Araraquara Toll Road

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The project includes the rehabilitation and expansion of the 440 km highway system. Triangulo do Sol S.A. ownership is divided as follows: Leao e Leao holds 51% of the shares; Conter holds 33%; and Braest Participacoess hold 16%. The bidding process was competitive and the award criteria was the highest cannon fee to be paid to the government. There was no provision for contract renewal (assets will be returned to the state government). The total project cost of US$ 454.4 million includes US$ 382 million in investment and US$ 72.4 million in lease fee to be paid in monthly instalments during the concession period (in order to calculate the real value of the lease fee, a discount rate of 12.68% was used; this government has used this rate in other infrastructure sectors). The income generated by the toll charges is estimated to reach US$ 1 billion over the concession period. During the first year of the concession, US$ 76.4 million was invested with the sponsors own resources; the remaining cost will be financed with loans to be raise by Smith Barney (these resources may be obtained from the brazilian federal development bank, BNDES, and from the IADB). As of November 1999, the concessionaire received a US$ 46.7 million long-term loan from the BNDES (Unibanco acted as the financial adviser form the transaction); the concessionaire also received a US$ 15.6 million short-term loan from the commercial bank BIC Banco. As of December 2003, Conter had sold its shares. Leao e Leao had increased its stake to 60% of the shares and Braest Participacoes was holding the remaining 40%. The investments undertaken by Triangulo do Sol S.A, year by year were: 1998 – US$ 108.9 million (R$ 131.5 million) 1999 – US$ 85.4 million (R$ 156.2 million) 2000 – US$ 96.3 million (R$ 187.8 million) 2001 - US$ 95.3 million (R$ 212 million ) 2002 – US$ 67.6 million (R$ 239 million)