MercoPress. South Atlantic News Agency

Uruguay reaches agreement with railroad building consortium

“It is up to us, in this new stage, to find a way out,” insisted Orsi

The Uruguayan Government of President Yamandú Orsi Monday reached an agreement with the Grupo Vía Central consortium to resolve a dispute over unpaid debts regarding the Central Railway project, thus avoiding international arbitration, it was announced in Montevideo.

The understanding includes a payment of US$ 144 million for works completed up to March 31, 2025, with US$ 56.5 million specifically for debts between December 24, 2023, and August 7, 2024. This amount will be reviewed by a third-party mediator within 60 days. For the period from August 8, 2024, to December 31, 2025, the government will pay 80% of the availability fee, applying the maximum contractual discount and covering delayed payment costs.

The deal seeks to honor contracts, ensure the project's future, and maintain clear rules between the State and the private sector.

“The previous government did not reach a proposal and, therefore, it is up to us in this new stage to find a way out so that Uruguay can continue honoring the contracts, so that what has to be paid is paid and, fundamentally, so that the Central Railway project has a future,” said Orsi.

In his view, this situation has “economic consequences,” such as the “permanent need to review the numbers and the accounts.” Hence, “there must be clear rules between the private sector and the State,” he added.

Orsi also spoke of a “complex” negotiation and recalled that ”already in the transition, we had been informed that there was some pending chapter (...) linked to the payments.“

In February, the Via Central Consortium announced an international lawsuit against the Uruguayan State for non-compliance and lack of payments since December 2023. The new agreement ”takes us out of those international arbitration headlines” and puts the country on the path of respecting contracts, Transport Minister Lucía Etcheverry explained.