Work has re-started on the 19.5km long Misicuni water tunnel in Bolivia following the government’s release of US$2.4M in late stage payments to contractor, Astaldi/ICE JV.

Previously on January 9, the JV had officially informed the Misicuni Company of its intention to withdraw from the project saying that the nominated paymaster, Banca di Roma had not transferred agreed payments for the months of August, September and October. By this stage work had already stopped with just 861m left to bore.

Foreign Commerce minister Claudio Mansilla blamed the non-payments on an “administrative problem” linked to an addendum to the original contract made in May last year. “The matter has now been resolved and the money is at the disposition of the contractor. We will shortly see a resolution to the Misicuni Tunnel affair and expect that Cochambamba can have access to water as soon as possible,” he said.

The 3.5m diameter tunnel is being bored by two TBMs at extreme depths of up to 1km. Daily productivity of between 25m and 34m have been achieved working from two fronts, Botacama and Calio.

The Misicuni Company has a budget of US$63.2m to build the tunnel, which will transport water through the Andes Mountains to alleviate severe shortages in the eastern city of Cochabamba. While Astaldi-ICE is the main contractor, a US$2.4m contract was awarded to Tams/Ingetec/ Claure Pereira to oversee construction, which is costing US$3,000 per metre.

The project’s history has been surrounded by conflict. In 1999 the Bolivian government privatised the water industry, selling it to the foreign owned consortium Aguas del Tunari. Resulting 200% price rises sparked mass rioting across the country that left one dead and many injured. The scale of unrest finally, in April 2000, caused the government to tear up the privatisation contract.