Inter-Oceanic Highway Section 4

active

Prospective

In August 2005, Consorcio Intersur signed a 25 year BOT contract with the Government of Peru for section 4 of the Inter-Oceanic Highway. The Inter-Oceanic Highway was a road corridor that was slated to connect the Atlantic Ocean in Brazil with the Peruvian ports of San Juan de Marcona, Matarani and Ilo, in the Pacific. The Inter-Oceanic Highway project entailed the construction and renovation of a total of 2,603 kilometers of roads connecting the Amazonian state of Acre, Brazil with the port cities in the southern coast of Peru. Section 4 was an unpaved, 305 km stretch that went from the city of Inambari (Madre de Dios) to Azángaro (Puno). Consorcio Intersur won the contract through a competitive tender carried out by ProInversion (Peru’s private investment promotion agency) in June 2005. The public tender was awarded to the bidder who obtained the highest score, according to a math formula based on the lowest value resulting from adding the present values of PAO and PAMO payments, and the national component proposed by the Bidder. Consorcio Intersur was comprised of the Brazilian firms Andrade Gutiérrez, Queiroz Galvao and Camargo Correa. The concessionaire was responsible for building, improving, rehabilitating, operating and maintaining the road section according to the technical guidelines contained in the agreement (level of service index, among others). The concessionaire obtained a revenue guarantee from the government, based on two types of payments: Annual Payment for Works (PAO) and Annual Payment for Maintenance and Operation (PAMO). PAO were biannual payments for each stage of construction, upon conformity of works. PAMO were quarterly payment for operation and maintenance. The main source of funds for PAO and PAMO came from toll revenue collected by the concessionaire that was set to be deposited in a trust fund. If the toll revenue was not enough to pay the concessionaire, the Peruvian Government agreed to pay the difference. Initially, the total cost of Interoceanic Highway Section 4 was estimated at US $214 million, but this estimate was revised to US $562 million at the time of financial closure. Financial closure was reached in May 2007, when Intersur Concessiones SA, through Interoceanica IV Finance Limited, its SPV, issued US $562 million in zero coupon bonds. The bond issue was backed by Peru’s government and rated Ba3 by Moody’s. Construction works were concluded in October 2014. According to a phone conversation with Danilo Moyasevich Baca (Telephoe: (511) 612-1200 (Anexo 1291)) of ProInversion, it did not reach financial closure in 2005.

Transport

World Bank Group

Project

Commercial, Road, Cable car, Seaport, Telecommunications, Government, Manufacturing (Industrial), Automotive