ETSE - Empresa de Transmissao Serrana

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In December 2011, the Brazilian company ECTE (Empresa Catarinense de Transmissao de Energia), a partnership of the Brazilian companies Alupar - Grupo Alusa (52%) and Taesa Transmissora Aliança de Energia Eletrica (48%), was awarded in a competitive bidding process the contract to build and operate two substations located in the state of Santa Catarina. The substations were named SE Abdon Batista (520/230 kV) and SE Gaspar (230/138 kV). The state-owned Cemig acquired 43.4% in Taesa in 2009. The remaining shares remained with private institutional investors. Besides ECTE another company took part in the contest: Consorcio Barriga verde. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. ECTE presented the lowest offer, a total value of US$ 7.4 million (BRL 14.424 million), 38% below the ceiling set by the regulatory agency. The contract was signed in May 2012, and the sponsors created the company ETSE (Empresa de Transmissao Serrana S.A.) to lead the project during the 30-year contract period. The sponsor committed to invest US$ 74.4 million (BRL 174.8 million) in the transmission line. Environmental clearance for SE Abdon Batista was awarded in September 2012, and for SE Gaspar in March 2013. Construction works on both substations were concluded by December 2014. 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.