Quito Metro project omitted from 2015 budget following financing dispute

Quito Metro project omitted from 2015 budget following financing dispute

The Quito Metro project has not been included in the 2015 General State Budget, admid claims of spiraling costs, mismanagement and a dispute between central and regional government in the Ecuadorian capital. The municipal government has proposed that the state cover the shortfall, while the President insists his administration will not provide additional funding for the project.

In an official response following media consultation, this was “not included because it is not the decision of Central Government, but instead the Municipality of Quito. But, if the mayor’s office decides to request an amendment, a consultation will be held with the government to decide whether additional funding will be included”.

On 3 December President Rafael Correa confirmed the state would contribute 750 US dollars towards the project, whereas the regional government have said they require funding in excess of this amount. The mayor of Quito submitted a report that stated the central government will assume responsibility for the additional costs which have been identified since initial plans were announced. The projected shortfall is between 409.2 and 852. million US dollars. The report also proposed that the government acquire Empresa Eléctrica Quito, which is valued at 265 million US dollars.

The proposals made by Quito mayor Mauricio Rodas was not supported by the executive, with senior officials claiming that Rodas expected the country to carry the burden of the city’s deficit. Rodas has requested a meeting with President Correa to seek a solution and while Correa is keen to meet with the city’s mayor, he has reaffirmed his reservations. Correa has requested more information on the construction bids and stated that before any additional funding is provided the government must analyse all of the data.

The president has strongly affirmed his current position, asserting that under Rodas’ proposals “the municipality does not pay one cent more” and that those leading the project “have our full support, but this is a municipal responsibility.

The city’s previous administration claimed that the project would cost 1,500 million US dollars, whereas the four qualifying consortiums for the project have presented plans each totaling between 1,587 million and 1,949 million US dollars for the 15 station project.

Since the announcement, a number of politicians have publicly questioned the viability of the project and the high costs of perusing something which may ultimately not come to fruition.

Quito council member Antonio Ricaurte has pleaded that citizens be told “once and for all, if the metro is vialble or not” and “if it is not going to happen, seek an alternative which may well be light rail in Quito”.

Ricaurte explained that the municipality will not be able to borrow the necessary funds to complete the project, as the Code of Planning and Public Finance limits the debt to income ratio at 200%, and the costs involved would exceed this limit.

The Minister of Political Economy, Patricio Rivera, has made reassurances that the 750 million US dollars the state committed to the project is still available, but insists that the municipality would have to take responsibility for the shortfall. He asserted that “each level of government has to assume their responsibilities and as a result of this, we are saying that we feel very comfortable as an administration to offer the metro to Quito, and now they say, ‘you know, I am short on my contributions, but national government you provide the money that is missing for my project'”.

Ricaurte said that five years ago Quito was told it would by 1,500 million US dollars, then 2,000 and now maybe 2,500 million. Ricaurte insists that he has never opposed the bill, but he assets that he “totally disagrees with the idea that the city of Quito should be told things that are not true”.