsid). An Odebrecht-led consortium won a US$7bn contract in 2014 to build the 1,150km Gasoducto Sur Peruano (GSP) gas pipeline, but the massive ‘Lava Jato’ corruption scandal left the company unable to complete the project, and the contract was cancelled in January 2017. Odebrecht now contends that it is owed compensation for this cancellation. Peru’s President Martín Vizcarra insisted on 7 February that the failure to complete the project amounted to a cancellation of the contract, and voiced confidence that the Icsid would rule in favour of the Peruvian government. Vizcarra also referred to ongoing investigations into Odebrecht corruption in Peru, including allegations of bribery surrounding the GSP bidding process in 2014, in which the only other competitor was disqualified at the last minute.

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