Colombia's national infrastructure agency ANI has canceled a contract to repair and operate a 498-kilometer railway.

The concessionaire was Ferrocarril del Pacifico (FDP), which failed to comply with the terms of the concession, with ‘serious’ infractions including the disposal of property without prior consent. The majority stakeholder of FDP is Fenwick Group, a subsidiary of multinational shipping company Impala, which in turn is a unit of Trafigura.

The concession involved the upgrading, maintenance and operation of freight services on the Buenaventura — Cali, Cali — La Felisa and Zarzal — La Tebaida routes.

This process to cancel the contract began in 2017, when ANI advised the concessionaire to normalize their situation, but this failed to remedy the defaults.

According the terms of the ruling, the resolution orders FDP to pay US$32.8 million for the damage caused to the Colombian state as a consequence of the breaches of contract. ANI also notes that FDP has separately been fined US$275 million for suspending freight services in 2016, a government inspection having revealed a failure to maintain track and structures to the required standards.

ANI plans to launch a new public-private-partnership (PPP) auction for the railway after it resolves the contract dispute. A new company or consortium would then continue to operate and maintain the asset under a new contract.