May 14, 2021

Companies break air transport contracts with Cuba for fear of embargo



At least two international companies participating in major airport and rail projects in Cuba have canceled the contracts for fear of being sanctioned by the United States, which in the last two years has hardened the embargo on the island.

“The US blockade (embargo) has a real and direct effect on transport,” said Cuban minister Eduardo Rodríguez, in statements released on Wednesday by state television announcing the suspension of contracts. and read the letters sent by the companies.

Rodríguez, who did not specify the names of the companies, mentioned three specific cases: the remodeling of the airports of the island, the purchase of two planes for the state-owned Cuban airline and a project for the modernization of the country’s railway workshops.

The minister explained that “recently” the Cuban Government received a notification with the withdrawal of “another important international company in our bidding project for investments in airports.”

In the letter, the company “reports that they stop participation in the process with the current schedule of the project” due to “(…) new challenging circumstances for the economy.”

FRENCH COMPANIES

Although the official did not mention the names of the companies at any time, the data points to the French giant Bouygues, which in 2016 won a concession to expand the international airport of Havana José Martí, the most important in Cuba.

In August 2016, the state press revealed that Bouygues and Paris Airports won the government concession to expand and manage, respectively, the Havana airport and the nearby San Antonio de los Baños airfield.

The French infrastructure firm has an important presence in the Caribbean country, where it executes several civil works projects, mainly in the hotel sector.

The airport initiative envisaged “the financing and execution of immediate actions that improve the quality of services, as well as investments in the medium and long terms corresponding to the estimated passenger growth,” according to a note from the Ministry of Transportation issued in that moment in the state television news.

Since then there has been no news of the project and apparently the renovation works never started, or at least no large intervention has been appreciated at the airport facilities.

In the plans of the authorities in 2016 there was also the improvement of the rest of the airports of the island to prepare for the flood of visitors expected as a result of the restoration of commercial flights between the US. and Cuba that same year, one of the main fruits of the bilateral “thaw”.

However, after the arrival of Donald Trump, the US administration has again banned direct flights – both charter and commercial – except for Havana.

“THEY INTEND TO GENERATE CHAOS”

The minister acknowledged that this measure will imply a large increase in the flow of passengers to the airport of the capital, which was already the main gateway to Cuba and will now suffer problems of “congestion” by having to also receive those who previously flew from the US .UU. to the airports of other provinces.

“They intend with these measures to generate chaos in our country,” he denounced.

Another European company – also mentioned by name – canceled a contract to sell two planes that were “practically purchased” for domestic flights, said the Minister of Transportation.

The company “will reimburse the anticipated amount” and regretted that the rupture of the agreement is the “only solution to the current circumstances,” said the official.

The state-owned Cuban airline has been experiencing problems for years: a large part of its fleet is in poor condition or damaged, so it has had to resort to lease contracts to operate, and some of those operation contracts are also being canceled or not renewed for fear of the embargo.

Cuba’s problems in acquiring airplanes have now worsened because Washington’s latest sanctions include a decrease (from 25% to 10%) in the percentage of US components that products acquired by the Caribbean country may have, even in other markets.

Therefore, the minister recalled, Cuba cannot buy anything that has more than 10% of US-made components, which makes it extremely difficult to buy airplanes.

THE TRAINS, ALSO IN JAQUE

The third of the cases revealed by Rodriguez refers to a project for the modernization of the railway workshops from which another “important foreign company” has withdrawn after two years of work in the face of doubts generated by a possible application of the Helms Law -Burton.

Although the minister also did not cite the name of the company, it is likely that it is the National Society of French Railways (SNCF), with which the Cuban Railways Union announced in 2018 an “ambitious collaboration project” with an investment of about 40 million euros (46.7 million dollars).

The agreement, which was to be extended until 2028, included the modernization of two large locomotive workshops in Havana and Camagüey (downtown), recover passenger cars and put into operation the one known on the island as “French train”.

In recent years, Cuba had negotiated several agreements – including a billionaire with Russia – to modernize its deteriorated and overexploited rail system, which collapsed during the severe economic crisis of the 1990s and has not yet recovered.

“We are working and looking for alternatives because we have to solve these problems,” the minister added.

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