Interconexion Rincon Santa Maria-Rodriguez South

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On June, 2006, the Argentine federal government signed an 82 year contract for the construction, operation and maintenance of the 500/132kv Interconexion Rincon Santa Maria-Rodriguez South with Integracion Electrica Sur Argentina (Intesar SA). Interconexion Rincon Santa Maria-Rodriguez was designed as a 920km transmission line connecting the Hydroelectric plant Yacyreta to the province of Buenos Aires. The southern section was to run approximately 239.7km from Colonia Elia to the substation Rodriguez in Buenos Aires Province. Interconexion Rincon Santa Maria-Rodriguez South 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. 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 $158.4 million. Intesar SA provided its own financing and by December 2006, 25% of construction was completed. The line was expected to become operational in January 2008. In the project contract, the federal government agreed to pay to Intesar SA: (1) a monthly fee during the construction period of 600 days 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 all high voltage lines, was responsible for supervising the line construction, operation, and maintenance. Transener SA was to receive 4.5% of Intesar SA’s monthly operational and maintenance payments during the 15 year of operations. For the remainder of the contract, Intesar SA was to pay 2.5% of its earnings to Transener SA. In June 2008, the project became operational along with the Northern section according to Transener SA. Is this a PPI if all Intesar did was the construction? Investments in facilities were converted from Argentine Pesos to USD using the period average market rate for 2006 posted by the International Monetary Fund