Linhas de Transmissao de Montes Claros

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In June 2010, the Spanish company COBRA INSTALACIONES Y SERVICIOS S.A. was awarded in a competitive bidding process the contract to build and operate 162-km of transmission lines and two substations located in the state of Minas Gerais. The transmission line was set to link the cities of Pirapora and Montes Claros. Besides Cobra, five other companies took part in the contest: CONSORCIO MINAS TRANSMISSAO; the Spanish company ISOLUX ENERGIA E PARTICIPAÇOES S/A; ALUPAR INVESTIMENTO S.A.; ELECNOR TRANSMISSAO DE ENERGIA S.A.; and TRANSMISSORA ALIANÇA DE ENERGIA. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Cobra presented the lowest offer, a total value of US$ 10.6 million (BRL 20.9 million), 26.2% below the ceiling set by the regulatory agency. The contract was signed in June 2010, and the sponsors created the company Linhas de Transmissao de Montes Claros Ltda to lead the project during the 30-year contract period. The sponsor committed to invest US$ 137.2 million (BRL 271 million) in the transmission line. In May 2012, the sponsor was granted a US$ 62.3 million (BRL 123.1 million) loan from state-owned bank BNDES. The remaining cost was set to be financed with the sponsors’ internal resources. Enviromental clearence was awarded in June 2011. As of October 2012, construction works were underway. Operation was set to commence in November 2012, yet the works were on delay thus operation are likely to initiate in 2013. The company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelated depreciation methods of accounting for construction expenditures. Operations commenced in July 2014.