ETVG - Empresa de Transmissao de Varzea Grande

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In June 2010, the Brazilian company Alupar (fomerly known as Alusa) was awarded in a competitive bidding process the contract to build and operate the Varzea Grande Substation located at the state of Mato Grosso. Besides ETEP, six other companies took part in the contest: the Spanish company COBRA INSTALACIONES Y SERVICIOS S.A.; the Spanish company ABENGOA CONCESSOES BRASIL HOLDING S/A; the state-owned company ELETRONORTE; the Brazilian company ORTENG EQUIPAMENTOS E SISTEMAS LTDA; the Brazilian company ENGEGLOBAL CONSTRUCOES LTDA; and the Brazilian company ATP ENGENHARIA LTDA. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Alupar presented the lowest offer, a total value of US$ 1.7 million (BRL 3 million), 13.22% below the ceiling set by the regulatory agency. The contract was signed in November 2010, and the sponsor created the company Empresa de Transmissao de Varzea Grande S.A. to lead the project during the 30-year contract period. The sponsor committed to invest US$ 44.6 million (BRL 28.8 million) in the transmission line. Enviromental clearence was awarded in May 2011. Construction works commenced in February 2012 and were concluded by December 2012. Financial closure was based on construction progress. 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 accelated depreciation methods of accounting for construction expenditures.