Proposals sought for US$3.86 billion transport concessions in Peru under new PPP model

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Proposals sought for US$3.86 billion transport concessions in Peru under new PPP model

The Ministry of Transport and Communications (MTC) and the Private Investment Promotion Agency (ProInversión) of Peru have invited private parties to submit proposals for rail and airport concessions under a new public-private partnership scheme: Co-financed Private Initiatives (Iniciativas Privadas Cofinanciadas (IPCs)).

The rail concession concerns the development of a railway line connecting the departments of Lima and Ica in western Peru. The selected private partner will design, finance, construct, operate and maintain the line, which will serve both passenger trains and cargo, and provide rolling stock. The estimated total investment of the project is US$3.26 billion.

The railway will have an approximate length of 323.7km, with approximately 44km of tunnels and 50km of bridges and elevated viaducts. It will interconnect with the metro system in Lima and Callao, port terminals in Callao and General San Martín Port Terminal in Pisco.

The railway will have a maximum speed of 200km/h with an estimated travel time between Lima and Ica of three hours. The journey currently takes four hours by car. The concession period is 30 years.

The airport concession to be tendered involves the operation and maintenance of eight regional airports located in the cities of Jauja (Junín region), Huánuco, Jaén (Cajamarca), Ilo (Moquegua), Nuevo Chimbote (Ancash), Rioja (San Martín) ), Tingo María (Huánuco) and Yurimaguas (Loreto).

The total project investment is estimated at US$600 million and the concession period is 30 years. The works to be undertaken by the private partner include modernization of land-side facilities, such as passenger terminals, and improvement of air-side infrastructure, such as airstrips, taxiways, and aircraft parking platforms.

Interested parties are invited to submit proposals for the concessions from 1 April to 15 May 2019. ProInversión will then evaluate the technical and financial capacities of the proponents. The proposals that meet the IPC requirements will then be Admitted to Processing (Admitida a Trámite) and an assessment of the proposal's relevance/importance (Opinión de Relevancia) will be undertaken by the MTC.

If the outcome of the assessment is positive, pre-investment studies will be prepared. In order to proceed, proposals must be declared feasible by ProInversión (through issuing a Declaratoria de Viabilidad) and corresponding evaluation reports must be approved by the MTC and the Ministry of Economy and Finance (MEF).

ProInversión will then publish Requests for Expressions of Interest (RFEOIs) corresponding to the approved proposals. If no third parties are interested, a concession contract will be directly awarded to the proponent. If other private entities declare interest in the proposal, ProInversión will conduct a selection process, though priority will be given to the original proponent.

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