Spanish companies have long had an association with the Dominican Republic (which shares the island of Hispaniola with Haiti) and have been one of the major foreign investors in the country.
However, according to recent reports from business sources reported in Spain’s national press, Spanish companies are facing a crisis due in part to the action of Brazilian conglomerates.
At the beginning of this month, Codacsa, a highway construction company with a majority ownership by Spanish investors, was forced into nationalization by the army. This came just days before Crown Prince Philippe of Spain visited in part for the inauguration of the Dominican Republic’s new president Danilo Medina, and in part to mediate between the government and Spanish-interest companies.
In 2002 Codasca was awarded a 30-year contract to build the island’s roads. That contract has been cancelled in the latest nationalization action. The International Arbitration Court in Paris recently ruled that the Dominican government must pay US$45 million to Codacsa far from the US$100 million claimed by the company. The Dominican government’s claim for US$300 million from Codacsa, was rejected by the court.
Spanish business sources report that more than 40% of the government budget for public works has gone to Brazilian groups, such as the Brazilian construction and engineering giant Odebrech, and that they are being unfairly squeezed out.
Their fate will be decided by the new president Danilo who was sworn in on August 16 and whose election promise included the eradication of corruption.