Encruzo Novo Transmissora de Energia

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In December 2010, the company Elecnor Transmissao de Energia S.A., a subsidiary of the Spanish group Elecnor, was awarded in a competitive bidding process the contract to build and operate 240 km of transmission lines and one substation located in the state of Maranhão. Besides Elecnor, other companies took part in the contest: the Spanish company Cobra Instalaciones y Servicios; the Brazilian state-owned company ELETRONORTE; the Brazilian companies Alupar Investimento, FR Incorporadora, Transmissora Aliança de Energia Elétrica and ATP Engenharia. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Elecnor presented the lowest offer, a total value of US$ 4.1 million (BRL 8.1 million), 33.95 % below the ceiling set by the regulatory agency. The 30-year contract was signed in June 2010, and the sponsors created the company Encruzo Novo Transmissora de Energia Ltda. The sponsor committed to invest US$ 43.1 million (BRL 85.17 million) in the project. In October 2012, the state-owned bank BNDES approved a US$ 27.2 million (BRL 53 million) loan to the project. Operation was set to start in May 2012, but actually started in July 2012. The company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures.