Latin America: Peru to reopen USD 600m water project tender

26 February 2018 - 12:00 am UTC

Peru plans to relaunch a tender for the USD 600m Obras de Cabecera water provision project in Lima, with the IFC as an advisor.

The IFC and ProInversión, the procurement and investment agency, signed a contract on 21 February. The government expects to award the project in 1Q19, later than the earlier 2018 target included in previous announcements.

Inframation reported in July 2017 that the tender process for the DBFO project might be reopened. In September 2015, the government shortlisted four bidders for the 30-year concession with a DBFO delivery model but did not move the project ahead.

Through its PPP advisory unit, the IFC will provide ProInversión with the following services:  

 -Review and update the technical and socio-environmental aspects of the project
– Clarify project risks
– Evaluate financial structuring and payment mechanisms
– Assess potential partners and participants and carry out promotional events
– Verify and validate tender documents
– Provide advice on the transaction
– Advise on necessary documentation for financial close of the project

A key aspect of the delay has been a lack of clarity over which currency the financing will use.

Given the time lapse and the changes in the project, ProInversión may re-open the tender to include new bidders, in addition to those already shortlisted. It has yet to specify whether those consortia must adjust their original offers or at which bidding stage the process will reopen.

The concession aims to boost the supply of drinking water in the north, east and south of the capital by building and expanding reservoirs, as well as building tunnels, pipelines and connections. More information on the project can be found here.