Costs Of Argentina Power Transmission Line Soar 70%
1 , 2009 - Dow Jones - Newswires
Authorities on Tuesday
set aside an extra $512.5 million to complete construction of a power transmission
line in northern Argentina, as costs have soared more than 70% over budget.
additional investment comes on top of the original $725 million cost of the 1,200-kilometer
electric power transmission line, which will connect the country's northeastern
power grid with the northwestern grid, uniting nine provinces with a population
of about 8 million.
The Washington, D.C.-based Inter-American
Development Bank on Wednesday said it has agreed to pay out another $300 million
to cover the cost overruns, in addition to the $580 million loan authorized in
The Argentine government will commit a further $212.5
million to the project, on top of the $145 million it agreed to invest back in
2006, the IDB said in a statement.
That brings the total cost
of the project to $1.24 billion.
The higher cost of equipment
and materials such as steel, aluminum and cement, as well as higher labor costs,
have contributed to the overruns, the IDB said in a statement.
two sets of loans are for 25 years, with a five-year grace period at a variable
interest rate, the IDB said.
A spokesman for the Planning
Ministry wasn't available for comment.
-By Matthew Cowley,
Dow Jones Newswires; +54 11 4103 6740; matthew.cowley@ dowjones.com