Ferrocarril de Arica a La Paz - Bolivia

distressed

In September 1997, the management company Ferrocarril de Arica a La Paz (FACL) was formed to bid for a 25-year concession to operate the 206.4km railway between La Paz and the port of Arica in Northern Chile. The consortium, renamed Aministradora del Ferrocarril de Arica La Paz, won the 25-year concession contract on November 3rd, 1997. The members of the consortium are: Jose Saavedra Banzer (30%), Metropolitana (Bolivia) Ltda (20%), Panamerica Securities (10%), and Empresa Ferroviaria Oriental S.A. (EFO - 40%). The EFO consortium also has the concession to operate the Oriental line (one of the two concessions created from Bolivia's state railway company). The partners contributed a total US$ 1 million of equity (divided according to their shares in the consortium). The consortium pays an annual lease fee of US$ 223,000, but must pay only 50% in year 1 and 75% in year 2. The consortium has not made any additional investment because current traffic flows do not justify it. As of 2005, FACL was having serious financial dificulties, and the train had stop operating indefinitely until they found a way out of the financial situation they were facing. None None