UPDATED: Mexican firm wins Lake Titicaca concession

29 April 2019 - 12:00 am UTC

ProInversión has awarded the 30-year, PEN 841m (USD 256m) contract for the Lake Titicaca water treatment plant to Consorcio Fypasa Construcciones y Operadora de Ecoisistemas, according to a 29 April announcement.

This story was updated from a story published on 29 April to provide additional details on how the project will be financed and who advised the winning team.

Sources close to the deal stated that Baker McKenzie’s Peruvian subsidiary, Estudio Echecopar, is the consortium’s legal advisor for the process.

Consorcio Aguas de Puno, comprised of Acciona and Grupo ACS, originally presented the private initiative for the project in 2014, and the underlying expectation was that the consortium would win the bid. However, Consorcio Aguas de Puno was disqualified based on its technical offer.

Consorcio Aguas de Puno will be reimbursed for development costs incurred thusfar.

The four economic bids from qualifying consortia were as follows:

   Capex (RPI) Payment Mechanism (RPMO)
Consorcio Collas (France) PEN 138m (USD 41m) PEN 57m (USD 17m)
FCC Aqualia (Spain) PEN 38m PEN 16m
COPASA Sucursal del Peru (Spain) PEN 38m PEN 14m
Consorcio Fypasa Construcciones y Operadora de Ecosistemas (Mexico) PEN 28m PEN 12m

The project calls for the construction of six new water treatment plants in various regions around Lake Titicaca, including Moho, Ayaviri, Juliaca, Puno, Juli, and Ilave. It also includes upgrades to four existing treatment plants in Yunguyo, Lampa, Huancane, and Azangaro.

All five pre-qualified bidders submitted technical and financial bids last Monday, 22 April.


The project is co-financed meaning that both the developer and the government will contribute to the capex costs. The project’s payment mechanism is named “service payments” (RPMOs), paid by the government to the concessionaire.

Firstly, the concessionaire will raise a given amount of the capex costs. Given that the project capex is around USD 256m and the winning bidder requested PEN 93.73m (USD 28m) for government capex contributions (RPIs), the amount of debt to be raised by the developer would likely be in the region of USD 228m. It remains unclear if FYPASA will raise debt to fund the project or fund it on an all-equity basis.

Following the developer reaching financial close, the government will pay three staggered capex costs (RPIs) to the concessionaire, upon the full completion of certain construction milestones. The RPI offered by FYPASA was PEN 93.73m (USD 28m) and will be paid over a three-year period.

The RPMO offered by FYPASA was PEN 39.82m (USD 12m). Sources senior at ProInversión could not immediately confirm if this is a one-off payment or that is an amount paid regularly.

ProInversión stated that the prices offered by FYPASA allowed the Peruvian government to save 30% on payments, compared with the proposal of Aguas de Puno.


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