Bogota has been forced to reduce the distance covered by its first metro line as a drop in value of Colombia’s currency drastically increased the production cost in pesos.
Mayor Gustavo Petro said in October last year that the project would cost 14.5 trillion pesos, or $7.5 billion according to the exchange rate at the time.
However, after the announcement, the value of the peso took a dive from COP2,000 to COP2,500 against the dollar and the price tag for the original metro was raised to 20 trillion pesos.
This forced Petro to make cuts in the project.
Instead of stretching as far north as the Calle 127, Petro’s original budget only allows the construction up to Calle 72.
Santos’ money troubles
The value of Colombia’s peso is strongly influenced by the value of crude oil, Colombia’s main export.
After the price of oil was cut in half between September and February, the country’s national government was forced to cut billions from its 2016 budget that already saw a deficit.
The national government, though, has a responsibility to contribute up to 70% of the cost of the project, while the capital district assumes 30% of the cost.
According to Petro, the capital already has over $2.3 billion dollars allocated for the project, more than the 30% required.
However, Finance Minister Mauricio Cardenas said earlier this week that the national government could only cough up the remainder of the budget if it is able to privatize energy company ISAGEN.
The government is auctioning off its 57.6% stake in the company later this month.
Petro vs. National Government
The new condition annoyed Petro.
“I don’t meddle with the finances of the National Government, but they’re obligated to co-finance the metro…and if they can’t, then instead of waste time in meetings we can tell the city, as they’ve done for the past 70 years, that there won’t be a metro for Bogota.” Petro said.
Petro made sure to mention that at least President Juan Manuel Santos was behind the project, saying “The President wants to start the processes such that construction on the metro as well as the Tranvia [lightrail] will reach the point of no return by the end of the year.”
Despite talking about a metro since the 1940s, Colombia remains one of few Latin American countries whose capital does not have a metro.