April 24, 2019 / 4:21 PM / a year ago

Peruvian builder Grana set to lose Lima road contract amid graft allegations

LIMA, April 24 (Reuters) - Jorge Munoz, mayor of the Peruvian capital Lima, said on Wednesday he was poised to annul a $200 million road-building contract awarded to the country’s largest construction company, Grana y Montero, due to allegations it may be involved in graft.

Munoz said he had decided to rescind the contract after local media reported that a former executive of Brazilian builder Odebrecht told prosecutors that Grana paid $3 million in bribes to secure a different project that the two companies had built together.

“Due to what has come to be known, as soon as I get back to the office I’m going to send a letter telling them that our intention to reactivate the expressway...will be left without effect,” Munoz told journalists in a televised broadcast of a public event. “We’re going to have to look for alternatives so the project can be built.”

The decision is part of the fallout from a graft scandal involving Odebrecht, which spurred criminal investigations across Latin America after the company admitted in late 2016 that it had secured lucrative regional contracts with bribes.

Grana declined to immediately comment on the matter on Wednesday.

The company was once Odebrecht’s most important partner in Peru and has repeatedly denied knowing about or taking part in bribes that Odebrecht alleges it gave to local officials.

Grana won the $200 million contract to widen a city expressway in 2013, before Munoz took office this year.

Munoz said last month he wanted to relaunch the project after bureaucratic hurdles kept Grana from starting work on it.

Reporting By Marco Aquino, Writing By Mitra Taj

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