Fluminense Highway

active

In February 2008, the Brazilian federal government signed a 25-year concession contract with Obrascon Huarte Lain (OHL) [Spain] to operate and rehabilitate the Fluminense Highway. The Fluminense Highway consisted of 320 km of federal highway BR 101 near Rio de Janeiro. OHL formed Autopista Fluminense as the project company. It owned 60% of the equity through its subsidiary OHL Brasil. The remaining 40% was owned by private individuals. The project was awarded to OHL in October 2007 along with four other concession contracts in an international competitive tender in which the bidding criteria was the lowest tariff. OHL was awarded the bid after submitting the low bid of: 2.258 Brazilian reals per toll plaza. A total of 13 bidders competed in the auction. The total project cost was estimated at US $904 million over the life of the project. After taking possession of all five highways in February 2008, OHL began building toll plazas in July 2008 to recover its cost. By December 2008, more than half of the toll plazas had been built. In July 2008, OHL Brasil closed its R$670 (US$420.3m) financing for its five toll road concessions won in October 2007, with Santander as the lead bank, followed by Banco do Brasil and Bradesco. The cost was to be CDI, or 12.6%, plus1.037%, with an 18-month term and a bullet. It was still seeking long term financing and had negotiated requested funding from BNDES, Brazil’s development bank, which agreed to fund approximately 70% of the project cost. The remaining 30% was to be funded from OHL’s equity. As of December 2008, long term financing had not been arranged. As of Sep. 2009, the OHL group was experiencing difficulties and investments were delayed. The group alleged that traffic had been below the estimation and environmental hurdles had delayed the instalation of the toll booths. As a result, the group requested that the toll rates should be increased. In addition, due to the 2008 financial crisis, the concessionares in the toll road sector in Brazil have faced higher costs on external financing. In December 2011, BNDES granted a US$ 478.4 million (BRL 780.8 million) loand to the project company.