A sewage treatment plant in Peru, for which the Japanese government provided 6.66 billion yen (about 58 million dollars) in loans as part of official development assistance, has sat idle for more than two years due to sewage backflow, leakage and other problems, the Board of Audit has found.
The Peruvian government is pursuing legal action against a Tokyo-based consulting firm and a Chinese contractor that were involved in the plant's construction.
According to the Board of Audit and other entities concerned, the plant is located in Iquitos, the capital of the Loreto region in northeastern Peru.
The city, whose sewage coverage percentage stood at only about 60 percent in 2007, had poor hygiene and experienced sewage overflow during rainy periods. To improve the conditions, the Japanese government extended yen loans, which supply emerging countries with funds in the form of long-term, low-interest loans.
The two countries signed off on the project in 2008, with Peru selecting the Tokyo-based consulting firm to handle the design and oversee the construction process, and the Chinese contractor to undertake the work. Under the deal, a sewage treatment plant, network of sewer pipes, pumping station and other facilities were built, with trial operations beginning in 2013.
About a year after the trial operations, the plant was supposed to be taken over by a local sewage and water public corporation to begin full operations.
However, a variety of problems arose, including ground subsidence at the sewage treatment plant and cracks in its walls. In addition, poor connections in the sewer pipe network triggered backflow and oozing of sewage from manholes.
As the public corporation rejected taking over the plant, it has sat idle since August 2016.
That month, the Japan International Cooperation Agency (JICA), which administers Japan's official development assistance, suspended the consulting firm's status as a contractor for five months, saying it had not fulfilled its role in overseeing the construction process and had made a false report to JICA that the project had been completed properly.
At the same time, however, JICA itself failed to keep an eye on how the consulting firm was overseeing the project, and was not aware of the problem until it received a report from the Peruvian government.
The Peruvian government is pursuing legal action against the consulting firm and the Chinese contractor, while at the same time planning to recruit a private company that will invest in the sewage treatment plant. Still, it is unknown when it will begin operating.
"We humbly acknowledge that we were not through about quality management and will do everything we can to prevent a recurrence," a representative of the consulting firm said. "The Peruvian government is demanding we take responsibility for the design and overseeing the project, but these problems were caused by an act of God and failures on the contractor's side."
A JICA official said: "We humbly acknowledge the findings and will improve our practices."
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