Expert: Derwick Associates overbilling estimated at $2.93 billion

11 years ago By Alek Boyd

Derwick Associates, the energy company involved in a mega corruption scandal, overcharged the Venezuelan State as much as $2.933 billion according to estimates from energy expert Jose Aguilar. In an interview with INFODIO, Aguilar argued that Derwick Associates is the "tip of the iceberg" in a considerably larger swindle that could have cost Venezuela in excess of $23 billion. Aguilar named names of international corporations taking part in the scheme: Argentina's IMPSA, Spain's IBERDROLA and Duro Felguera, France's Alstom, China's CMEC and Sinohydro, Germany's Ferroostaal, Thailand's TSK, as well as American Waller Marine. In every single project in which the mentioned companies and a host of local partners have been involved overbilling go from 48% to as much as 515% according to Aguilar.

Aguilar has identified 40 projects, which are then broken down to: announced power in megawatts, announced costs, fair international price, overprice percentage, promised date of project completion, contractor/s, whether project is operating, megawatts available/unavailable, megawatts pending, and delay in number of months since announced completion of project. It makes shocking copy, from IMPSA's 0% rate of delivery in Tocoma nearly six years after project should have been completed to CMEC's 24-month delay in Planta Centro in Carabobo.

Aguilar used some official sources (PDVSA, CORPOELEC, Ministries of Basic Industries and Electric Energy) in his calculations. He claims that the Chavez regime implemented a policy-of-secrecy, whereby published statistics are either totally unreliable, opaque or, simply, non existent. As a way of example Aguilar mentioned that he keeps tabs on Planta Centro thanks to leaked pictures and documents that his sources send regularly. He believes there's a purpose to such policy, which is to avoid accountability of any kind, or any counter arguments that energy experts could confront the government with. Aguilar went on to say that 2008 was the last year in which a partial report of Venezuela's energy situation could be had, whereas the last full report was published in 2007, by CAVEINEL, a formerly independent trade association that was taken over by the Chavez regime.

In addition, Venezuela's Oficina de Operación de Sistemas Interconectados (OPSIS) used to produce a monthly bulletin -which was a must-read source for Aguilar and other experts- but that too was discontinued in 2010, shortly after Ali Rodriguez Araque took over the Ministry of Electric Energy. Aguilar further explained that art. 108 of Venezuela's Electricity Law (Ley Orgánica del Sistema y Servicio Eléctrico) even makes illegal -with 8 to 16 years imprisonment- to reveal information about the country's power system. With regards to this law, Aguilar said that a rape convict can get a maximum of 14 years, while those publishing matters related to the power situation can get 16 years.

Aguilar said that IMPSA, which he estimates overcharged Venezuela in more than $7 billion in Tocoma alone, managed to also get into a project in Guri II* (Guri Dam). Aguilar doubts that IMPSA has the knowhow and technical capacity to carry out such work, he said "I question that IMPSA has the capacity to execute such extraordinarily complex work, as required in Guri, whose characteristics are unique in the world." Other experts agreed. For all the benign PR around IMPSA's boss Enrique Pescarmona, the reason why IMPSA got all these deals could be Hugo Chavez's friendship with Nestor and Cristina Kirchner. Aguilar believes that Ali Rodriguez Araque's hands are all over these scams.

What is shocking is that, despite having assigned, or already spent, in excess of $23 billion, the power situation is not remotely solved. While Derwick Associates, IPMSA, and the rest of them have basically been allowed to ransack Venezuela, Aguilar concludes that the situation can only get worse, given the irresponsible way in which contracts have been awarded to dodgy, or simply incapable outfits that lack technical knowhow.