Interconexion Puerto Madryn-Pico Truncado

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On January 12, 2006, the provincial authorities of Chubut and San Cruz signed an 82 year contract for the construction, operation and maintenance of the 500/132kv Interconexion Puerto Madryn-Pico Truncado with Integracion Electrica Sur Argentina (Intesar SA). The transmission line was to run 530km through the provinces of Chubut and San Cruz, connecting Puerto Madryn with Pico Truncado. It was an extension of the Choele Choe—Puerto Madryn transmission line (project number 3416). Interconexion Puerto Madryn-Pico Truncado 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 Intesar SA through a public competitive tender. Bidding took place in July 2005 and the main bidding criterion was the lowest present value of payments during the period of operation and maintenance. Intesar SA won the tender by presenting the lowest present value. Intesar SA was a company owned by Argentine Electroingenieria SA y Gerardo Ferreyra. The cost of the transmission line was estimated by Intesar SA at approximately US $155.1 million (473 million pesos). Intesar SA provided its own financing and by December 2006, 25% of construction was completed. The line was expected to become operational in November 2007. In the project contract, the provincial governments agreed to pay to Intesar SA: (1) a monthly fee during the construction period of 22 months and another monthly fee for the first 15 years of the line operation. Both fees were defined based on Intesar’s winning bid. The divested Transener SA (project number 55), the owner of technical license of al high voltage line, was responsible for supervising the line construction, operation, and maintenance, and was to receive 4.5% of Intesar SA’s monthly operational and maintenance payments during the 15 year of operations. After that, Intesar SA was to pay 2.5% of its earnings to Transener SA. The line was commissioned in June 2008, begining the stage of operation and maitenance. 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 473 million Argentine Pesos = 155.1 USD.