Econorte Toll Road

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Empresa Concessionaria de Rodovias do Norte SA - Econorte was granted a 24-year concession awarded by the State of Parana. The bidding process was competitive and the award criteria was the quantity of km of access highways to be rehabilitated by the sponsors. The concession is a Rehabilitate, Operate and Transfer type: the consortium is responsible for rehabilitation and maintenance of the 240 Km toll road. The consortium that won the concession comprised Ivai Engenharia, Construtora Triunfo and Necso holding 25% of the shares each; Polledo holding 14%, Construtora Sanches holding 9% and Coneville holding 2%. These companies became shareholders of Econorte. The estimated traffic flow was 5,600 vehicles per day. In June 1998, as the initial rehabilitation works were completed, the concessionaire started charging tolls. In August 1998, the concession contract was under renegotiation; as the state government decided to reduce the toll rates, the concessionaire stopped its investment plans and only the rehabilitation works were implemented. In 2000, Econorte resumed investments after an amendment of the terms of the concession had been signed. In 2003, after the concessionaries that operate in State of Parana failed to reach an agreement with the government to lower the toll rates, the government of the State of Parana enacted a statute to cancel the concession and return the management and operation of the highways to the State. In December 2003, a Federal Court declared that the cancellation should be preceded by an administrative process in order to define the due compensation to the company. In January 2004, the governor of the State of Parana enacted an executive decree declaring that the State was authorized to take the voting shares of Econorte. The government stated that the expropriation would not take place if the company agreed to reduce the toll rates. As of January 2004, the issue is pending final judicial decision. In April 2004 the federal court ruled that the concessionaire should still operate, thereby overturning the state court decree that took back the concession contract. The concessionaire and the state government were to negotiate toll rates but the contract was not in question. As of Dec. 2009, Econorte was a wholly-owned subsidiary of Construtura Triunfo. The investments undertaken by Econorte, year by year were: 1998 – US$ 16.6 million (R$ 20 million) 1999 – US$ 0.1 million (R$ 0.2 million) 2000 – US$ 5.5 million (R$ 10.7 million) 2001 - US$ 4.2 million (R$ 9.4 million ) 2002 – US$ 8.5 million (R$ 30 million) 2003 - US$ 3.5 million (R$ 10.5 million)