Brazilian engineering company Mendes Júnior may be pulling out of its contract to carry out works on Brazil's largest waterworks initiative, the multibillion-dollar São Francisco river transposition project (pictured).
The company, which is seeking a debt restructuring, has notified the federal government that it may need to give up the works as acquiring funds has become difficult, local paper Valor Econômico reported.
Mendes Júnior has been hit by Brazil's severe economic recession, which has resulted in a credit crunch throughout the construction industry.
As the multi-year project was scheduled to be wrapped up this year, a number of actions could be taken to assure timely completion.
Among them are launching a new tender for the remaining works, closing an emergency contract without bidding, transferring the contract to another company through private negotiation, or letting the army engineering corps take over, according to the report.
The project, which has an overall budget of some 8.4bn reais (US$2.56bn), is aimed at distributing water from the river to the dry areas of Brazil's northeast. No budget has been defined as to the amount of work needed to complete the initiative.