Costa Sierra: Ovalo-Chancay-Huaral-Acos Stretch

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On February 20, 2009 Peru’s Ministry of Transport and Communications (MTC) signed a 15-year concession contract with the consortium Concesion Chancay-Acos for the rehabilitation, operation and maintenance of the 76.5km Ovalo-Chancay-Huaral-Acos stretch of the Costa Sierra highway. The consortium was comprised of Colombian firm Conalvias and its subsidiary Infraestructura Concesionada. The project was expected to benefit 154,281 inhabitants and the area's agriculture industry, having a positive impact on the local economy by improving the transport of produce and generating employment. On November 7, 2008 Peru's state agency for the promotion of private investment ProInversion awarded the contract to carry out works on the Ovalo-Chancay-Huaral-Acos stretch of the Costa Sierra highway to consortium Concesion Chancay-Acos in an international, competitive tender. The other bidder was Consorcio Inversiones y Concesiones Huaral formed by the firms Obras de Ingenieria SA, Earlstree Holdings LLC, and Earlstree. The bidding criterion was the lowest government amount of government payments. The payments were in two forms: a construction subsidy to be paid out in the first year Pago por Obras (PPO) of 15 US $31 million and a payment for operation and annual maintenance or (PAMO) for US $2 million paid out annually over the 15 year concession. PPO was to be paid directly by the government to the concessionaire. In the case of PAMO, the concessionaire was to collect tolls with the assurance that if at least US $2 million were not collected, Peru’s government would cover the revenue shortfall.