La Piedad Bypass and Access to Mexico-Gudalajara Highway

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On November 18, 2009 the Mexican construction company ICA SA de CV, in a ceremony led by the Mexican President, officially began the construction, operation and maintenance of the 21.4km La Piedad bypass, as well as the widening and operation of a 38.8km section of federal highway Mex-110 and the rehabilitation of a 7.32km stretch of highway Mex-90, in the states of Guanajuato and Michoacan for a period of 30 years. ICA formed Libramiento ICA La Piedad, SA de CV as the project company. Tolls were to be collected on the bypass. The Piedad bypass was to connect with the Irapuato – La Piedad Highway (project #3525) for which ICA holds a private service contract under the PPS model. The bypass was expected to create 4,800 construction related jobs while reducing noise and traffic congestion from traffic between the Bajio region and western Mexico. The project was awarded to ICA SA de CV by SCT on November 28, 2008. The award followed an international, competitive tender launched by SCT on October 30, 2007. The tender was launched under the new concession model in which the bidding criterion was the lowest amount of government subsidies. Three consortia submitted final bids: Controladora de Operaciones de Infraestructura, SA de CV (ICA), Rostec de Mexico, SA de CV and Isolux Corsan Concesiones, SA. The total project cost was estimated at 1896 million pesos (US $140.4 million). Banco Santander and Banorte loaned over 1000 MXN (US $74) million as 15-year bank debt priced at 275bp in the first quarter of 2009. The exact date that the banks arranged the debt facility was not known. The project was expected to become operational in the first quarter of 2011. By the end of the fourth quarter of 2012, the project became operational according to company reports. Converted using the IMF market rate period average for 2009 =13.5 MXN to 1 USD