"What will happen to Ecuador’s paralysed Toachi Pilatón dam?" 7 June 2022

In March 2022, Ecuador was shaken by the news that the Chinese state-owned China International Water & Electric Corporation (CWE), the last company to preside over the Toachi Pilatón hydroelectric project, was suing the country for US$100 million. The reason: Ecuador’s decision to unilaterally terminate the contract with the company.

CWE litigated against the Ecuadorian state electricity holding company (Celec) for "breaches of contract", such as delays in paying wages. Celec, for its part, accuses CWE of a series of failures: in the dam’s waterproofing barriers and control and lighting systems; for accumulating hazardous waste; and its non-compliance with an environmental management plan.

In an interview with Diálogo Chino, Gonzalo Uquillas, who until this week was Celec’s general manager, said that, despite the five changes in government since construction of the mega-project began in 2008, the state has fulfilled its contractual obligations and the "companies [formerly involved in construction] are the ones that have not taken responsibility”. [...]

Failures

Celec decided to break with CWE due to structural flaws that it claims the Chinese company did not address. Furthermore, the Comptroller’s Office, a state supervisory body, reported fissures, cracks and landslides that compromised the power plant and rendered it inoperable.

Uquillas, Celec’s former top official, said CWE did not remedy cracks that appeared in the nine-kilometre water loading tunnel.

Similarly, the slopes around Alluriquín’s upper balance chimney – a key structure in preventing surges in water pressure – are unstable. “This impedes the operation of the plant,” said Uquillas.

“The Chinese contractor did not work on solutions to stabilise the slopes and the Comptroller’s Office warns that there is a risk of chimney collapse,” he said, adding that there were irregularities in the execution of the waterproofing barriers for the Pilatón water intake and the Toachi dam. [...]

Researcher Arturo Torres, who has investigated the issue for his digital portal, Código Vidrio, said: “Toachi Pilatón is a monument to waste. It still doesn’t work. Its facilities are abandoned. It does not generate a single kilowatt of energy, but it did cause a short circuit in the country.”

He added: “It was the first bribery scandal linked to a former official of Rafael Correa’s government. The former Minister of Electricity, Alecsey Mosquera, received – according to court documents – one million dollars from the Brazilian construction company [Odebrecht] as a bonus.”

With the departure of CWE, the Ecuadorian state will most likely seek another company to finish the unfinished work and repair the faults. The saga continues.