Cuzco awoke to a painful surprise on Monday morning. Resigning Minister of Transport, Martín Vizcarra, who is also the First Vice President of the country, announced that the contract and addenda between Peru and the Kuntur Wasi consortium to build Cusco’s new international airport in Chinchero had been set aside. Kuntur Wasi threatened legal action while Cusco announced a general strike.
While Peru’s President, Pedro Pablo Kuzcynski, insists the airport will still be built, although “with modifications”, the issue has created a sense of crisis and opened many old wounds and arguments.
The crisis, and Vizcarra’s resignation stems from a report from Peru’s General Comptroller which rejected the propriety of the Addenda to the contract and argued criminal charges should be brought against the officials who signed it.
In February, the contract suspended for three months in order for aspects of the contract to be renegotiated because the Consortium, Kuntur Wasi, and demanded larger payments from Peru due to increased costs, they argued. Though the Addenda was negotiated and signed, Peru’s General Comptroller argued the document is illegal and provides improper payments to Kuntur Wasi.
The airport, though supported almost uniformly by Cusco’s elite, is also challenged by critics. The elite insist the airport should be built and argue the national government should return the land for the airport so that the Regional government of Cusco can build the airport which will receive international flights directly from many countries and thus, they hope, expand the number of tourists who visit the Imperial City and thereby generate more employment and more income.
Critics raise questions about the site, about the future of development in the region, about the impact of the airport on water supplies to Cusco, the potential destruction of archeological sites, and about the destruction of the rural communities of Chinchero with at least thousand years of history and culture.
Others point to the weight of corruption in large-scale construction projects such as this and ask that the project be built by the Peruvian state instead of by a private enterprise and argue the cost will be much lower.
This runs against the dominant economic logic of privatization. Some commentators argue that privatization is already locked into international agreements Peru has, such that Kuntur Wasi could bring charges against Peru for violation of contract in international arbitration forums established by industry, where the Peruvian state is at a disadvantage. They fear setting aside the contract could cost Peru the losses the company might claim it sustained in future earnings.
In addition, it has been argued that the Controller General’s position is one appointed by the Congress dominated by Fuerza Popular, the party of Keiko Fujimori. As a result, they claim this is one more act in that party’s struggle to bring down or at least seriously weaken the government of Kusczynski.
No matter what, as the political and economic struggle go on, we can expect the issue of the Chinchero Airport to be one that continues to appear before us.