Costa Sierra Section 1B

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In February 2007, Grana & Montero SAA signed a 15 year concession contract with the Peruvian ministry of transport and communications to build, rehabilitate, operate and maintain a 78 km stretch of highway in the Piura department. Costa Sierra Section 1B ran from Buenos Aires to Canchaque. It was the first section of the Costa Sierra highway, a rehabilitation program for 28 stretches of existing roads in mostly rural areas of Peru totaling 1300 km. The program was also intended to enable agricultural products to get to market. The concession was awarded on October 31, 2006 in a public tender that included only one bidder: Grana & Montero SAA. The bidding criteria was the value of fixed government payments or Pago por Servicio (PAS) awarded every trimester. Following the signing of the contract in February, Grana & Montero SAA had 12 months to finish construction per the terms of the contract. Investments during this period were estimated at US $31 million. The concession had the possibility of a 5 year renewal at the end of its term.