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  • A view of Machu Picchu in Cusco, Peru.

    A view of Machu Picchu in Cusco, Peru. | Photo: Reuters

Published 1 February 2017

Peruvian President Pedro Pablo Kuczynski has delayed construction of the country's second-largest airport, shifting most of the financial burden to taxpayers.

Over 3,000 residents of Peru's Cusco region led an anti-government march Wednesday, protesting the administration's handling of an airport construction project near the iconic Machu Picchu citadel.

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Construction of the Chinchero airport was slated to begin today but has since been delayed by Peruvian President Pedro Pablo Kuczynski. The right-wing leader recently introduced an addendum to the US$509-million project, shifting most of the financial burden from private investors to taxpayers.

The project was originally intended to be a public-private partnership between the Peruvian government and a consortium of private investors, namely Andino Investment Holdings and Corporacion America. But Kuczynski's administration decided to change the terms of payment, alleging that the original contract was unfavorable to the government.

“We opted for an alternative since the contract is detrimental (to the state) because it does not set a ceiling on interest rates, so (the contractor) wants to charge any interest rate,” Peruvian Minister of Transport and Communications Martin Vizcarra told El Comercio.

“So we have assumed the financing for the next five years … while construction progresses, and we will not pay the US$589 million in interests, which is too much.”

The revised construction plans for the Chinchero airport, which is expected to be the second-largest in the country, have sparked unrest in Cusco for two main reasons.

First, local residents are concerned that the delay in construction will be to the detriment of the region's economy, which is heavily dependent on tourism to Machu Picchu. Foreign investors who expected the airport to open today are now holding back funding, given the uncertainty of the airport's completion, El Comercio adds.

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Second, the financial burden on taxpayers contradicts former President Ollanta Humala's promise to work with private investors to finance the majority of the project.

Veronika Mendoza, leader of Peru's democratic socialist Broad Front party, slammed Kuczynski and supported the protests on Twitter.

"Mr. Kuczynski, your statement is a mockery and an affront to the people of Cusco," she posted on Tuesday, when the delay was announced.

"You could perfectly well go to Cusco tomorrow to start construction and along the way correct your addendum."

Protestors are giving Kuczynski three days to begin construction on the airport or they will block roads and carry out protests in an indefinite strike, Prensa Latina reports.

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