Linhas de Transmissao do Itatim Ltda

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In November 2008, the Spanish company COBRA INSTALACIONES Y SERVICIOS S.A. was awarded in a competitive bidding process the contract to build and operate 547-km of transmission lines (Ilha Solteira - Inocencia - Chapadao) located in the states of Mato Grosso do Sul and Sao Paulo. Besides COBRA INSTALACIONES Y SERVICIOS S.A., three other companies took part in the contest: the Spanish company Cymi Holding; the Spanish company ELECNOR TRANSMISSAO DE ENERGIA S.A.; and the Spanish company ISOLUX INGENIERIA S.A. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. COBRA INSTALACIONES Y SERVICIOS S.A. presented the lowest offer, a total value of US$ 26.6 million (BRL 48.6 million), 18% below the ceiling set by the regulatory agency. The contract was signed in April 2009, and the sponsors created the company Linhas de Transmissao do Itatim Ltda to lead the project during the 30-year contract period. The sponsor committed to invest US$ 177.3 million (BRL 312 million) in the transmission line. Environmental clearance was awarded in August 2010. Construction works commenced in January 2010 and were concluded by October 2011. In October 2012, the Chinese company State Grid acquired seven transmission line projects that belonged to group Cobra for US$ 537.9 million (BRL 1.05 billion), besides taking the responsibility of US$ 417 million (BRL 814 million) in debt. In November 2012, the sponsor was granted a US$ 169.8 million (BRL 331.4 million) loan from state-owned bank BNDES. 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 accelerated depreciation methods of accounting for construction expenditures.