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Montevideo, September 27th 2021 - 05:05 UTC



Uruguay: Corruption allegations in failed pet project of former president Mujica

Monday, August 23rd 2021 - 09:10 UTC
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What is left of the Gas de Sayago LNG plant project which was promoted by former president Mujica What is left of the Gas de Sayago LNG plant project which was promoted by former president Mujica

A major corruption scandal is unfolding in Uruguay with a pet project from former president Jose Mujica, which he tried to implement during his mandate, 2010/2015, but failed with accumulated losses of at least US$ 300 million.

And to make things even murkier it has now come to light that despite the project being considered inviable already in 2015, the managing staff continued to travel, dine, party and spend money paying with the project's credit cards.

In effect last week, board members from two of the largest Uruguayan government-owned companies, UTE (energy) and ANCAP (fuel and refining) went to Court and lodged a complaint arguing that managers of Gas Sayago, the joint company that would receive, store and distribute Liquid Natural Gas in Uruguay, allegedly caused “a very serious economic damage to the State, taking advantage of public funds,” and which could have been interrupted.

The chairwoman of UTE, Silvia Emaldi said that following the audit from PWC, (Price, Waterhouse, Coopers) she was obliged to make the official complaint in court.

The deputy chair of ANCAP, Diego Durand pointed out that according to the minutes of the company, then ANCAP president Raul Sendic (who Mujica was preparing to succeed him as presidential candidate) as well as other members of the board and General Manager Marta Jara organized and approved the first trips and contacts for the LNG Gas de Sayago plant to be.

Furthermore, Durand said that for negotiations to continue Mujica signed a sovereign surety bond in support of the budding company, which meant Uruguay assumed full responsibility for the project.

Emaldi and Durand added that the Deloitte external audit underlined already on 13 December 2015 that the whole deal was uncertain and recommended to abstain from continuing. UTE apparently back in 2013 said that the whole LNG plant project was of “negative profitability”.

Durand continued, “in other words, it was time to cut your losses and pull out”, but management continued in “a capricious, arbitrary way to spend funds in salaries, travels and other expenses. These included trips to Korea, Singapore, United States plus expensive restaurants and fitness gyms”.

Apparently, four persons had access to the corporate credit cards and lust for spending, then ANCAP General Manager, Marta Jara, Deputy General Manager Veronica Lizagarra, Pedro Aurrecochea and German Martinez, Financial manager.,

Allegedly according to Durand, General Manager Marta Jara had already reserved the new company's CEO job for her, while the dynamic four managers spent some US$ 290,000 in travelling overseas, US$ 247,000 in courses and postgraduate studies in preparation for the to be LNG plant and another US$ 212,000 in food, hotels and other amenities. All this “while they anticipated great earnings but the truth is Gas de Sayago never made a buck, on the contrary, there are still unpaid bills to providers”.

Likewise another few million dollars will be needed to remove all the concrete, columns and iron infrastructure of the never to be planted which has become an environmental hazard and left artisanal fishermen without their fishing grounds.

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