Interconexion Gran Mendoza-San Juan

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On February 24, 2006, the provincial authorities of San Juan signed an 82 year contract for the construction, operation and maintenance of the 500/220kv Interconexion Gran Mendoza-San Juan with Transportadora Cuyana SA. The transmission line was to run for 175km from the Grand Mendoza to the San Juan substation and was the first section of the Minera line. Interconexion Gran Mendoza-San Juan was part of a federal plan to increase the capacity of the high voltage (500k) transmission network and integrate energy supply and demand throughout Argentina. The project was granted to Transportadora Cuyana SA through a public competitive tender. The main bidding criterion was the lowest present value of payments during the period of operation and maintenance. Transportadora Cuyana SA won the tender by presenting the lowest present value. The cost of the transmission line was estimated by Transportadora Cuyana SA at approximately US $46.9 million (143 million pesos). Transportadora Cuyana SA provided its own financing and by December 2006, 25% of construction was completed. The line was expected to become operational in March 2007. In the project contract, the provincial governments agreed to pay to Transportadora Cuyana SA: (1) a monthly fee during the construction period of 420 days and another monthly fee for the first 10 years of the line operation. Both fees were defined based on Transportadora Cuyana SA’s winning bid. The divested Transener SA (project number 55), the owner of technical license of all high voltage lines, was responsible for supervising the line construction, operation, and maintenance. Transener SA was to receive 3% of Transportadora Cuyana SA’s construction payments and 4% of its monthly operational and maintenance payments during the 10 year of operations. For the remainder of the contract, Transportadora Cuyana SA was to pay 2.5% of its earnings to Transener SA. The line was commissioned in September 2007. The conversion from Argentine Peso to USD was made using the market rate, period average for Argentina in 2006 which = 3.05peso/ 1 USD according to the Interntational Monetary Fund (IMF). The investment in pesos was 143 million Argentine Pesos = 46.9 USD.