(Bloomberg) -- Lima’s mayor is reveling in a victory over Brookfield Asset Management, which is dissolving its Peru toll road company citing losses and harassment by local authorities.
“For me this is a day of celebration,” Mayor Rafael Lopez Aliaga said Wednesday at an event in the capital. “Those people should go back to their country.”
Lopez Aliaga was elected in 2023 promising to vanquish Brookfield’s Rutas de Lima. The company reported a 60% plunge in revenues caused by the suspension of some toll collection sites, in a high-profile case of tensions between foreign investors and Peru’s local authorities.
Rutas de Lima has won $200 million in international arbitration against Lima, which the city has declined to pay. Brookfield has also taken Peru to arbitration, claiming $2.7 billion in damages.
“The dissolution of Rutas de Lima is a direct consequence of the actions of the Peruvian state, which have destroyed the value of our asset without any regards for the rule of law,” said Ben Vaughan, Global Chief Operating Officer at Brookfield Infrastructure Group, in a statement. “Peru likes to say that it attracts foreign investment but the treatment it has afforded Brookfield sends the opposite message.”
Lopez Aliaga, a conservative widely expected to seek the presidency next year, has compared Brookfield to the mafia and dubbed its toll company “rats of Lima.” He says the tolls harm the poor and alleged that the contract was obtained through graft by its previous controller, Brazilian builder Odebrecht SA, which remains a minority partner in the company.
Brookfield bought a majority stake in Rutas de Lima in 2016 for $430 million from Odebrecht, which has admitted bribery throughout Latin America but denies wrongdoing in this particular case. The former mayor who granted the concession is currently standing trial for allegedly taking bribes in exchange for the toll roads contract. She denies the allegations.
The shutdown of Rutas de Lima allows the city to revoke the concession contract and permanently cancel any toll collection sites, if it wishes to. Brookfield has said it will continue operating the road until its liquidation is complete, a process that may take months.
“I feel great joy,” Lopez Aliaga said. “They deserve to be bankrupt.”
--With assistance from Layan Odeh.
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