Santiago skyscraper litmus test of Chile's economy
November 22, 2009
By James Attwood and Nathan Gill
Once a symbol of Chile's soaring copper-driven economy, the stalled project became an emblem of its decline after work ground to a halt in January on what would be South America's tallest building. Now there are signs the 300m tower may resume its ascent, signalling an economic recovery is also under way.
Cencosud, the building's developer, said last month that it had installed a project management team on the site and had resumed work at another shelved venture in Santiago. Chairman Horst Paulmann met with Chilean President Michelle Bachelet and Public Works Minister Sergio Bitar last month to discuss sharing the cost of access roads to the project.
"First it was an icon of the boom and then, when it stopped, it became an icon of the crisis," said Valentin Carril, the chief executive of Principal Asset Management. "I'd expect them to restart building very, very soon. It'd be a big boost to business confidence."
In March 2006, Chile's then-president Ricardo Lagos broke ground on the project, describing it as "a symbol of the Chile that is beginning to emerge before our eyes", according to presidential archives. He thanked "visionaries" such as Paulmann for betting on Chile's future.
The 700 000m2 project includes a 12-screen cinema, a five-star hotel and more than 300 retail outlets including department stores and home-improvement centres. The tallest of four planned towers was designed by Pelli-Clarke-Pelli, the firm behind the Petronas Towers in Kuala Lumpur, Malaysia. It also designed the Hong Kong International Financial Center.
The company started to wind down construction on the $600 million (R4.5 billion) centre in October last year before stopping work entirely in January. Cencosud said on January 28 that building would recommence "once the economic uncertainty is overcome".
Costanera Center remained on hold and its resumption depended on market conditions, a Cencosud spokeswoman, who declined to be named citing company policy, said on Wednesday. Chief financial officer Andres Munita did not return messages seeking comment.
Chile's economy expanded 1.1 percent in the third quarter from the previous three months, while continuing to contract year on year, the central bank said on Wednesday. Chile's peso is the best-performing currency in the past month with a 9 percent gain against the dollar. - Bloomberg
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