1. The Republic of Guatemala, through the Ministry of Economy, in the context of the international arbitration1 before the International Centre for Settlement of Investment Disputes (ICSID), initiated by the company Railroad Development Corporation (RDC), against the Republic of Guatemala, has asked me to render an EXPERT REPORT regarding the following:

a. On the content, extent and support of the State Interests, in the context of the Constitution and the Laws of the Republic;

b. On the content, extent and scope of the Process of Declaration of Lesividad;

c. On the content, extension and scope of the Process of the Contencioso Administrativo;

d. On the legality of the Process of Declaration of Lesividad followed by the Republic of Guatemala, particularly as to the contracts contained in public deeds number 143 of 28 August 2003 and 158 of 7 October 2003 both formalized at the offices of notary Mariela Marroquin Claudia Luther ("Contracts 143 and 158");2 and

e. On the validity or invalidity of Contracts 143 and 158, and the damage such Contracts have caused, if any, to the Interests of the Republic of Guatemala.

2. In accordance with the documents that respectively support them, the legal sources consulted, my professional experience as a university professor for over 29 years, legal counsel and litigator, I arrive to the following MAIN CONCLUSIONS, in accordance with the following report and the issues addressed in the same:

a. That the "state interests" that are damaged are fully defined in the Constitution and the laws of the Republic of Guatemala; in general, such interests, which are susceptible to damage, are those related to the purposes and duties of the Republic of Guatemala and, in particular, those that define the specific laws applicable to the subject case, in accordance with the type of injury caused.

b. That the process of lesividad is not unique to the Guatemalan legal system, this process also exists in other legal systems, such as Spain, France, Mexico, Costa Rica, Ecuador and Argentina, among others.

c. That the process of lesividad in the Guatemalan legal system, is not arbitrary; the procedure and its substance has to be supported by the Constitution of the Republic and the laws of the country;