International firms circle USD 3.8bn in Peruvian transportation projects

26 March 2019 - 12:00 am UTC

At least 12 companies are closely considering participating in two major Peruvian private transport initiatives, multiple sources close to the processes told Inframation.

ProInversión is seeking proposals for the structuring of the USD 3.2bn Lima–Ica train project and the USD 600m Third Regional Airports Tranche.

On 29 December last year, the Peruvian government made public that it would open a window between 1 April and 15 May 2019 for interested parties to present their plans for the development of the two co-financed private initiatives (IPC). ProInversión will then deliver the proposals to Peru’s Ministry of Communications and Transport (MTC), to analyze and select one proposal to serve as the basis for each project.

Below is a list of companies that have expressed interest in one or both of the processes:

•    Bombardier – Canada;
•    China Railway Tunnel Group (CRTG) – China;
•    China Communication Construction Corporation (CCCC) – China;
•    China Railway Construction Corporation Limited (CRCC) – China;
•    China Railway signal & Communication (CRSC) – China;
•    China Railway Eryuan Engineering Group (CREEC) – China;
•    DOHWA Engineering – South Korea;
•    EPTISA (JSTI Group) – Spain;
•    Ferrovial – Spain;
•    Paris Airports – France
•    Sacyr – Spain;
•    Systra – France

Following the 15 May deadline, ProInversión will have a period of 15 working days to inform proponents if their proposals have been accepted or if they require amendments or clarifications.

In the case that the proposal(s) require any of the above, the proponent(s) will have around 20 days, (depending on the nature of the request) to respond to the requests. Once the request for clarification has been responded to by the proponent, ProInversión will have 10 working days to deem the proposals acceptable and deliver them to Peru’s Ministry of Transport and Communications (MTC).

The MTC will then select the best proposal and declare the projects ‘of interest’ to facilitate the tender process.  

The selected proposals will enter into the “formulation” stage, which requires pre-investment studies and would end with an “evaluation report”, followed by the projects advancing to the “structuring phase” of a further pre-investment study. 

Should the project be declared ‘of interest,’ there would then be start a 90 working day- period for third-parties to come forward and express interest. Should no third party come forward, the project would be awarded directly to the proponent. If third parties do come forward, a full international tender would open.

In the result of a third-party winning the project, the proponent would receive compensation for its development costs incurred until that date.

Inframation could not confirm at this stage of the process if the project could at that stage be “rejected”, or if the authorities and chosen developer would work together to reach a satisfactory version of the project so that it would be approved in any case.

One source active in the sector was sceptical about the process, telling Inframation that the process could mean “spending 100,000s of dollars in an insufficient time frame, with the insecurity that other companies could be doing the same thing and that they are selected. There’s a lot of uncertainty and risks of losing the investment.” The same source speculated that the entire process could take around five years.

 

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